Delhi High Court

M/S Krizm Hotels Private Limited vs M/S Vaishnavi Estates(P) Ltd on 1 August, 2011

Author: J.R. Midha

     *IN THE HIGH COURT OF DELHI AT NEW DELHI

                     +     CS(OS) 2338/2009

                               Reserved on : 30th May, 2011
%                         Date of Decision: 1st August, 2011


       M/S KRIZM HOTELS PRIVATE LIMITED ..... Plaintiff
                     Through : Mr. R.K. Aggarwal, Adv.

                     versus

       M/S VAISHNAVI ESTATES(P) LTD       ..... Defendant
                      Through : Mr. S.K. Bansal, Adv.

CORAM :-
THE HON'BLE MR. JUSTICE J.R. MIDHA

1.      Whether Reporters of Local papers may          YES
        be allowed to see the Judgment?

2.      To be referred to the Reporter or not?         YES

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

                              JUDGMENT

I.A.No.15969/2009

1. The plaintiff has filed this suit for permanent

injunction for restraining infringement of trademark,

service mark, copyright and for damages in respect of its

trademark "Lemon Tree".

1.1 Along with the suit, the plaintiff filed

I.A.No.15969/2009 for grant of ex-parte ad-interim

injunction. Vide order dated 9th December, 2009, the

summons in the suit and notice in the application were

issued to the defendant. However, ex-parte ad-interim

injunction was not granted to the plaintiff at that time.

1.2 On 29th April, 2010, the plaintiff gave up the claim for

violation of the copyright as well as passing off. In view

thereof, the plaintiff‟s claim is now restricted to the claim

for infringement of trademark only.

1.3 The pleadings in the suit as well as in

I.A.No.15969/2009 under Order XXXIX Rules 1 and 2 of the

Code of Civil Procedure are complete.

2. Plaintiff's Case

2.1 The plaintiff is the proprietor of the registered

trademark "Lemon Tree" in classes 8,12,16,17 and 42.

The particulars of the seven registrations held by the

plaintiff are given in para 12 of the plaint and the

registration certificates have been placed on record as

Annexure „F‟. The plaintiff has also applied for registration

in Classes 29, 30, 31, 32 and 35 which are pending with

the Trademark Registry.

2.2 The plaintiff conceived and adopted the trade mark

"Lemon Tree" in 2001 and started its use in October,

2002. The plaintiff opened its first hotel in Gurgaon in

June, 2004. The plaintiff has eleven operational hotels

under the name "Lemon Tree" in various states namely,

Haryana, Goa, Maharashtra, U.P., Kerala, Gujarat, Madhya

Pradesh, Tamil Nadu and Karnataka. Eight more hotels of

the plaintiff are under construction.

2.3 The plaintiff claims to have invested more than

`5,000 crores in the hotel business. The financial reports

and audited accounts of the plaintiff have been placed on

record as Annexure „H‟.

2.4 The plaintiff claims its hotel chain to be the country‟s

first moderately priced, upscale, full service, business and

leisure hotels for catering to the needs of affluent and

middle class society. The plaintiff claims to have acquired

high reputation in the market widely recognized in the

country as well as abroad. The plaintiff further claims to

have widely advertised in the media. The annual revenue

generated and the expenditure incurred on

advertisements by the plaintiff for the years ending 31st

March, 2005 to 31st March, 2009 are given in para 18 of

the plaint. In the year ending 31st March, 2005, the

plaintiff generated revenue of `2,38,31,842/- out of which

the plaintiff spent `2,00,051/- on advertisements. The

annual revenue of the plaintiff increased to

`56,24,55,700/- in the year ending 31st March, 2009 out of

which the plaintiff has spent `26,34,238/- on the

advertisements. The copies of the audited reports of the

plaintiff for the years 2004-05 to 2008-09 are on record as

Annexure „H‟. The write ups of the plaintiff‟s hotels are on

record as Annexure-I.

2.5 On 17th September, 2009, the plaintiff came to know

that the defendant had started construction of residential

apartments under the name and style of "Lemon Tree

Apartments" at Madhapur, Hyderabad at a distance of

about 2 kms from their hotel at Hyderabad known as

Lemon Tree Hotel. The brochure of the defendant is on

record as Annexure-J. The plaintiff immediately thereafter

instituted the present suit seeking the injunction against

the defendant.

2.6 The adoption and use of trademark "Lemon Tree" by

the defendant is not bonafide and innocent but malafide

and with the dishonest intention of encashing the goodwill

and reputation of the plaintiff. The defendant had been

carrying on its construction business since the year 1997

in the name of M/s Vaishnavi Estates (P) Ltd. The

defendant adopted the trademark "Lemon Tree" in 2009 in

respect of its project at a distance of 2 kms from the

plaintiff‟s hotel after the plaintiff‟s hotel at Madhapur,

Hyderabad came into existence in 2008. According to the

plaintiff, the defendant has no justification for adopting the

plaintiff‟s registered trademark "Lemon Tree".

