M/S. Amir Chand Jagdish Kumar ... vs M/S. Hindustan Hing Supplying Co.
2010 Latest Caselaw 5375 Del

*                   IN THE HIGH COURT OF DELHI AT NEW DELHI

+         IA Nos. 3214/2006 & IA 3975/2006 in CS(OS) No.480/2006

%                                   Date of Decision: 26.11.2010

M/s. Amir Chand Jagdish Kumar (Exports) Ltd.                   .... Plaintiff

                                  Through Mr. S.K.Bansal, Mr. Akshay
                                          Srivastava, Mr. Pankaj Kumar and
                                          Mr.Anand Vikas Mishra Advocates

                                                   Versus

M/s. Hindustan Hing Supplying Co.                              .... Defendant

                                  Through Mr. Hemant Singh, Mr. Sachin Gupta
                                          and Mr. Animesh Rastogi, Advocates

CORAM:
HON'BLE MR. JUSTICE ANIL KUMAR

1.        Whether reporters of Local papers may be                    YES
          allowed to see the judgment?
2.        To be referred to the reporter or not?                      NO
3.        Whether the judgment should be reported in                  NO
          the Digest?


ANIL KUMAR, J.

*

IA Nos. 3214/2006 (under Order 39 R. 1 & 2 CPC) (by the plaintiff) and IA 3975/2006( under Order 39 Rule 4 by the defendant)

1. The plaintiff has filed the above noted suit for permanent

injunction seeking restrain against infringement, passing off goods

by the defendant under the trademark `Aeroplane‟ brand label with

device of `Aeroplane‟ contending, inter-alia, that since the year of its

incorporation, plaintiff company is engaged in the business of

processing, marketing and exporting rice, and during the course of

business it also started the business of processing and marketing

spices and other allied preparation made from cereals using

trademark `Aeroplane‟ brand label with device of `Aeroplane‟ which

trademark has a distinctive get up, make up and has a distinctive

artistic manner. According to the plaintiff this trademark `Aeroplane‟

with device of `Aeroplane‟ along with its goodwill and reputation was

acquired from its predecessor M/s. Amir Chand Jagdish Kumar by

agreement dated 14th January, 2005 which had been a

proprietorship concern. The averment of the plaintiff is that its

predecessor had adopted `Aeroplane‟ brand label with device of

`Aeroplane‟ on 1st May, 1982 and has been continuously using the

same since then up to the present time and goods bearing the said

trade mark are distributed in major parts of India as well as the

world. The trademark of the plaintiff was duly registered under No.

439849 in the States of Punjab, Haryana, Gujarat and Union

Territory of Delhi in respect of rice under class 30 on 5th July, 1985.

The said trade mark was registered under No. 588262 under class 30

from 8th January, 1993 for sale in India and also for export. From

4th May, 2001, the trademark and device were registered under No.

1007672 for rice, pulses rawa, maida, atta, suji, sugar, honey, salt.

An application No. 1405910 dated 12.12.2005 was filed under class

30 in respect of spices, flour and other food articles for human

consumption which is pending for registration. The plaintiff also

disclosed the details of the applications and the registration of his

trademark in different countries. According to the plaintiff its

company is accredited with ISO 9001 for maintaining excellent

quality of products and consequently, the plaintiff‟s goods and

business have acquired tremendous goodwill and good reputation in

global market.

2. On the allegation of the plaintiff that the defendant has

adopted an identical/deceptively similar trademark `Aeroplane‟ label

with device of `Aeroplane‟ in relation to spices and other allied food

preparation and that the trademark of the defendant is identical and

deceptively similar and by adoption and user, the defendant has

infringed and passed off his goods as that of the plaintiff and the

defendant‟s activities are amounting to interference in the business

of the plaintiff and is an unethical trade practice and that the

impugned adoption and use by the defendant is malafide and

fraudulent, this Court by an ex-parte interim order dated 20th March,

2006 in IA No. 3214/2006 restrained the defendants from using the

trademark „Aeroplane‟ and the device of „Aeroplane‟ for spices and

cereals products including the packaging. The said order was further

clarified by order dated 4.4.2006 holding that the order dated 20th

March, 2006 shall not apply to asafoetida sold under the brand

name `Aeroplane‟ since the interim order per se does not apply to

asafoetida being only applicable to spices and cereals.

3. The defendant filed an appeal being FAO(OS) No. 312/2006

against the ex-parte order dated 20th March, 2006 in which by order

dated 1st May, 2006, with the consent of counsel for both the parties

held that the order dated 20th March, 2006 shall not be given effect

till the disposal of the application under Order 39 Rule 1 & 2 of CPC

and the application of the defendant under Order 39 Rule 4 of CPC.

The Division Bench, however, did not vacate the ex-parte injunction

order dated 20th March, 2006 but only stayed the direction for

appointment of Local Commissioner by the Single Judge by order

dated 20th March, 2006.

4. The defendant thereafter, had filed another FAO(OS) No.

650/2006 titled as M/s. Hindustan Hing Supplying Company Vs.

Amir Chand Jagdish Kumar which was disposed of by order dated

16th October, 2006 whereby hearing of the application for injunction

under Order 39 Rule 1 & 2 and defendant‟s application under Order

39 Rule 4 before the Single Judge were preponed.

5. By order dated 24th October, 2007 while dealing with the above

noted applications, this Court had held that two questions arise for

consideration for deciding these applications which are as follows:-

1. Whether the assignment of trademark without goodwill would convey the right of proprietor used by predecessor in favor of assignee?

