Pradeep Gupta vs K. Brahmanandam
2024 Latest Caselaw 988 Tel

Telangana High Court

Pradeep Gupta vs K. Brahmanandam on 7 March, 2024

HON'BLE SRI JUSTICE LAXMI NARAYANA ALISHETTY
                  C.M.A.Nos.544 & 548 of 2023

COMMON JUDGMENT:

Since the parties to the appeals are one and the same and the

issues involved in both the appeals are interconnected, both the

appeals are heard together and are disposed of by this common

judgment.

2. Heard Sri Bankatlal Mandhani, learned counsel for the

appellant, as well as Sri P.Venkatarama, learned counsel for the

respondents. Perused the entire material available on record.

3. CMA.No.544 of 2023 is filed challenging the order dated

06.10.2023 passed by the XII Additional Chief Judge,

Secunderabad, in I.A.No.10 of 2023 in O.S.No.2 of 2023. The said

I.A.No.10 of 2023 was filed to restrain the respondent therein from

using the trade mark 'PRITI' in relation to the sewing machines of

his manufacture and the same was allowed by the trial Court.

4. CMA.No.548 of 2023 is filed challenging the order dated

06.10.2023 passed by the XII Additional Chief Judge,

Secunderabad, in I.A.No.564 of 2020 in O.S.No.54 of 2020. The

said I.A.No.564 of 2020 was filed for grant of temporary injunction

against the defendant from dealing or selling sewing machine with

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the Trade brand word 'PRITI' to any person pending disposal of

the suit and the same was dismissed by the trial Court.

5. Succinctly stated, the facts of the case, shorn off unnecessary

details, are that originally, the appellant's father started

manufacturing machines with trade brand name 'PRITI', after

obtaining necessary license from the authorities. He migrated from

Delhi to Hyderabad. The appellant's father also registered the

brand word 'PRITI' with Registrar of Trade Marks which was

continued till 2013. The appellant's father opened a Sales outlet of

'PRITI' sewing machine and obtained various trade licenses and

General Sale Tax Registration Certificate, etc. in the name of

appellant's mother-Usha Gupta in the year, 1974. Since then, the

appellant's mother carried on the business of sale of sewing

machine under the trade name and style of M/s 'PRITI' Sewing

Machine Company and necessary licenses were issued for the said

business in the name of appellant's mother. After the death of

appellant's mother in the year 2019, the appellant succeeded the

business of selling sewing machines under the trade brand name

'PRITI' by obtaining necessary licenses.

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5.1. While so, the appellant came to know through Google

search in second week of September, 2020, that the respondent

applied for registration of the word 'PRITI' for doing sewing

machine business in the year, 2017 and he is passing off in the

name of 'PRITI Sewing Machine' since 2017. The appellant and his

mother developed the sale of 'PRITI' trade brand sewing machine

and got published the advertisements in daily newspaper.

Therefore, the appellant is not only the proprietor, but also the

owner of the trade mark by name 'PRITI'. But since 2017, the

turnover was reduced and on his enquiry, the appellant came to

know that the respondent is doing passing off business under the

trade name of 'PRITI'.

5.2. The appellant issued notice to respondent to stop the

passing off business, but he replied that he is doing business of

selling of sewing machines with the trade name of 'PRITI' since

2008 and got registration of the trade mark "PRITI" with the

Registrar of Trade Marks on 10.07.2019. The appellant is the prior

user and first in the market with the trade name 'PRITI for sewing

machines and hence, he is only having right to do the business. The

respondent obtained the registration of trade mark by name 'PRITI

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in the year 2019. So, he cannot do business with the brand name of

'PRITI' for selling sewing machines. The prima facie case and

balance of convenience are in favour of the appellant. So, the

respondent should be injuncted from doing the business under the

name and style of "PRITI' Sewing Machine.