2.7 The defendant‟s trademark "Lemon Tree" is identical

with the plaintiff‟s registered trademark. It is submitted

that services of the defendant are also similar to the

services of the plaintiff. The plaintiff is in the hotel

business whereas the defendant is in the business of

construction of housing apartments and the activities are

similar and, therefore, the use of the trademark "Lemon

Tree" by the defendant amounts to infringement of

trademark under Section 29(2)(a) & (b) of the Trade Marks

Act, 1999.

2.8 Assuming though not admitting that the services of

the plaintiff and the defendant are not similar, the use of

the trademark "Lemon Tree" by the defendant amounts to

infringement of trademark even under Section 29(4) of the

Trade Marks Act, 1999 as the plaintiff‟s registered

trademark "Lemon Tree" has reputation in India.

3. Defence of the defendant

3.1 The defendant honestly and bonafidely adopted the

trademark "Lemon Tree Apartments" in the year 2008 in

relation to one of its housing projects launched in 2008-09

in Hyderabad.

3.2 The defendant‟s trademark has become distinctive of

the defendant‟s business. The defendant has already

invested huge amount in the said business.

3.3 The defendant has given wide publicity to its project

under the said trademark. The defendant has invested

heavily in promotion, advertisement and publicity of the

housing projects.

3.4 The defendant is the proprietor of the trademark

"Lemon Tree Apartments" and has the exclusive rights to

use thereof.

3.5 The defendant‟s business and services are not

similar to the business/services of the plaintiff. Whereas

the plaintiff is carrying on the business of hotels and

hospitality, the defendant is involved in housing projects.

The plaintiff‟s business activities are covered in Class 42

whereas the defendant‟s business/activities are covered in

Class 36. The customers/users of both the business and

activities are different and different classes of consumers

are the end users of the two services.

3.6 There is no scope of the defendant passing off his

goods and business as that of the plaintiff.

3.7 The plaintiff is not holding any trademark registration

for goods/services in Class 36 or 37 which cover the

defendant‟s goods/services.

3.8 The defendant‟s trademark has few add-ons by way

of distinctive work due to which it is distinct from the

plaintiff‟s trademark.

3.9 The use of trademark "Lemon Tree" by the

defendant does not amount to infringement under

Sections 29(2)(a) and (b) of the Trade Marks Act, 1999

because the business and services of the plaintiff and the

defendant are different and there is no likelihood of

confusion on the part of the public.

3.10 The use of trademark "Lemon Tree" by the

defendant would not amount to infringement under

Section 29(4) of the Trade Marks Act, 1999 because the

plaintiff has no reputation.

3.11 The plaintiff has pirated the trademark "Lemon Tree"

from Lemon Tree Hotel in USA which is in business since

the year 1998 as per the internet downloads filed by the

defendant.

4. Learned counsel for the plaintiff in the rejoinder

vehemently denied that the defendants honestly and

bonafidely adopted the trade mark "Lemon Tree". The

plaintiff further denied that the defendant has invested

heavily in promotion, advertisement and publicity as

neither any material has been placed on record nor any

particulars have been furnished by the defendant in this

regard. The plaintiff is in the business of hotel industry

since 2002 and has already invested more than `5,000

crores. The plaintiff has established the brand "Lemon

Tree" in the market whereas the defendant adopted the

said mark in 2009 with the sole intention of encashing the

goodwill and reputation of the plaintiff. The defendant has

no explanation as to why it changed its earlier name

Vaishnavi Estates to "Lemon Tree" all of a sudden in 2009.

Since the suit was filed immediately after the defendant

entered into the market, no prejudice would be caused to

the defendant if they are restrained from using the brand

"Lemon Tree". With respect to the defendant‟s plea that

the plaintiff is a pirate because Lemon Tree Hotel was

being run in the USA much prior to the alleged adoption of

the mark by the plaintiff, the plaintiff submitted that the

photocopy of the document downloaded from the internet

by the defendant shows that Lemon Tree hotel in the U.S.

was operated by two Australian families, who have been in

the business of providing accommodation since 1998,

from which it cannot be assumed that the Australian

families are running hotel business under the trade mark

"Lemon Tree" since 1998. It was further submitted that

there was no material to show that the said mark used

abroad enjoyed any reputation in India at any point of time

when the plaintiff adopted the same and the use of the

said mark abroad was to the knowledge of the plaintiff

when the plaintiff adopted the mark in India.