2. Whether the predecessor, who have assigned their trademark „aeroplane‟ to the defendant, were the prior user of said trademark and if so, since when?

This Court also held that question No. 1 is purely a question of

law whereas the second question is a question of fact.

6. The above questions were framed by this Court on the

pleadings of the defendant contending, inter-alia, that the defendant

is the proprietor of the trademark „Aeroplane‟ and device of

„Aeroplane‟ in relation to spices and has exclusive right to use it. It

was asserted that he has been using the trademark „Aeroplane‟ and

device of „Aeroplane‟ in relation to Asafoetida since 1952 and the said

trademark and device in respect of spices since 2003. The defendant

disclosed that he is the registered proprietor of the said trademark by

trademark registration No. 184843 in Class-30 for Asafoetida as on

30th April, 1958 and in respect of spices trade, an application with

Registrar of Trademark was filed being application No. 872133 dated

19th August, 1999.

7. According to the defendant, the plaintiff has admitted that the

defendant is using the said trademark and device for spices since

2003 whereas the plaintiff is using the said trademark for spices

since September, 2005. The defendant further asserted that the

trademark „Aeroplane‟ was used by partnership under the name and

style of `New Bharat Hing Supplying Company‟ since 1952. The said

partnership comprised of late Mr. Abdul Karim Khan Mirza Khan,

father of defendant and Mr. Abdul Rahim Khan Mirza Khan, uncle of

the defendant. According to the defendant, several persons were

inducted as partners or beneficiaries from time to time and their

induction is reflected in the record of the Registrar of Trademark,

issued regarding use of trade mark registration No. 184843. The

defendant contended that he, Mr. Navroz Khan Pathan, was admitted

to the benefits of the partnership in 1966.

8. By a retirement deed dated 1st November, 1988, defendant Mr.

Navroz Khan, retired from partnership firm along with another

partner Mr. Firoz Khan. After retirement, defendant continued the

business of selling Asafoetida under the name and style of

`Hindustan Hing Supplying Company‟. He categorically asserted that

the partnership business had assigned the registered trademark

„Aeroplane‟ for Asafoetida to him and he has been using it in his

business under the name and style of `Hindustan Hing Supplying

Company‟. The further assertion of the defendant is that on 11th

April, 2000, the partnership of Mr. Navroz Khan, defendant and Mr.

Feroz Khan, who had retired from the earlier partnership `M/s. New

Bharat Hing Supplying Company‟ and had started business in the

name of `M/s. Hindustan Hing Supplying Company‟ also dissolved

and the trademark and device „Aeroplane‟ and the goodwill was

transferred in favor of defendant, Mr. Navroz Khan Abdul Karim

Pathan and a dissolution deed dated 11th April 2000 was executed,

which was, however, somehow named as partnership deed instead of

dissolution deed.

9. The defendant pleaded that the copy of the deed and the

application on TM Form-24 dated 6th April, 2004 was submitted with

the Registrar of Trademark for incorporating Mr. Navroz Khan Abdul

Karim Pathan as the sole proprietor of the trademark „Aeroplane‟

registered vide trademark registration No. 184843. Since 11th April,

2000 `M/s. Hindustan Hing Supplying Company‟ has been carrying

on business of sale of Asafoetida as sole proprietary concern of

Navroz Khan Abdul Karim Pathan/defendant. The defendant also

disclosed the amount spent by the partnership and thereafter, sole

proprietorship firm in the advertisement and sale promotion. In

2005-2006 firm‟s annual sale was Rs.3,26,98,792/- whereas its

annual expenditure on sale and promotion was 16,73,706/-.

10. According to the averments of the defendant, in 1999, it

expanded its business to commence manufacture and sale of other

spices such as chilli powder, turmeric powder, baking powder, salt,

tea, coffee, cocoa, sugar etc. under the said trademark and device

„Aeroplane‟ and applied for registration by application No. 872133

dated 19th August, 1999. The defendant, however, commenced

manufacture and sale of spices under its trademark „Aeroplane‟ in

the year 2003.

11. The defendant disclosed that he was not aware of use of his

trademark and his device „Aeroplane‟ by the plaintiff in relation to

rice and cereals and only in December, 2005 he came across the

advertisement of the trademark application No. 1007673 dated 4th

May, 2001 advertised in the trademark Journal No. 133 dated 1st

August, 2005, which was made public on 14th October, 2005. The

defendant therefore, submitted his objection by opposition dated 7th

December, 2005. According to defendant, the present suit by the

plaintiff is a pre-emptry action and is malafide and fraudulent in

nature.

12. The defendant filed an affidavit of its proprietor Mr. Navroz

Khan Pathan dated 22nd July, 2006, deposing about the documents

filed with the affidavit. The documents filed by the defendant

included the registration certificate of `New Bharat Hing Supplying

Company‟ with the sales tax office dated 7th October, 1978 showing

the defendant as partner of the said firm. A copy of notice dated 29th

April, 1958 issued by food inspector which was also filed with

Borough Municipality, Nadiad showing Mr. Abdul Karim Mirza as the

proprietor of M/s. New Bharat Hing Supplying Company. In order to

demonstrate that the predecessor firm of the defendant `New Bharat

Hing Supplying Company‟ had been using the trademark „Aeroplane‟

and device „Aeroplane‟ since 1952 which was registered in 1958, the

defendant produced a copy of order dated 3rd September, 1960

placed by M/s. J. Manilal and Company on the predecessor firm.