6. The respondent filed counter denying the allegations made

in the petition and concisely, the averments are that the respondent

was engaged in the business of manufacturing and marketing

various varieties of sewing machines from the year 1995 under the

trade name as R.K.Enterprises. During the course of its business,

the respondent intended to take the trade mark as 'PRITI' to one of

the varieties of sewing machines originating from him in the year

2008. Before adopting the trade mark name 'PRITI, the survey of

markets across the country by the defendant revealed that nobody

got the trade mark name for sewing machines as 'PRITI'. Though

the respondent adopted and commenced using the trade mark by

name 'PRITI on 01.01.2008, he has filed an application for

registration on 01.06.2017 and the registration was completed on

25.02.2019. All the accepted marks are to be advertised in the

Trademarks Journals to invite objections, if any, from the public

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within four months from the date of registration of trade mark.

Since, no person made any objection, the trade mark was entered in

the Register of Trademarks. The documents filed by the respondent

from the year 2010 shows that the respondent is the subsequent

user of the Trade mark 'PRITI'.

7. The trial Court upon considering the oral and documentary

evidence and the contentions of both the parties, observed that the

appellant has not got renewed the trade mark 'PRITI' within one

year from the date of removal and hence, it amounts to

abandonment of the said trade mark by him. As such, it negatived

the request of the appellant to restrain the respondent from using

the trade mark 'PRITI' and on the other hand, granted temporary

injunction in favour of the respondent restraining the appellant, his

agents from using the trade mark 'PRITI' in relation to the

manufacturing of the sewing machines till the disposal of the suit.

Challenging the said verdict, the present appeals are filed.

8. Learned counsel for the appellant contended that the

appellant is the prior use of the trade mark 'PRITI', but the trial

Court assuming that since the respondent obtained registration of

trade mark, wrongly held he has got exclusive right to use the trade

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mark in the relation to the goods. He further contended that the

observations of the trial Court that non-renewal of registration

amounts to abandonment of trade mark by the appellant and that as

the respondent obtained registration, he is entitled to temporary

injunction are contrary to law. Hence, prays this Court to allow

these Appeals.

9. Learned counsel for the appellant relied upon the decisions

of the Hon'ble Apex Court in S.Syed Mohideen Vs. P.Sulochana

Bai 1, Dhariwal Industries Ltd and another Vs. M.S.S.Food

Products 2, Neon Laboratories Limited Vs. Medical Technologies

Limited and others 3, Wander Ltd and another Vs. Antox India P.

Ltd 4, Midas Hygiene Industries (Petitioner) Ltd Vs. Sudhir

Bhatia and others 5, the decision of High Court of Delhi in Vinay

Gupta Vs. Amit Arora 6 and Nutrica Pusti Health Care Pvt Ltd Vs.

Morepen Laboratories Ltd in FAO(COMM)46/2021 &

CM.No.7403/2021, dated 09.04.2021, and the decision of High

(2016) 2 SCC 683

(2005) 3 SCC 63

(2016) 2 SCC 672

1990(Supp)SCC 727

(2004) 3 SCC 90

2022 SCC OnLine Del 3249

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Court of Andhra Pradesh in M.Mahendra Shah Vs. Hindustan

Lever Ltd and another 7.

10. Learned counsel for the respondent contended that the trade

mark 'PRITI' was registered in the name of the appellant's father

on 31.01.1989 and thereafter, he never renewed the same. As per

the Trade Marks Act, 1958, the registered trade mark has to be

renewed every seven years and therefore, the respondent has

commenced using the same on 01.01.2008. Subsequently, the trade

mark 'PRITI' was registered in the name of the respondent on

10.07.2019, which shows that the respondent is entitled to claim

exclusive rights thereto. He further contended that the appellant's

father has thus abandoned the trade mark 'PRITI' as he did not get

it renewed within the stipulated time and therefore, the trial Court

rightly granted temporary injunction in favour of the respondent.

Thus, he prayed to dismiss the appeals.

11. Learned counsel for the respondent relied upon the

judgments of the High Court of Delhi in Ellora Industries, Delhi

1997 SCC Online AP 61

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Vs. Banarasi Dass Goela 8 and Om Prakash Gupta Vs. Praveen

Kumar and another 9, the judgments of the Bombay High Court in

Kamat Hotels (India) Ltd. Vs. Royal Orchid Hotels Ltd 10, and the

judgments of the Hon'ble Apex Court in Laxmikant V.Patel Vs.