5. Judgments relied upon by the plaintiff

5.1 Ozone SPA Private Limited vs. Ozone Club, 2010 (42) PTC 469 (Del.)

In this case, the plaintiff was the registered

proprietor of the trademark „OZONE‟ in classes

16,30,32,33 and 42. The plaintiff was running a spa which

falls in class 41 whereas the defendant was running fitness

centre, health club and gymnastics. This Court held that

the plaintiff‟s mark had acquired goodwill and reputation

and, therefore, was covered under Section 29(4) of the

Trade Marks Act for protection of the mark relating to

dissimilar goods as the use of mark by the defendant

would be of unfair advantage and detrimental to the mark

of the plaintiff. The relevant finding of the Court are as

under:-

"19. Now I shall deal with the contentions raised by the defendant. The first objection of the defendant is that the suit for infringement of the trade mark is not maintainable as the plaintiff has no registration in its favour in class 41 of the Schedule IV of the classification, thus, the plaintiff cannot invoke the jurisdiction under Section 134 of the Act. From the documents filed by the plaintiff it appears, prima facie, that the trade mark "Ozone" adopted and used by the plaintiff has acquired secondary meaning by virtue of long and continuous user. In support of the claim of goodwill and reputation, the plaintiff has furnished the statement of sale and promotional expenses as well as the documents to show that the mark "Ozone" has been continuously used and advertised in various modern media and the mark was adopted to distinguish with the services of the plaintiff. The plaintiff has filed the ample evidence on record to show their business activities and extensive advertisement and in view of that, there is no hesitation to come to the conclusion that the said name "Ozone" is known

mark in relation to the services provided by the plaintiff despite of the fact that the plaintiffs application for registration in class 41 of Schedule IV of the Classification in relation to health club and related services is pending for registration but at the same time it is an admitted fact that the plaintiff has got the registration in class 42 in relation to services such as medical, hygiene and beauty care etc.

20. As regards the suit for infringement is concerned, undisputedly the plaintiffs trade mark "Ozone" is registered in respect of the various goods in classes 16, 30, 32, 33 and particularly in class 42 in respect of goods including hygiene and beauty care services. Although, these are not same services but somehow they are connected with the services provided by the plaintiff under the mark "Ozone" the mark which has already acquired a residual goodwill and reputation, therefore, this Court is of the considered opinion that the present matter covers under the dicta of Section 29(4) of the Act where the protection of the mark is given to the dissimilar goods as use of the mark by the defendant would be unfair advantage of or is detrimental to the mark of the plaintiff, therefore, it is a well known trade mark within the meaning of Section 2(1)(zg) of the Act and have the present case covered under Section 29(4) of the Act."

(Emphasis Supplied)

5.2 Rolex SA v. Alex Jewellery Pvt. Ltd., 2009 (6) R.A.J. 489 (Del.)

The plaintiff was the proprietor of the well known

registered trademark „ROLEX‟ in respect of watches in

class 14. The defendant used the said mark in respect of

artificial jewellery which was challenged by the plaintiff.

This Court held as under:-

"13. The counsel for the plaintiff had in opening submissions pitched her case primarily on Section 29(4) of the Act. Trademark, traditionally is with respect to particular class of goods - there could be infringement thereof only by use of similar or deceptively similar mark with respect to same class of goods. Section 29(4) is a major departure. Thereunder use of similar/deceptively similar mark in relation to goods which are not similar to those for which the trademark is registered has been included in the definition of infringement, if the condition of Section 29(4)(c) are met.

14. The trademark ROLEX has been registered in favour of the plaintiff with respect to watches etc since much prior to the user claimed by the defendants from 1995. If the plaintiff satisfies the test of Section 29(4)(c), the plaintiff even on the basis of its registrations other than with respect to jewellery, would be entitled to maintain an action of infringement against defendants with respect to jewellery. The only question to be determined at this

prima facie stage is whether the registered trademark ROLEX of the plaintiff, in relation to watches, has a reputation in India and the use of the mark by the defendants is without due cause and takes unfair advantage of and/or is detrimental to the distinctive character or repute of the registered trademark.

15. Section 2(z)(g) defines a well known trademark as the one which in relation to any goods, means a mark which has become so to the substantial segment of the public which uses such goods that the use of such mark in relation to other goods would be likely to be taken as indicating a connection in the course of trade between those goods and a person using the mark in relation to the first mentioned goods. In my view the segment of the public which uses the watches of the category/price range as the watches of the plaintiff, ROLEX is a well known trademark. The said segment of the public if comes across jewellery/artificial jewellery also bearing the trademark ROLEX is likely to believe that the said jewellery has a connection to the plaintiff."