13. The defendant also produced various invoices from 25th

January, 1980 up till 15th October, 1985 to show the business

carried on by `New Bharat Hing Supplying Company‟ using the trade

name „Aeroplane‟ and device „Aeroplane‟. The documents,

photocopies of invoices produced by the defendant are in Gujarati,

therefore, the defendant filed the English translation with the

certificate of notary about the translation being the correct copy of

the documents in Gujarati. The documents filed with affidavit dated

22nd July, 2006 were the photocopies of the documents. The

defendant filed another affidavit dated 28th October, 2010 and filed

original documents with the said affidavit.

14. According to the defendant the goodwill of business `New

Bharat Hing Supplying Company‟ was not calculated at the time of

his retirement on 1.11.198 and it was incorporated in the deed that

nothing is due to the defendant retiring partner on account of

goodwill. However, the trademark with device along with trademark‟s

goodwill was assigned by `New Bharat Hing Supplying Company‟ to

his newly constituted firm `M/s. Hindustan Hing Supplying

Company‟, which was also dissolved on 11th April, 2000 and after

that date he is carrying on business as a sole proprietor of

`Hindustan Hing Supplying Company‟ and using the trademark

„Aeroplane‟ and device „Aeroplane‟. The defendant also clarified that

assignment was of entire goodwill of the trade mark but not of

partnership firm `New Bharat Hing Supplying Company‟. Being a

partner of `New Bharat Hing Supplying Company‟ he had share in

the undivided goodwill of the partnership firm but since it was not

calculated so it was held that nothing is due to him on account of

goodwill from `New Bharat Hing Supplying Company‟, however, he

was given exclusive right to continue using the trade mark and

device `Aeroplane‟. From the deed of retirement it is also apparent

that the remaining partners of `M/s New Bharat Hing Supplying

Company‟ also did not charge anything from the retiring partners

including defendant for using the trademark and device `Aeroplane‟.

15. The defendant has also produced the documents pertaining to

initiation of proceeding under Prevention of Food Adulteration Act

regarding spices as on 27th June, 2002. Some copies of bills along

with newspapers‟ advertisements for the period 2003-04 have also

been produced by the defendant. The copies of the bills issued by the

defendant to Super Stockists of the defendant, namely, Dipti

Traders, Nadiad have also been produced. The defendant has also

produced the Agmark certificate granted for Asafoetida in 1997 and

„Aeroplane‟ spices as on 2nd August, 2001.

16. The defendant contended that the documents produced by him

are only some of the documents to establish his pleas and

contentions, as most of the record of the defendant had been burnt

in Gujarat riots in April, 2002 in which his factory and office

premises were destroyed and record was burnt. He has also

produced the photographs of his burnt factory.

17. The defendant also produced the letter dated 10th July, 2006

to the Registrar of Trademarks by which error in the advertisement

pertaining to trademark application No. 872133 in the Trademark

Journal dated 15th January,2006 was pointed out whereby the

device „Aeroplane‟ had been wrongly disclaimed in the advertisement

issued at the instance of trade mark registry.

18. The defendant along with his application under Order 39 Rule

4, filed the copy of retirement deed dated 1st November, 1988,

stipulating that no goodwill of the firm „New Bharat Hing Supplying

Company‟, Nadiad was calculated and consequently nothing was

found due to the retiring partners for the same.

19. The defendant, in the circumstances, contended that he is the

proprietor of trademark „Aeroplane‟ and device of „Aeroplane‟ in

relation to spices and has an exclusive right. According to him, he

is a registered proprietor and user and in the circumstances, in

accordance with the provisions of the Trademarks Act, the plaintiff is

not entitled for any interim order against him restraining him to use

the trademark „Aeroplane‟ and device „Aeroplane‟ for spices. It was

contended that because of the ex-parte order dated 20th March,

2006, his entire business has come to a grinding halt causing

irreparable injury and damage to his goodwill and business. In the

circumstances, it is contended that he has a good prima facie case

and inconvenience caused to him on account of not using his

established trade name `Aeroplane‟ and device „Aeroplane‟ is much

more in comparison to the plaintiff which has started using the

trademark and device „Aeroplane‟ for rice and cereals admittedly from

2005 and thus, the balance of convenience is in favor of the

defendant. The defendant also asserted that if the interim injunction

is continued against use of his trade mark for spices, irreparable

harm shall be caused to him.