Chetanbhat Shah and others 11, Neon Laboratories Ltd. Vs.

Medical Technologies Ltd 12, Midas Hygiene Industries P. Ltd

and another Vs Sudhir Bhatia and others 13, Toyota Jidosha

Kabushiki Kaisha Vs. Prius Auto Industries Limited and others 14.

12. In Syed Mohideen's case (1st cited supra), the Hon'ble

Supreme Court in Para 30.1 held as under:-

"From the reading of S.27(2) of the Act, it is clear that the right of action of any person for passing off the goods/services of another person and remedies thereof are not affected by the provisions of the Act. Thus, the rights in passing off are emanating from the common law and not from the provisions of the Act and they are independent from the provisions of the Act. Likewise, the registration of the mark shall give exclusive rights to the use of the trademark subject to other provisions of this Act. Thus, the rights granted by the registration in the form of exclusivity are not absolute but are subject to the provisions of the Act.

AIR 1980 DELHI 254(1)

ILR (2000) II DELHI 124

2011 (3) ABR (NOC) 286 (BOM)

MANU/SC/0763/2001

2015 AIR SCW 6470

2004 (28) PTC 121 (SC)

(2018) 2 SCC 1

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12.1. Further, the Hon'ble Supreme Court at Para 31.1 of its

judgment held as under:-

"Traditionally, passing off in common law is considered to be a right for protection of goodwill in the business against misrepresentation caused in the course of trade and for prevention of resultant damage on account of misrepresentation. The three ingredients of passing off are goodwill owned by the trader, misrepresentation, and damage to goodwill. Thus, the passing off action is essentially an action in deceit where the common law rule is that no person is entitled to carry on his business on the pretext that the said business is of that of another.

12.2. The High Court at Para 36 further held as under:-

"The court is of the considered opinion that allowing the defendant to use the trademark "Tirunelveli Iruttukadai Halwa" will amount to deceiving the public, hence no one can be permitted to encroach upon the goodwill and reputation of other party, particularly when a specific mark, though may be a descriptive word, has acquired a subsidiary meaning and is fully admitted by the particular company and when a meaning is fully admitted by the particular company and when a party cannot be termed as honest current user of the mark on the reputation and good will of the company and a party who cannot be termed as a honest current user of the mark on the reputation and goodwill of the company, it will constitute invasion of the proprietary right. Hence, the same cannot be permitted any longer. In a situation like this, the court has the bounden duty and obligation of the court not only to protect the goodwill and protect

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the goodwill and reputation of the prior user, but also to protect the interest of consumers."

13. In Dhariwal Industries Limited's case (2nd cited

supra), the Hon'ble Supreme Court at Para No.9 held as under:-

"The principles governing the grant of interim injunction are well settled and do not require to be repeated. The interim injunction has been granted mainly on the finding that there was a prior user of the mark "Malikchand", if not by the Plaintiff, by his assignors and the use of the mark "Malikchand"by the Defendants was used only at a later point of time.

14. In Neon Laboratories Limited's case (3rd cited supra),

the Supreme Court at para 9 held as under:-

"...Section 34 of the Trade Marks Act, 1999 palpably holds that a proprietor of a trade mark does not have a right to prevent the use by another party of an identical or similar mark where that user commenced prior to the user or date of registration of the proprietor This "first user" rule is a seminal part of the Act. While the case of the respondent-plaintiffs is furthered by the fact that their user commenced prior to that of the appellant defendant, the entirety of the section needs to be taken into consideration, in that it gives rights to a subsequent user when its user is prior to the user of the proprietor and prior to the date of registration of the proprietor, whichever is earlier."