(Emphasis Supplied)

5.3 Vardhman Properties Ltd. v. Vardhman Developers and Infrastructures, 166 (2010) DLT 782

The plaintiff, a real estate developer was the

registered proprietor of the trademark VARDHAMAN

GROUP whereas the defendant was involved in the

business of booking flats and real estate consultancy. This

Court restrained the defendant from using the mark

VARDHMAN. The relevant portion of the said judgment are

as under:-

"13. The concept of dilution had previously been evolved on a case-to- case basis by the Courts in India, as a result of which there was a kind of nebulousness and flexibility in its application. With the advent of Section 29, which articulates the right to registered trademark proprietor to sue for infringement, the statutory remedies are delineated with more clarity. Sections 29(1) to (3) of the Act, deal with infringement of trademarks, by the use of similar or identical marks (by the alleged infringer), in relation to same or similar goods or services. Significantly, Section 29(3) mandates the presumption ("shall") in relation to such class of infringement. However, infringement arises in relation to dissimilar goods or services only if certain essential ingredients are proved, i.e. (1) the senior mark being a registered; (2) the identity or close similarity of the junior mark with that of the registered proprietor's; (3) the existence of a distinctive reputation of the registered proprietor's mark's; (4) use of the mark by the junior mark or the infringer in relation to

dissimilar goods or services; (5) that such use being without due or reasonable cause; and (6) the use by the infringer causing detriment to the registered proprietor. ..."

(Emphasis Supplied)

5.4 Indian Shaving Products Ltd. v. Gift Pack, 1998 PTC (18) (Del.) -

This Court rejected the argument raised by the

defendant that the impugned mark was also being used by

the some other person. The findings of this Court are as

under:-

"52. It was next argued by the learned counsel for the defendant that the said trade mark Ultra is being used by several other persons/companies besides the defendants such as Toshiba, National and Sony. Thus the same has become publici Jurisdiction and the plaintiffs cannot claim any exclusive right therein.

53. Admittedly, the said parties are not before this Court. Neither the said parties are claiming any relief against the plaintiffs nor the plaintiffs are claiming any relief against them. Hence the said defense, that other persons are also using the said trade mark, is not available to the defendants. The Court is called upon to decide disputes in between the parties which are before it. The Court cannot be expected to

adjudicate upon a dispute which is not before it. A matter very much akin to the matter in hand came up before a single Judge of this Court. It was observed in Cool ways India Vs. Prince Air Conditioning and Refrigeration 1993 (1) Arbitration Law Reporter 401. The contention that a plaintiff himself is usurping or infringing the trade mark of a third party was not to be gone into by the Court while deciding the issue in between the parties. What is to be seen by the Court is as to whether the plaintiff has acquired good-will and reputation for his products. Moreover, the plaintiffs have placed on record a report on Urban Market for Batteries, October, 1997. A perusal of the same shows that Sony New Ultra was sold only one unit during the month of May, 1997. There is no sale in the month of June, July, August, September, 1997. Similarly, Sony has got no market share during the months of May, June, July, August and September, 1997. Thus the same is absolutely of no avail to the defendants. To the same effect is the view expressed by a learned Single Judge of this Court in Amrit Soap Company Vs. New Punjab Soap Factory 1989 (2) Arbitration Law Reporter 242. "The allegation that some other manufacturers are also using the same trade mark is of no consequence as the Court is concerned with parties before it only."

(Emphasis Supplied)

5.5 Mahendra & Mahendra Paper Mills Ltd. v. Mahindra & Mahindra Ltd., 2002 (24) PTC 121 (SC) -

The plaintiff was the proprietor of the trademark

„MAHENDRA‟. The Supreme Court referred to the Bombay

High Court case of Kirloskar Diesal Recon Pvt. Ltd vs.

Kirloskar Property Ltd., AIR 1996 Bombay 149 which laid

down the following test:-

"22. ...The real question in each case is whether there is as a result of misrepresentation a real likelihood of confusion or deception of the public and consequent damage to the plaintiff. The focus is shifted from the external objective test of making comparison of activities of parties to the state of mind of public in deciding whether it will be confused. ..."

(Emphasis Supplied)

5.6 Roca Sanitario S.A. v. Naresh Kumar Gupta, MANU/DE/2040/2010

In this case, the plaintiff was the proprietor of

trademark „ROCA‟ which was adopted by the defendant in

respect of the same goods in India. The interim injunction

was declined on the ground that the plaintiff was not able

to prima facie show cross border reputation.

6. Judgments relied upon by the defendant

The learned counsel for the defendant has referred

to and relied upon ITC Ltd. vs. Philips Morris Products,

2010 (42) PTC 572 (Del.), Skol Breweries vs. Unisafe

Technologies, 2010 (44) PTC 209 (Del.), Khoday

Distilleries Ltd. vs. Scotch Whisky Association, 2008

(37) PTC 413 (SC), Kellog Company vs. Pravin

Kumar Bhadabhai, 1996 PTC (16), Johnson &

Johnson and Another vs. Christine Hoden (P) Ltd.,

1988 PTC 39 and J.K. Oil Industries vs. Adani Wilmar

Ltd., 2010 (42) PTC 639 (Del.).