20. This Court has heard the learned counsel for the parties in

detail. Who is a prior registered proprietor of Trade Mark `Aeroplane‟

with device of `Aeroplane‟? According to plaintiff since 1st May, 1982

the plaintiff‟s predecessor firm adopted the said Mark in relation to

rice and is using same continuously and exclusively since then. The

plaintiff has claimed that he is the registered proprietor of Trade

Mark under Nos.439849 (dated 5th July, 1985); 588262 (dated 8th

January, 1993) and 1007672 (dated 4th May, 2010). According to

plaintiff he is also a registered proprietor of Art Work involved in the

said Mark under the Copyright Act, and he extended his business in

September, 2005 in respect of spices and other food articles and had

to file the present suit when the plaintiff became aware in February,

2006 about defendant‟s adoption of the said Trade Mark. According

to plaintiff he is a prior registered user of Trade Mark. Because the

assignment of Trade Mark `Aeroplane‟ and device `Aeroplane‟ to the

defendant by his erstwhile firm in 1988 was without goodwill and so

to the defendant it was assignment in gross and therefore the

defendant cannot claim that he is prior user and has prior

registration of trade mark. According to the plaintiff if the

assignment is in gross, the continuity of the thing symbolized by the

Mark is broken and the use of the Mark by the assignee in

connection with the Trade Mark will also be broken. This is because

though goodwill always goes with the Trade Mark, however, for

general public the assignment may not be deceptive, therefore in

assignment in gross where the goodwill is not transferred, the

continuity and use is broken. It is contended that if the goodwill is

transferred then it will not break the continuity of the thing

symbolized by the assignee‟s Mark. For this proposition the plaintiff

has relied on Mc Carthy on Trade Marks and Unfair Competition

Third Edition, in article 18.01 (3) dealing with `Assignment in Gross‟.

It is asserted by the learned counsel for the plaintiff, Mr.Bansal that

general rule is that an "assignment in gross" of a Trade Mark is

invalid and operates to pass no right to the purported assignee. It is

further contended that the most significant impact of an assignment

in gross is that the purported assignee does not succeed to the

assigner‟s priority of the use of the Mark. The learned counsel for the

plaintiff has also relied on Indian Law Reports, Volume-XXXVIII, at

Page 110 in the matter of British American Tobacco Company Ltd.

Vs. Mahboob Buksh. Learned counsel for the plaintiff has also relied

on the advertisement given on behalf of the assignor of the defendant

`New Bharat Hing Supplying Company‟ stipulating that from 1st

November, 1988 they have assigned the registered Trade Mark and

device „Aeroplane‟ otherwise than in connection with the goodwill of

the business in which they were used by the erstwhile partners in

favor of Sh.Firoz Khan Abdul Karim Khan Pathan and Sh.Navroz

Khan Abdul Karim Khan Pathan who are trading in the name of

„Hindustan Hing Supplying Company‟. This advertisement is dated

5th February, 1990 which was published in The Times of India dated

11th February, 1990. The reliance has also been placed on

advertisement of defendant before acceptance of Trade Mark under

Section 20(1) in respect of application No.872133 dated 19th August,

1990 stipulating that the articles as Asafoetida-S-coffee-TCA, Sugar,

Tapioca, Sago, coffee, Turmeric powder, Chilli powder, Bread,

Biscuits, Paste, Confectionary, Ices, Honey, Treacle, East and Baking

powder and salt are proposed to be used. The emphasis of the

learned counsel for the plaintiff is that since 1988, the transfer of the

business is without goodwill to the defendant, therefore, it is transfer

in gross and the defendant cannot claim that it has a prior registered

Trade Mark of `Aeroplane‟.

21. Per contra the plea of the learned counsel for the defendant is

that the perusal of the retirement deed dated 1st November, 1988

clearly shows that the retiring partners, Sh.Firoz Khan Abdul Karim

Khan Pathan and Sh.Navroz Khan Abdul Karim Khan Pathan were

given two Trade Marks "Tajmahal Chhap Hing" and "Aeroplane

Chhap Hing" and no consideration was to be paid by them for the

same nor they were entitled for any amount for the goodwill of the

partnership as it was not determined. Clause 3 of the retirement

deed rather stipulated that no goodwill is to be calculated and

nothing is due to the retiring partner for the same. The relevant

Clauses of the retirement deed dated 1st November, 1988 reads as

under:-

2) The retiring two partners Sh.Firoz Khan Abdul Karim Khan Pathan and Sh.Navroz Khan Abdul Karim Khan Pathan are given two Trade Marks viz. "In Tajmahal Chhap Hing" and "Aeroplane Chhap Hing" and no consideration is to be paid by them for the same, 3) No goodwill is to be calculated and nothing is due to the retiring partners for the same.

22. In order to determine as to who is the prior registered user

what is to be decided prima facie is whether after retirement on 1st

November, 1988 whereby the trademark `Aeroplane Chaap Hing‟ was

solely assigned to defendant, whether it was an `assignment in gross‟

that is an assignment of trademark divorced from goodwill of its

trade mark.

23. The answer to this will depend upon whether in a business the

goodwill comprises entirely of the goodwill of the trademark or the

goodwill has other components also as the trade name under which

business is done and other factors. Say if a partnership business is

carried in name A and the business also has trade mark registered in

name of partners, it cannot be said that the goodwill is only of the

trade name under which business is carried on by the partnership. If

the partnership business besides the trade name also has trademark

for its products, a component of goodwill will be of trademark of its

products also. In partnership business, if some of the partners retire

from a business carried in the name of A and retiring partner starts

business in name B, the goodwill associated with name A may not be

transferred to those retiring partners who would carry on business in

the name B, however, it may not be inferred that if the trademark

which the partnership was using has been solely assigned to retiring

partners, the goodwill of the trademark cannot be used by the

retiring partner. If the trade mark is assigned to the retiring partners

without any reservation, all the incidents of trade mark solely

assigned will also go to such retiring partners. Partnership is nothing

but a compendious name of partners. If partners were using a

particular trade mark and after retirement some of them are entitled

to continue to use the same trade mark, though they may not be

allowed to use the business name, it cannot be said that they are not

entitled to benefits of use of trademark‟s goodwill prior to retirement,

unless it is specifically stipulated and crystallized for whatever

reason at the time of retirement that the retiring partners will not be

entitled for the goodwill of the trademark.