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14.1. Further, the Hon'ble Supreme Court at para 11 of its

judgment held as under:-

"....The "first in the market" test has always enjoyed pre- eminence. We shall not burden this judgment by referring to the several precedents that can be found apposite to the subject. In the interest of prolixity we may mention only N.R. Dongre v. Whirlpool Corpn {(1996)5 SCC 714} and Milmet Oftho Industries v. Allergan Inc {(2004)12 SCC 624}. In Whirlpool's case, the worldwide prior user was given preference nay predominance over the registered trade mark in India of the defendant. Milmet's case, the marks of pharmaceutical preparation were similar but the prior user worldwide had not registered its mark in India whereas its adversary had done so. This Court approved the grant of an injunction in favour of the prior user. Additionally, in the recent decision in S. Syed Mohiden v. P. Sulochana Bai, this Court has pithily underscored that the rights in a passing-off action emanate from common law and not from statutory provisions, nevertheless the prior user's rights will override those of a subsequent user even though it had been accorded registration of its trade mark.

15. In Wander Limited's case (4th cited supra), the Hon'ble

Supreme Court at Para-15 observed that passing-off action was

based on the asserted right to a trademark said to have been

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acquired by a continuous user. Further, at para 16 it observed

as under:-

"An infringement action is available where there is a violation of specific property rights acquired under and recognized by the statute. In a passing-off action, however, the plaintiff's right is independent of such a statutory right to a trademark and is against the conduct of the defendant which leads to or is intended or calculated to lead to deception."

16. In Midas Hygiene Industries's case (5th cited supra),

the Hon'ble Supreme Court at Para 5 held as under:-

"The law on the subject is well settled. In cases of infringement either of trademark or copyright, normally an injunction must follow. Mere delay in bringing action is not sufficient to defeat grant of injunction in such cases. The grant of injunction also becomes necessary if it prima facie appears that the adoption of the mark was itself dishonest."

17. In Nutrica Pusti Healthcare Pvt. Ltd's case (6th cited

supra), the High Court of Delhi at Para 24 held as under:-

"Though we are of the view that the appeal is liable to be dismissed for the aforesaid reasons alone but even otherwise are of the view that the prima facie finding of the Commercial Court, of similarity/deceptive similarity in the trade marks of the appellants/defendants with that of the respondent/plaintiff, cannot be said to be arbitrary, capricious or perverse, which no reasonable person could have arrived at, or having been arrived at, in ignorance of

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settled principles of law governing grant or refusal of interlocutory injunction. Before Wander Ltd. and in Printers (Mysore) Private Ltd. v. Pothan Joseph, AIR 1960 SC 1156, it was held that where the discretion vested in the Court has been exercised by the Trial Court, the Appellate Court will be slow to interfere with the exercise of said discretion and more so, solely on the ground that if had considered the matter at trial stage, it would have come to a contrary conclusion. It was further held that if the discretion has been exercised reasonably and in a judicial manner, the mere fact that the Appellate Court would have taken a different view, would not justify interference with the Trial Court's exercise of discretion; only if the Trial Court, in exercising its discretion has acted unreasonably or capriciously or has ignored relevant facts and has adopted an unjudicial approach, it would be open to the Appellate Court to interfere in the Trial Court's exercise of discretion."

18. In M.Mahendra Shah's case (7th cited supra), the Hon'ble

High Court of Andhra Pradesh in Para 10 held that the prior use is

of the trade mark and it does not matter with what commodity or

food stuff the same was first used. The person who uses the trade

mark becomes the proprietor of such trade mark. Acc to S.33 of the

Trade and Merchandise Act 1958, even a registered proprietor of

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the said mark cannot restrain others using the same trade mark

prior to him in the market, though not registered.

19. In the judgments referred to and relied upon by the learned

counsel for the appellant, the Hon'ble Supreme Court has granted

relief to the party who has got registered trade mark in his/her

favour. In the present case, the appellant, having got registered the

trade mark 'PRITI' in the year 1989, has failed to get it renewed

after it was removed from the Register in the year 2013.

20. Therefore, the said judgments are distinct to the present case

and thus, are not applicable to the facts of the present case.