7. Plaintiff's response to the judgments cited by the defendant

The learned counsel for the plaintiff has submitted

that the aforesaid judgments cited by the defendant do

not apply to the present case for the reasons given

hereunder:-

7.1 In ITC Ltd. vs. Philips Morris Products, 2010

(42) PTC 572 (Del.), the plaintiff‟s trade mark was a logo

which resembles a „W‟, generally used with the words

„WELCOME GROUP‟ whereas the defendant‟s trade mark

was logo of „M‟ with the word mark „MARLBORO‟. This

Court refused the injunction on the ground that the

competing marks were entirely different and there was no

chance of any confusion or deception.

7.2 In Skol Breweries vs. Unisafe Technologies,

2010 (44) PTC 209 (Del.), the plaintiff was using the

trade mark „KNOCKOUT‟ in respect of beer. The defendant

started selling defence pepper spray under the trade mark

„KNOCKOUT‟. The injunction was refused on the ground

that the plaintiff had not placed any evidence on record to

establish that the trademark „KNOCKOUT‟ had acquired

distinctiveness to the extent that the consumers would be

confused if they came across pepper spray with the trade

mark „KNOCKOUT‟ and the nature of business of the

parties was totally different and unrelated.

7.3 Khoday Distilleries Ltd. vs. Scotch Whisky

Association, 2008 (37) PTC 413 (SC) was a case of

rectification/cancellation. The petitioners before the

Supreme Court had adopted and registered the trade mark

„PETER SCOT‟ in respect of whisky in 1968. The

respondent [Scotch Whisky Association (Scotland)] came

to know about the said registration in 1974 but they filed

rectification petition in 1986. The rectification petition was

dismissed by the Supreme Court broadly on the ground

that there had been an unexplained delay of more than 18

years and the adoption of trade mark „PETER SCOT‟ was

bona fide.

7.4 In Kellog Company vs. Pravin Kumar

Bhadabhai, 1996 PTC (16) (Del.), the plaintiff was the

registered proprietor of trade mark "KELLOG‟S CORN

FLAKE". The defendant launched the corn flakes under

the trade mark "AIMS ARISTO CORN FLAKE" prominently

displayed on the boxes. However, the boxes carried some

colour combination similar to the plaintiff‟s box. This Court

has observed that since the marks are entirely different,

there was no chance of any confusion or deception.

7.5 In Johnson & Johnson and Another vs. Christine

Hoden (P) Ltd., 1988 PTC 39 (Del.), the plaintiff‟s trade

mark was „STAYFREE‟ in respect of sanitary napkins. The

defendants started using the trade mark "COMFIT

ALWAYS". The main trade mark used by the defendants

was "COMFIT ALWAYS" and the word "STAYFREE" was

used in descriptive sense. This Court refused the injunction

as the two marks were entirely different and there was no

likelihood of confusion and deception on the part of the

public.

7.6 In J.K. Oil Industries vs. Adani Wilmar Ltd.,

2010 (42) PTC 639 (Del), the plaintiff‟s trade mark was

"OIL KINGS" in respect of oil. The defendant adopted the

trade mark (label) "KING‟S" Label. The injunction was

refused because the trademark "KING‟S" registered and in

use by the defendant in various countries had worldwide

reputation. This Court further noted the fact that the

turnover of the defendant was more than `150 crores and

they had been spending more than `5 crores annually on

advertisement of their brand.

7.7 The learned counsel for the plaintiff submitted that

the aforesaid cases have been decided on peculiar facts

and circumstances of each case. It is further submitted

that the injunction was refused on the ground that the

competing marks were entirely different and, therefore,

there would be no confusion or deception among the

public.

8. Undertaking of the defendant

During the course of arguments on 24th February,

2011, learned counsel for the defendant submitted that

the defendant has used the trade mark "Lemon Tree

Apartments" only in respect of one housing project under

construction at Hyderabad and the defendant has no other

project in the offing, whereupon the defendant was

directed to file an affidavit in this regard. Mr.T. Srinivas,

Managing Director of the defendant, submitted an affidavit

dated 23rd March, 2001 in which it was stated that 358

flats are being constructed in Lemon Tree Apartments, out

of which construction of 125 flats was complete and the

remaining flats were at various stages of construction and

the defendant had already sold 105 flats. The defendant

has placed on record copy of the development agreement

dated 24th July, 2008 between the land owners and the

three developers including the defendants. As per the

said agreement, the defendant and two other developers,

namely, M/s. Aakruti Construction and Deepthi Homes

entered into an agreement with the four co-owners of the

land for construction of multi-storyed building thereon. The

developers have paid a sum of `50 lakhs to the land

owners and have agreed to construct four blocks having

built up area of 4 Lakh square feet. The land owners and

developers have 50% share each in the built up property.