24. The learned counsel for the plaintiff has contended that in case

of defendant it was `assignment in gross‟ when the defendant retired

in 1988 and continued the trademark under a different name of his

business. In `assignment in gross‟ subsequent use of the mark by

the assignee may be in connection with a different business with

different goodwill and a different type of product. In those

circumstances the continuity of the thing symbolized by the mark

will be broken as the use of the mark by the assignee in connection

with a different goodwill and different product may result in a fraud

on the purchasing public who may reasonably assume that the mark

signifies the same nature, quality of goods or services by the same

persons which were traded by the assignor. The rationale for

`assignment in gross‟ appears to be that the law‟s requirement that

goodwill always goes with the trademark may not make the

assignee‟s use of mark deceptive. Whether an assignment is an

assignment in gross, therefore, will depend on various factors.

25. Considering the principles as enunciated in McCarthy on

Trade Marks and Unfair Competition regarding `assignment in gross‟

it is apparent that assignment of trademark `Aeroplane‟ without the

goodwill of business but with the goodwill of trade mark is not an

`assignment in gross‟ to the retiring partners. It is because though

business name of the defendant is different which is `Hindustan

Hing Supplying Company‟ from the name of the assignor, `New

Bharat Hing Supplying Company‟, earlier partnership firm of the

defendant, however, the trade mark was assigned exclusively to the

retiring partners and it pertained to the same product. While

transferring the trade mark to the retiring partners to use that

exclusively, the assignors, other partners had not put any restriction

regarding use of said trade mark nor had claimed any consideration

from the retiring partners for the exclusive use of trade mark by the

retiring partners. The retiring partner/defendant had also not

claimed any consideration for use of trade/business name of

partnership by continuing partners. What emerges from this is that if

the goodwill of the business, goodwill of the mark and the type of the

goods are different, the continuity symbolized by the mark may

break. However, if the types of goods traded under the mark are

same and some of the persons trading the goods under particular

mark are the same and goods are not traded under the trademark by

the strangers to the earlier business, the continuity will not be

broken. Applying these factors in the case of defendant, it cannot be

held that in 1988 assignment of mark solely to the defendant was an

`assignment in gross‟. Prima facie the continuity of the mark will not

be broken in case some of the partners retire from a partnership

business and carries on the similar business, trading similar product

under the same trademark but under a different business name.

26. From the retirement deed of the defendant it is also apparent

that for the good will of the business nothing was paid to the retiring

partner/defendant and similarly the retiring partner/defendant who

had been assigned the trade marks exclusively without any

reservation and restriction was asked to pay any consideration for

exclusive use of trade marks by the retiring partner/defendant.

Another factor which negates that the assignment in case of the

defendant was `assignment in gross‟ is because if the goodwill of the

trade mark had remained with the continuing partners besides the

goodwill of the business name, they could use the trade name

`Aeroplane‟ and device „Aeroplane‟ but under the retirement deed

they could not use this trade name. In these circumstances, if the

continuing partners of the defendant firm were not to use the trade

mark which was solely assigned to the retiring partner/defendant, it

cannot be held that the goodwill of the trade mark up to the date of

retirement got extinguished on assignment or was retained by the

continuing partners because they continued the business under the

same trade name.

27. In case of a retiring partner who continues with the trade

mark, it cannot be held that the use of trade mark by such a retiring

partner will be deceptive and consequently the plea of the plaintiff

that on retirement by the defendant from the firm `New Bharat Hing

Supplying Company‟ in November, 1988 it was a case of the

`assignment in gross‟ and the defendant cannot take advantage of

the fact that the trade mark `Aeroplane‟ was registered since 1958

which is prior to the registration of the trade mark `Aeroplane‟ of the

plaintiff in 1982. In these circumstances and for the foregoing

reasons it has to be inferred prima facie that the registration of the

trade mark `Aeroplane‟ and device `Aeroplane‟ of the defendant is

prior to that of plaintiff.

28. The precedent relied on by the plaintiff, British American

Tobacco Company Ltd (Supra) is distinguishable and does not

advance the plea of the plaintiff that the assignment of trade mark in

1988 by the partnership in favor of retiring partners will be

`assignment in gross‟. In the case relied on by the plaintiff the

dispute was between British American Tobacco (India Ltd) with

Sheikh Mahboob Buksh and Mahomed Ismail. The business was

carried on in the name of Hindustan Cigarette Company by Sh.Kusi

Lal Kabasi. Sh.Kabasi was entitled for four trade marks in

connection with cigarettes and the plaintiff company had entered

into an arrangement with Sh.Kabasi to use the trade mark and for

the goodwill of Kabasi business. In the suit filed by the British

American Tobacco Company (India Ltd.) against Sheikh Mahboob

Buksh and Mahomed Ismail, the stand of the Kabasi was that he had

assigned to the company only brand and not the entire business.

This was not the case that the plaintiff company and Kabasi were

using the trade name together and later the trade mark was assigned

to the said company and only the business continued with Kabasi. In

the circumstances, in the case of British American Tobacco Ltd it

was held to be an `assignment in gross‟ but the facts of the

defendant are clearly distinguishable. In the circumstances on the

ratio of the said case it cannot be held that the assignment in 1988

by the partnership firm in favor of the retiring partner to trade in the

same product in which the partnership firm was dealing and under

the same trade name in which the partnership firm was earlier

dealing, it will be a case of assignment in gross so as not to pass

such rights as has been claimed by the defendant.