21. In Ellora Industries, Delhi's case (8th cited supra) the High

Court of Delhi at Para 12 observed as under:-

"The purpose of passing off tort is to protect commercial

goodwill; to ensure that people's business reputation are not exploited. Since business "goodwill" is an asset, and therefore species of property the law protects it against encroachment as such. The Tort is based on economic policy, the need to encourage enterprise and to ensure commercial stability. It secures a reasonable area of monopoly of traders. It is thus complementary to trade mark law which is founded upon statute rather than common law. But there is a difference between statute law relating to trademarks and the passing off action; for while

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registration of relevant mark, itself gives title to the registered owner, the onus in a passing off action lies upon the plaintiff to establish the existence of the business reputation which he seeks to protect."

22. Further, at Para 13 of its judgment, the High Court of

Delhi observed as under:-

"The plaintiff must establish that his business or goods

have acquired the reputation he alleges. For example, a particular name has become distinctive of his goods and that a reputation has attached to them under the name in question and this can be done by showing that a substantial proportion of people who are likely to become purchasers of the goods in question associate the name with them."

23. In Om Prakash Gupta's case (9th cited supra), the High

Court of Delhi at Para 28 held as under:-

"Once a person has abandoned a trademark by non-user,

he cannot claim any right on the basis of such abandoned trademark, of course, by its given use again and in such a case he would have no remedy against the person who adopts and uses a similar trademark in the meantime."

23.1. Further at para 29, it is held as under:-

"The defendants claim to have adopted and have been

using this trademark since 1993, though according to

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plaintiff it was not before 1995 as the business could not be carried without excise license. But the plaintiff had himself started using the mark in 1999, whereas the suit was filed in August 1999, after a period of four years and during this period the plaintiff did not take any steps to stop this earlier. This would also be a circumstance showing abandonment by the Plaintiff apart from acquiescence.

24. In Kamat Hotels (India) Limited's case (10th cited supra),

the High Court of Bombay at Para 14 observed as under:-

"The most fundamental requirement is four fold. Firstly, the use by a person of a mark which is identical to or nearly resembles a registered trade mark must be in relation to those goods and services for which the first mentioned mark has been registered. Secondly, the use that is postulated by S.34 is a continuous use of the trade mark. Thirdly, in order to avail of the protection the trade mark must be used by the proprietor or by his predecessor in interest. Fourthly, the mark in respect of which protection is sought must have been used from a prior date to the use of registered trade mark or the date of registration of the registered trade mark, whichever is earlier. Further, it is held that a use which is continuous is distinct from a use which is stray, isolated or disjointed. Furthermore, it was held that the use must be continuous. That a use which is continuous is distinct from a use which is stray, isolated or disjointed. The

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notion of continuous use establishes that a mere adoption of a mark is not sufficient. Legislation mandates that in order to avail the benefit of S.34 a test of high order must be fulfilled which requires commercially continuous use in relation to goods and services."

25. In Laxmikant's case (11th cited supra), the Hon'ble

Supreme Court at Para 12 held as under:-

"In Oertlu v. Bowman (1975), the gist of passing off action was defined by stating that it was essential to the success of any claim to passing off based on the use of given mark or get-up that the plaintiff should be able to show that the disputed mark or get up has become by user in the country distinctive of the plaintiff's goods so that the use in relation to any goods of the kind dealt in by the plaintiff of that mark or get up will be understood by the trade and the public in that country as meaning that goods are the plaintiff's goods."

25.1. Further, it was held that the three elements of passing off

action are the reputation of goods, possibility of deception and

likelihood of damages to the plaintiff. In our opinion, the same

principle that applies to trade mark, is applicable to trade name.

25.2. In Para 13 thereof, it was held that in an action for

passing off, it is usual, rather essential to seek an injunction

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temporary or ad-interim. The principles for the grant of such

injunction are the same as in the case of any other action against

injury complained of. The plaintiff must prove a prima facie case,

balance of inconvenience in his favor and his suffering an

irreparable injury in the absence of grant of injunction.

26. In Toyota Jidosha Kabushiki Kaisha's case (14th cited

supra), the Hon'ble Supreme Court at Para 37 held as under:-

"Once the claimant who has brought the action of passing off establishes the good will in the jurisdiction in which he claims that the defendants are trying to pass off their goods under the brand name of claimant's goods, the burden of establishing actual confusion as distinguished from the possibility thereof ought not to be fastened on the claimant."