The development agreement does not contain any clause

for giving any name to the project or the apartments. The

Managing Director of the defendant also appeared before

this Court on 23rd March, 2011 and undertook to

confine/restrict to use of trade mark "Lemon Tree

Apartments" in respect of one project in hand and not to

use the same for any other project.

9. Findings

9.1 Prima Facie Case

On careful consideration of the respective

contentions of both the parties, this Court is of the prima

facie view that the plaintiff has a strong prima facie case

for grant of ad-interim injunction because:-

9.1.1 The plaintiff is the registered proprietor of the

trademark "Lemon Tree".

9.1.2 The plaintiff is in continuous use of the said

trademark since October, 2002.

9.1.3 The plaintiff has eleven operational hotels and

eight hotels are under construction all over the country.

9.1.4 The plaintiff has invested more than `5,000

crores in the hotel business.

9.1.5 The plaintiff has prima facie reputation in

respect of the said trademark on the basis of the aforesaid

facts, annual revenues and the expenses on

advertisements.

9.1.6 The defendant adopted the identical trade mark

"Lemon Tree" without any justification in year 2009 in

respect of its project at a distance of 2 kilometers from the

plaintiff‟s hotel which came into existence in 2008. The

adoption of the plaintiff‟s trade mark "Lemon Tree" by the

defendant appears to be dishonest with the sole intention

to encash the goodwill and reputation of the plaintiff.

9.1.7 The defendant‟s claim that the mark "Lemon

Tree" has become distinctive of their business and they

have invested huge amount and have given vide publicity

is misconceived in as much as the plaintiff instituted this

suit in 2009 itself immediately after becoming aware of

the defendant‟s use. The defendant has also not placed on

record any material to substantiate its claim. The entire

defense of the defendant appears to be frivolous.

9.1.8 The defendant‟s mark "Lemon Tree

Apartments" is identical to the registered trade mark of

the plaintiff; the services of the plaintiff and the defendant

are similar (the plaintiff is in hotel business whereas the

defendant is in the business of construction); it is likely to

cause confusion to the public that the defendant‟s "Lemon

Tree Apartments" have an association with the plaintiff

and, therefore, the plaintiff is entitled to protection under

Section 29(2) and (3) of the Trade Marks Act.

9.1.9. Even if the services of the plaintiff and the

defendant are taken to be not similar as contended by the

defendant, the plaintiff is entitled to protection under

Section 29(4) of the Trade Marks Act as the plaintiff has

reputation in India; use of the infringing mark by the

defendant is without any justification; the defendant has

taken unfair advantage and it is detrimental to the

distinctive character as well as the repute of the plaintiff‟s

registered trade mark.

9.1.10 With respect to the plea that there is a Lemon

Tree Hotel in USA, the defendant has not been able to

show cross border reputation of the said hotel in India.

9.2 Balance of convenience

9.2.1 The balance of convenience lies in favour of the

plaintiff and against the defendant as the plaintiff is the

registered proprietor of the trademark "Lemon Tree" and

is in continuous use since October, 2002 with eleven

operational hotels and eight hotels under construction all

over the country with an investment of more than `5,000

crores.

9.2.2 On the other hand, the defendant who had

been carrying on its construction business in the name of

Vaishnavi Estates (P) Ltd since 1997, adopted the

plaintiff‟s trademark "Lemon Tree" without any

justification in 2009 with the full knowledge of the

plaintiff‟s hotel in Hyderabad at a distance of about 2 kms

from the plaintiff‟s project and the plaintiff immediately

filed the present suit.

9.2.3 The defendant is using the plaintiff‟s registered

trade mark "Lemon Tree" in respect of one project.

9.2.4 The defendant has given an undertaking to this

Court on 23rd March, 2011 not to use the said trademark

for any other project. Even one project in respect of which

the defendant is using the trademark "Lemon Tree" is a

joint venture agreement in respect of which the defendant

has already sold more than 105 flats.

9.2.5 It is not disputed that the defendant has only

limited interest in the project till the sale of the flats.

9.2.6 The defendant cannot ride on the plaintiff‟s

goodwill and reputation to sell the remaining flats.

9.3 Irreparable loss and injury

The plaintiff would suffer irreparable loss and injury

in case the defendant is not restrained from using the

plaintiff‟s registered trademark. If the defendant is not

restrained from using the plaintiff‟s registered trademark

"Lemon Tree", it would also dilute the plaintiff‟s trademark

and would also cause confusion to the public, who would

associate the defendant‟s project with the plaintiff.