29. The next plea is about the user. The plaintiff has admitted

categorically that he is using the said trade mark and device

`Aeroplane‟ for spices from September, 2005 whereas by various

documents produced, it can be prima facie inferred that the

defendant is using the said trade name and device `Aeroplane‟ for the

spices prior to that of plaintiff.

30. The plea of the plaintiff that the invoices of defendant in the

name of „Hindustan Hing Supplying Company‟ prior to September,

2005 cannot be relied on account of two invoices of different dates

having same numbers cannot be accepted in view of the explanation

given by the defendant. One invoice No.103 dated 27th December,

2003 is in respect of 9 bags of compound asafoetida and 20 Kgs of

different qualities of Aeroplane Chilli powder, Aeroplane Turmeric

Powder and Aeroplane Hing 555 powder for a total sum of

Rs.13,028.40/- and another invoice though bearing the same

number 103 is dated 28th February, 2003 raised on Dipti Traders,

Gunj Bazaar, Nadiad is for a sum of Rs.56,720/- for 100 Kgs of Hing

Afghan Powder and for Hing Aeroplane 555 Powder of different

quality and for different quantity. The defendant has contended and

has given a specific affidavit in this regard deposing that his financial

year begins from 1st day of April of every year and ends on the 31st

day of March of the subsequent year. The defendant has also

categorically deposed that in the beginning of the new financial year,

the invoice numbers are started afresh and the invoice numbers of

previous financial years are not continued in the next financial year.

This cannot be disputed that the invoice dated 28th February, 2003

will be of financial year commencing from 1st April, 2002 ending on

31st March, 2003 whereas invoice dated 27th December, 2003 would

be of financial year commencing from 1st April, 2003 and ending on

31st March, 2004. This is the solitary instance pointed out by the

plaintiff. If the new invoice number is started in every financial year

there can be more than one invoice bearing the same number in the

name of the same purchaser. This fact that two invoices with same

invoice number and different dates would not show that the invoices

have been fabricated as has been contended by the plaintiff. The

products purchased by these two invoices are different and in the

circumstances this Court is unable to infer, prima facie, that the

invoices produced by the defendant are fabricated and do not

establish the prior use of the defendant of trade mark and device

`Aeroplane‟ in respect of spices and various other products. The plea

that the invoice number 115 dated 10th January, 2003 shows

fabrication cannot be accepted. The other invoices before and after

the said invoice number are not in synchronization with the said

invoice's date. The date as 10th January, 2003 apparently bears a

wrong year on account of typographical mistake. The defendant has

produced the copies of the other invoices and apparently the date

"10th January, 2003" has a typographical error as the date of this

invoice should have been "10th January, 2004". The defendant has

categorically deposed about this fact and there is nothing to

disbelieve the plea of the defendant on the basis of preponderance of

probabilities considering the entirety of the documents produced on

behalf of defendant. Regarding some invoices the plaintiff has also

filed an affidavit deposing that on random enquiries being made, it

has transpired that business in the name of some of the purchasers

did not exist. Such an affidavit cannot be accepted. Prima facie such

invoices have to be accepted and would be proved by the defendant

during the trial. On the basis of random enquiry allegedly done by

the plaintiff and contending such a purchaser did not exist, it cannot

be held that the invoice produced by the defendant is forged.

31. Taking into consideration the advertisements given by the

defendant and other documents, the inevitable inference prima facie

is that the defendant is also the prior user of the trade mark and

device `Aeroplane‟ in respect of spices. This has not been disputed by

the plaintiff that he started using the trade mark and device

„Aeroplane‟ from September, 2005. If that be so then the prior use of

the trade mark and device `Aeroplane‟ by the defendant, prima facie

cannot be doubted. The plea of the plaintiff that the conduct of the

defendant is malafide and fraudulent also cannot be accepted on the

basis of plea and contentions raised by the plaintiff.

32. The learned counsel for the defendant has also contended that

Asafoetida in respect of which the defendant is entitled to claim

registrations since 1958 and user since 1952 is also a spice. Thus

the user of trade mark and device `Aeroplane‟ for spices by the

defendant is much prior to that of the plaintiff. Reliance has been

placed on a communication which is an email addressed to the

defendant by the Head of Technology Transfer & Business

Development, Central Food Technological Research Institute, Mysore

stipulating that Asafoetida is the common name and the botanical

name is `Ferula asafoetida‟ which is a part of the plant Rhizome

which is a spice as per ISO list of plant species. The said

communication also stipulates that Asafoetida is one of the 75

species out of 109 species listed in ISO list. If that be so the pleas

and contentions of the defendant regarding registration and use of

Trade Mark for spices much prior to that of plaintiff is further

fortified. The learned counsel for the defendant has also relied on

(2005) 3 SCC 63, Dhariwal Industries Ltd and Anr. v. M.S.S Food

Products where in para 7 at page 68 the Supreme Court had held

that if none of the parties have a registered trade mark as on the

date of the suit, it cannot stand in the way of entertaining the claim

of the plaintiff and granting the plaintiff an injunction in case the

plaintiff can show prima facie that he is the prior user of its mark

and that it has a prima facie case and that the balance of

convenience is in favor of grant of an interim injunction. It was

further held that it may be possible for a plaintiff or a defendant to

show that an unregistered trade mark otherwise being used by

another person earlier had been assigned to it and that it can take

on the prior user of its predecessor. Para 7 of the said judgment is as

under:

"7. Section 27 of the Trade Marks Act, 1999 provides that nothing in that Act shall be deemed to affect the right of action against any person for passing off goods or services as the goods of another person or as services by another person or the remedies in respect thereof. Therefore, the fact that neither party has a registered trade mark as on the date of the suit cannot stand in the way of entertaining the claim of the plaintiff and granting the plaintiff an injunction in case the plaintiff is in a position to show prima facie that it was the prior user of its mark, that it had a prima facie case and that the balance of convenience was in favour of the grant of an interim injunction. It is provided in Section 39 of the Act that an unregistered trade mark may be assigned or transmitted with or without goodwill of the business concerned. It is, therefore, possible for a plaintiff or a defendant to show that an unregistered trade mark that was being used by another person earlier had been assigned to it and that it can tack on the prior user of its predecessor."

In the case of defendant he was the prior user as a partner of

the partnership firm which was nothing but their compendious name

and on retirement he was allowed to use it solely and so he can take

the prior user.

33. Regarding disclaimer on behalf of defendant advertised by the

concerned authorities it is apparent that it is not in consonance with

the application of the defendant. Perusal of the application bearing

No.872133 dated 19th August, 1999 it is apparent that the

application on Form TM-1 in which he has claimed proprietorship of

the trade mark and device `Aeroplane‟ continuously since 1952 in

respect of Asafoetida and he also proposed to use it in respect of

remaining goods and the defendant also agreed to associate the

above trade mark with registered trade mark No.184843 in Class 30.

On this ground also it cannot be held that the defendant is not the

prior user of trade mark and the device „Aeroplane‟.

34. The plea of the learned counsel for the plaintiff is also that

even if the defendant has established that his erstwhile firm M/s

New Bharat Hing Supplying Company had the registration of

Trademark „Aeroplane‟ since 1958 and he is entitled to claim benefit

of it, however, the defendant has not been able to show even prima

facie that the said trademark was used by the defendant and his

erstwhile firm M/s. New Bharat Hing Supplying Company whereas

the plaintiff has produced various invoices since 1982 showing

continuous use of the trademark „Aeroplane‟ by the plaintiff.

According to Mr. Bansal though the defendant has alleged user of

trademark „Aeroplane‟ by M/s New Bharat Hing Supplying Company

since 1952 and its registration since 1958, however, the trademark

was obtained by the said firm malafidely in 1958 as no user has been

established. In the circumstances, defendant cannot claim any right

on the basis of user of the said Trademark. He also contended that

rice is more near and similar to the spices than ASAFOETIDA which

is medicinal in nature. The learned counsel contended that the rice

and spices are in normal course used as edible items whereas

ASAFOETIDA is used for medicinal purpose to cure the ante-

spasmodic pain.

35. The plea of the plaintiff that the defendant has failed to

produce any document to show the user of trademark „Aeroplane‟

prior to 1982 is to be repelled, prima facie, on the basis of the

documents produced on behalf of the defendant on record. The

defendant has filed a copy of sampling of the product of the

defendant for scientific analysis by Chief Chemist, Public Health

Laboratory, Baroda on 29th April, 1958. The defendant has also filed

the translation of this document along with certificate of notary

certifying that the translation is the correct translation of the

document. The said specimen taking order categorically stipulates

that the sample of powder Hing (Aeroplane brand) packeting was

taken for the purpose of scientific analysis. The packeting of

defendant‟s product ASAFOETIDA under the trade name „Aeroplane‟

would be lifted for scientific analysis only if the product was

marketed by the defendant. In the circumstances, the plea of the

plaintiff that the defendant‟s erstwhile firm M/s. New Bharat Hing

Supplying Company has not been able to show use of trade name

cannot be accepted. It cannot be held that the erstwhile firm of the

defendant had obtained the registration of the trade mark without

use with malafide intentions which cannot be accepted in the present

facts and circumstances.

36. The other documentary evidence produced by the defendant to

show the use of the trademark „Aeroplane‟ prior to 1982 by the

erstwhile partnership firm of the defendant, is an order dated 3rd

September, 1960 by M/s. J. Manilal & Co. for supplying of liquid

(ras) (aeroplane hing), Tin 112 KGs on the defendant. This order

placed on the defendant‟s erstwhile firm negates the plea of the

plaintiff that the trade mark `Aeroplane‟ was not used by the

defendant and the registration of the trade mark was obtained

without use with malafide intentions. The defendant has also

produced an invoice dated 25th January, 1980 of New Bharat Hing

Supplying Company. This invoice though does not have the

trademark „Aeroplane‟ or device „Aeroplane‟, like another similar

invoice dated 26th May, 1983 which also does not bear the trademark

and device „Aeroplane‟. However, both the invoices in their product

description use the words ASAFOETIDA „Aeroplane‟.

37. The learned counsel for the plaintiff has also relied on the

report of handwriting and Finger Prints expert, Shri Deepak Jain to

contend that the invoices produced by the defendant are forged.

Perusal of the report reveals that that the alleged expert has relied on

`quality of ink strokes‟. How he could rely on quality of ink strokes

on the basis of photocopies of carbon copies has not been explained.