26.1. Further, at Para 39, the Hon'ble Court held as under:-

"The necessary attributes of the right of the prior user are goodwill, reputation, market or popularity in the Indian market so as to successfully maintain an action of passing off even against the registered owner. In any event, the core of the controversy between the parties is really one of appreciation of the evidence of the parties, an exercise that this court would not undoubtedly repeat unless the view taken by the previous forum is wholly

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and palpably unacceptable which does not appear to be so in the present premises."

27. In Om Prakash Gupta's case (9th cited supra), the High

Court of Delhi held that once a person has abandoned a trademark

by non-user, he cannot claim any right on the basis of such

abandoned trademark.

28. In the instant case, admittedly, the appellant was prior user

having got registered the trade mark 'PRITI' in the year 1989,

however, the same was removed from the Register in the year 2013

and the appellant failed to renew the same within the stipulated

period of one year. Thus, it can be said that the appellant has

abandoned the trade mark 'PRITI' and hence, he cannot claim any

right on the basis of such abandoned trademark.

29. Thus, the judgment in Om Prakash Gupta's case is squarely

applicable to the instant case.

30. A perusal of the record reveals that originally, the father

of the appellant started manufacturing of sewing machines with

trade mark 'PRITI' and opened a Sales outlet of 'PRITI' and

obtained various trade licenses and General Sales Tax Registration

Certificate, etc., in the name of the appellant's mother in the year

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1974 and he applied for registration on 03.07.1978 and the same

was registered on 31.01.1989. However, admittedly, as per the

contention of the appellant, his father was using the trade mark

'PRITI' till 12.04.2013 and thereafter, it was removed from the

Register on 13.04.2013 as his father did not apply for its extension.

Further, the appellant's father did not even make an application in

the prescribed form within one year for restoration of the said trade

mark and renewal of the registration, after its removal from the

Register

31. The respondent has commenced his business in the trade

name 'PRITI' in the year 2014 and he applied for registration of

the trade mark in the year 2017 and obtained registration in the

year 2019. Therefore, the respondent being the registered trade

mark holder filed an application to restrain the appellant from

using the trade mark 'PRITI'.

32. The appellant contended that his family are the prior users

of the trade mark 'PRITI' and that, his father-Deepchand Gupta got

registered the trade mark 'PRITI' and the same was published in

the journal on 16.06.1982. However, the said registration was

removed on 13.04.2013. Admittedly, the appellant did not renew

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the trade mark within one year from the date of removal i.e., on

13.04.2013 under Section 25(4) of the Trade Marks Act, which

amounts to abandonment of trade mark by him. Further, the

appellant also failed to produce documentary evidence to show

continuous use of the trade mark 'PRITI'.

33. The respondent is the registered trade mark holder of trade

mark 'PRITI' at present and therefore, he is entitled to the relief

against infringement of trade mark as specified under Section 28 of

the Trade Marks Act.

34. Passing-off happens when someone deliberately or

unintentionally passes-off their goods or services as those

belonging to another party. In the instant case, there is sufficient

evidence on record to show that the respondent has got registered

the trade mark 'PRITI' in the year 2019 and the appellant failed to

renew the trade mark 'PRITI' from 13.04.2013 and as such, it is

deemed that the appellant has abandoned the trade mark 'PRITI'.

In such an event, the use and registration of the trade mark 'PRITI'

by the respondent in the year 2019 does not amount to passing-off

or infringement of the right of the appellant.

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35. Therefore, for the foregoing discussion and the settled legal

position, this Court does not find prima facie case, balance of

convenience and irreparable loss, which are the three essential

ingredients, in favour of the appellant, for grant of temporary

injunction. As such, this Court does not find any reason to interfere

with the impugned orders, dated 06.10.2023, of the trial court.

36. Consequently, both these Appeals fail and are accordingly

dismissed.

37. Pending miscellaneous applications, if any, shall stand

closed.

__________________________________ JUSTICE LAXMI NARAYANA ALISHETTY Dated:07.03.2024 dr