9.4 Relevant judgments

This case is squarely covered by the principles laid

down in Ozone SPA Private Limited (supra), Rolex SA

(supra), Vardhman Properties Ltd. (supra), Indian

Shaving Project Limited (supra) and Mahendra &

Mahendra Paper Mills Ltd. (supra). With respect to the

judgments cited by the defendant, this Court accepts the

submissions of the plaintiff recorded in para 7 above.

10. Conduct of the defendant

10.1. In Dalip Singh v. State of U.P., (2010) 2 SCC

114, the Supreme Court noted as under:-

"1. For many centuries, Indian society cherished two basic values of life i.e.

„Satya' (truth) and „Ahimsa' (non- violence). Mahavir, Gautam Buddha and Mahatma Gandhi guided the people to ingrain these values in their daily life. Truth constituted an integral part of the justice-delivery system which was in vogue in pre-Independence era and the people used to feel proud to tell truth in the courts irrespective of the consequences. However, post- Independence period has seen drastic changes in our value system. The materialism has over-shadowed the old ethos and the quest for personal gain has become so intense that those involved in litigation do not hesitate to take shelter of falsehood, misrepresentation and suppression of facts in the court proceedings. In the last 40 years, a new creed of litigants has cropped up. Those who belong to this creed do not have any respect for truth. They shamelessly resort to falsehood and unethical means for achieving their goals. In order to meet the challenge posed by this new creed of litigants, the courts have, from time to time, evolved new rules and it is now well established that a litigant, who attempts to pollute the stream of justice or who touches the pure fountain of justice with tainted hands, is not entitled to any relief, interim or final."

10.2. In Padmawati and Ors. v. Harijan Sewak

Sangh, 154 (2008) DLT 411, this Court noted as under:

"6. The case at hand shows that frivolous defences and frivolous litigation is a calculated venture involving no risks situation.

You have only to engage professionals to prolong the litigation so as to deprive the rights of a person and enjoy the fruits of illegalities. I consider that in such cases where Court finds that using the Courts as a tool, a litigant has perpetuated illegalities or has perpetuated an illegal possession, the Court must impose costs on such litigants which should be equal to the benefits derived by the litigant and harm and deprivation suffered by the rightful person so as to check the frivolous litigation and prevent the people from reaping a rich harvest of illegal acts through the Courts. One of the aim of every judicial system has to be to discourage unjust enrichment using Courts as a tool. The costs imposed by the Courts must in all cases should be the real costs equal to deprivation suffered by the rightful person."

xxxxxx

"9. Before parting with this case, I consider it necessary to pen down that one of the reasons for over-flowing of court dockets is the frivolous litigation in which the Courts are engaged by the litigants and which is dragged as long as possible. Even if these litigants ultimately loose the lis, they become the real victors and have the last laugh. This class of people who perpetuate illegal acts by obtaining stays and injunctions from the Courts must be made to pay the sufferer not only the entire illegal gains made by them as costs to the person deprived of his right and also must be burdened with exemplary costs. Faith of people in judiciary can only be sustained if the persons on the right side of the law do not feel that even if they keep

fighting for justice in the Court and ultimately win, they would turn out to be a fool since winning a case after 20 or 30 years would make wrong doer as real gainer, who had reaped the benefits for all those years. Thus, it becomes the duty of the Courts to see that such wrong doers are discouraged at every step and even if they succeed in prolonging the litigation due to their money power, ultimately they must suffer the costs of all these years long litigation. Despite settled legal positions, the obvious wrong doers, use one after another tier of judicial review mechanism as a gamble, knowing fully well that dice is always loaded in their favour, since even if they lose, the time gained is the real gain. This situation must be redeemed by the Courts."

(Emphasis supplied)

This Court imposed costs of `15.1 lakhs in the above

case against which Special Leave to Appeal (Civil) No

29197/2008 was preferred to the Supreme Court. On 19th

March, 2010, the Supreme Court passed the following

order:

"We have heard learned Counsel appearing for the parties. We find no ground to interfere with the well- considered judgment passed by the High Court. The Special Leave Petition is, accordingly, dismissed."

10.3 I agree with the findings by the learned Judge in

Padmawati's case (supra) and wish to add a few words.

There is another feature which has been observed and it is

of unscrupulous persons filing false claims or defences

with a view that the other person would get tired and

would then agree to compromise with him by giving up

some right or paying some money. If the other party is not

able to continue contesting the case or the Court by

reason of falsehood falls into an error, the wrong

succeeds. Many times, the other party compromises, or at

other times, he may continue to fight it out. But as far as

the party in the wrong is concerned, as this Court noted in

Padmawati's case (supra), even if these litigants

ultimately lose the lis, they become the real victors and

have the last laugh.