The report does not indicate the factors on the basis of which it has

been inferred that that some of the writings on the photocopies of

invoices are written by different handwriting instrument. Perusal of

the entire report rather reflect that even prima facie it cannot be held

on the basis of this report that the copies of invoices produced by the

defendant are fabricated. The report appears to have been

manipulated in connivance with alleged handwriting expert and

cannot be relied on prima facie.

38. Mr. Bansal, learned counsel for the plaintiff has also

contended very vehemently that the defendant has only produced

one invoice prior to 1982 and another document that is the sample

taking order under the Food Adulteration Act and since other

invoices have not been produced, therefore, it should not be inferred

that the defendant had been using the trade mark and device

`Aeroplane‟. According to him the advertisement allegedly given in

the news paper `PHULCHHAB‟ dated 7.11.1980 and 22.11.1980 by

the defendant‟s firm which have been produced by the defendant

also cannot be relied on as on enquiry it has been revealed that all

the record prior to 1980 of same news paper has been destroyed.

39. To counter the allegation of the plaintiff as to why only a few of

the invoices and other documents have been produced, defendant

has contended that a substantial record of the defendant was burnt

in Gujarat Riots in 2002. To this plea of the defendant, the learned

counsel for the plaintiff has submitted that if the factory and

business premises of the defendant were burnt, then how the record

produced by the defendant could survive and in the circumstances it

should be inferred that the documents produced by the defendant

are fabricated. Learned counsel for the plaintiff has also contended

that the invoices produced by the defendant are duplicate copies

whereas the invoices showing the use of trademark by the plaintiff

are the copies of the original invoices.

40. Perusal of the document shows that both the parties had

produced the photocopies of the invoices. The defendant later on has

produced copies of invoices of 2003 and 2004 and photocopies of

some other invoices. The learned counsel for the plaintiff has also

contended that the photocopies of the invoices cannot be considered

as no affidavit to consider the secondary evidence has been filed by

the defendant.

41. This plea of the counsel for the plaintiff cannot be accepted. At

this stage the court has to consider whether prima facie, there are

documents which require consideration or not. Whether the parties

shall be entitled to lead secondary evidence and prove the same will

be decided at the appropriate stage during trial. The plea that some

of the photocopies filed by the defendant cannot be considered

cannot be accepted in the facts and circumstances. The evidence

which has been produced by the defendant, if it is secondary in

nature will have to be proved by the defendant in accordance with

law. Merely because the photocopies have been produced by the

defendant, the same cannot be rejected for consideration at this

stage on the ground that no permission has been taken by the

defendant for production of secondary evidence and no affidavit has

been filed. If this yardstick is to be applied, then even the

documents of the plaintiff cannot be considered. In the

circumstances, the consideration of the documents of the defendant

cannot be denied on the ground that they are the photocopies,

secondary evidence and no permission has been taken by the

defendant from the Court for their consideration. Similarly the copies

of advertisements produced by the defendant cannot be ignored on

the plea of the plaintiff that the record of the said news paper prior to

1980 has been destroyed. In the entirety of these facts and

circumstances, the inevitable prima facie inference is that the

erstwhile firm of the defendant was using the trademark „Aeroplane‟

prior to 1982.

42. The learned counsel for the plaintiff has also relied on 2009

(14) PTC 362, Pioneer Nuts and Bolts Pvt. Ltd. Vs Goodwill

Enterprises to contend that Advertisement issued in the News papers

hardly constitute the user of mark by a party. However, in the case of

defendant, it is not only the advertisement given by them in the news

papers but there is other evidence, samples taken under the Food

Adulteration Act, the order placed by a dealer and some of the

invoices. In the circumstances, the contention of the learned counsel

for the plaintiff that the evidence produced by the defendant to prima

facie show user prior to 1982 cannot be accepted.

43. Considering the documents filed along with the affidavit of the

defendant dated 22nd July, 2006 and 27th November, 2010, prima

facie, it cannot be held that the defendant was not using the

trademark „Aeroplane‟ prior to 1982 when the plaintiff also got the

trademark „Aeroplane‟ registered in its name. It also cannot be held

that the trade mark has not been used by the defendant for spices

prior to the plaintiff. In the circumstances the plea of the plaintiff

that the defendant had not used the trade mark `Aeroplane‟ prior to

him cannot be accepted. Therefore, prima facie the trade mark and

device of `Aeroplane‟ of the defendant was registered prior to that of

the plaintiff and user of the trade mark and device `Aeroplane‟ by the

defendant is also prior to that of the plaintiff. In the circumstances

the plaintiff does not have a good prima facie case. Since the

defendant is prior user and has prior registration of trade mark, the

inconvenience caused to the defendant shall be much in case the

defendant is not allowed to use mark `Aeroplane‟. Continuation of

restrain order against the defendant shall also cause irreparable loss

to him.

44. For the foregoing reasons, the application of the defendant

being I.A No. 3975/2006 under Order 39 Rule 4 of the CPC is

allowed and the interim order dated 20th March, 2006 directing the

defendant, his agent, distributors not to use the trade mark

`Aeroplane‟ and the device „Aeroplane‟ for spices and cereal including

packaging at Annexure `B‟ to the plaint is vacated. IA 3214 of 2006

of the plaintiff under order 39 Rule 1 & 2 of CPC is therefore,

dismissed.

CS(OS) No. 480/2006

List before the Regular Bench on original side subject to the

orders of the Hon‟ble Chief Justice on 10th December, 2010.

November 26th 2010                                 ANIL KUMAR, J.
„rs‟