10.4 In the present case, the conduct of the defendant does

not appear to be honest. The defendant has raised a

frivolous defence with the hope that the defendant can, with

the Court delays, drag the case for years and the other side

would succumb to buy peace. If the other side does not so

settle in the end, they are hardly compensated and remains

a loser.

11. Imposition of Costs

In the recent judgment dated 4th July, 2011 in the case

of Ramrameshwari Devi v. Nirmala Devi,

MANU/SC/0714/2011, the Supreme Court has held that the

Courts have to take into consideration pragmatic realities

and have to be realistic in imposing the costs. The relevant

paragraphs of the said judgment are reproduced hereunder:-

"45. ...We are clearly of the view that unless we ensure that wrongdoers are denied profit or undue benefit from the frivolous litigation, it would be difficult to control frivolous and uncalled for litigations. In order to curb uncalled for and frivolous litigation, the courts have to ensure that there is no incentive or motive for uncalled for litigation. It is a matter of common experience that court's otherwise scarce and valuable time is consumed or more appropriately wasted in a large number of uncalled for cases."

"52. The main question which arises for our consideration is whether the prevailing delay in civil litigation can be curbed? In our considered opinion the existing system can be drastically changed or improved if the following steps are taken by the trial courts while dealing with the civil trials.

A. Pleadings are foundation of the claims of parties. Civil litigation is largely based on

documents. It is the bounden duty and obligation of the trial judge to carefully scrutinize, check and verify the pleadings and the documents filed by the parties. This must be done immediately after civil suits are filed.

B. The Court should resort to discovery and production of documents and interrogatories at the earliest according to the object of the Act. If this exercise is carefully carried out, it would focus the controversies involved in the case and help the court in arriving at truth of the matter and doing substantial justice.

C. Imposition of actual, realistic or proper costs and or ordering prosecution would go a long way in controlling the tendency of introducing false pleadings and forged and fabricated documents by the litigants. Imposition of heavy costs would also control unnecessary adjournments by the parties. In appropriate cases the courts may consider ordering prosecution otherwise it may not be possible to maintain purity and sanctity of judicial proceedings.

D. The Court must adopt realistic and pragmatic approach in granting mesne profits. The Court must carefully keep in view the ground realities while granting mesne profits.

E. The courts should be extremely careful and cautious in granting ex-parte ad interim injunctions or stay orders. Ordinarily short notice should be issued to the Defendants or Respondents and only after hearing concerned parties appropriate orders should be passed.

F. Litigants who obtained ex-parte ad interim injunction on the strength of false pleadings and forged documents should be adequately punished. No one should be allowed to abuse the process of the court.

G. The principle of restitution be fully applied in a pragmatic manner in order to do real and substantial justice.

H. Every case emanates from a human or a commercial problem and the Court must make serious endeavour to resolve the problem within the framework of law and in accordance with the well settled principles of law and justice.

I. If in a given case, ex parte injunction is granted, then the said application for grant of injunction should be disposed of on merits, after hearing both sides as expeditiously as may be possible on a priority basis and undue adjournments should be avoided.

J. At the time of filing of the plaint, the trial court should prepare complete schedule and fix dates for all the stages of the suit, right from filing of the written statement till pronouncement of judgment and the courts should strictly adhere to the said dates and the said time table as far as possible. If any interlocutory application is filed then the same be disposed of in between the said dates of hearings fixed in the said suit itself so that the date fixed for the main suit may not be disturbed.

53. According to us, these aforementioned steps may help the courts to drastically

improve the existing system of administration of civil litigation in our Courts. No doubt, it would take some time for the courts, litigants and the advocates to follow the aforesaid steps, but once it is observed across the country, then prevailing system of adjudication of civil courts is bound to improve.

54. While imposing costs we have to take into consideration pragmatic realities and be realistic what the Defendants or the Respondents had to actually incur in contesting the litigation before different courts. We have to also broadly take into consideration the prevalent fee structure of the lawyers and other miscellaneous expenses which have to be incurred towards drafting and filing of the counter affidavit, miscellaneous charges towards typing, photocopying, court fee etc.

55. The other factor which should not be forgotten while imposing costs is for how long the Defendants or Respondents were compelled to contest and defend the litigation in various courts. The Appellants in the instant case have harassed the Respondents to the hilt for four decades in a totally frivolous and dishonest litigation in various courts. The Appellants have also wasted judicial time of the various courts for the last 40 years.

56. On consideration of totality of the facts and circumstances of this case, we do not find any infirmity in the well reasoned impugned order/judgment. These appeals are consequently dismissed with costs, which we

quantify as `2,00,000/- (Rupees Two Lakhs only). We are imposing the costs not out of anguish but by following the fundamental principle that wrongdoers should not get benefit out of frivolous litigation."