1. This first appeal has been filed by the defendant challenging the decision of the trial Court decreeing the plaintiff's suit and permanently restraining him from selling or offering for sale or passing off the bidis manufactured by him in the name of Ganesh Bidi in the market and use the labels and wrappers and in Annexures V to VIII of the plaint or in any other name and under any other mark which are similar or deceptively similar to those of the plaintiff. The trial Court further directed the defendant and his agents, servants and all other persons on his behalf to hand over all labels and wrappers to the plaintiff for destruction.

2. The respondent filed the suit, O.S No. 12 of 1980 (Trade mark), in the Court of the District Judge, Cuttack praying for a decree for permanent injunction in the terms indicated above and for mandatory injunction to hand over all labels and wrappers and all manufacturing implements to the plaintiff for destruction and also for a preliminary decree for accounts directing the defendant to render accounts of profits derived by him by manufacture and sale of bidis under the name and style “Ganesh Bidi” and thereafter to pass a final decree directing the defendant to make good the loss sustained by the plaintiff.

The relevant facts pleaded in the plaint are that the plaintiff is the owner and sole proprietor of the firm Ganeswar Swain and Sons. He carries on business as a manufacturer of bidis under the name and style of “Ganesh Bidi” from the year 1956. Ganesh Bidi is the trade name of the goods manufactured by him. As a mark of identification he has been using different labels as per the Annexures I, II, III and IV to the plaint for packing the bidis in different bundles and packets. These labels bear a specific and distinct mark of identification. He has applied for registration of this mark under the Trade and Merchandise Marks Act, 1958 and during pendency of his application he has been allotted provisional Nos. 359577 and 359578 on 14-3-80. It is further stated in the plaint that he has been using the name and the marks for more than twenty years last. On account of such user his goods have received recognition in the market and have become popular amongst the consumers. Due to the good quality of tobacco, bidi leaves and the care and expertise used in manufacture and marketing of the bidis, the goods hive become well known and popular and have acquired good reputation in different parts of the State, particularly in the district of Cuttack. The bidis manufactured by him are in great demand by the dealers and purchasers who usually purchase the same on seeing the labels on different packets.

It is the further case of the plaintiff that the defendant was serving under him till January, 1980 when he left the service. Since April, 1980 the defendant has taken up business of manufacture and sale of bidis. In order to find an easy market for sale of his bidis, he has used the name ‘Ganesh Bidi’ and has been using wrappers and marks deceptively similar to those used by the plaintiff. If the wrappers and labels used by the defendant as per Annexures V, VI, VII and VIII are compared with those of the plaintiff, it would be clear that they have been carefully invented so as to symbolise the name and mark used by the latter. In this process, according to the plaintiff, the defendant has been selling and passing off his bidis under the name and with the mark which are either similar or deceptively similar to those used by the plaintiff. By such use of the name and mark the defendant has been able to procure a good market within a few months. In this process the sale of the plaintiff's bidi has come down considerably within a short span of eight months. The plaintiff also states that the defendant has made no application for registration of any name and mark under the Trade and Merchandise Marks Act, 1958. On these averments the plaintiff filed the suit for the reliefs noticed earlier.

3. The defendant in his written statement while refuting the material facts stated in the plaint, denied that the bidis manufactured by the plaintiff are identified and recognised by any distinctive get up of any label. He also denied that since 1956 the plaintiff has been in exclusive use of the name “Ganesh Bidi” and the mark and the said mark has received recognition amongst the consumers throughout the State. He also denied to have used the name “Ganesh Bidi” and the wrappers and the marks as per Annexures V to VIII to the plaint and thereby captured an easy market for sale of his bidis. He submitted that the allegation that by his action he has been passing off his goods under the name and with the marks which are either similar or deceptively similar to those of the plaintiff is incorrect. It is the case of the defendant that in 1975 he entered the plaintiff's bidi business as a partner paying a sum of Rs. 10,000/- towards its share capital. Though the business was being run in the name and style of “Ganesh Bidi”, the mark, design the picture of the deity, Ganesh, the photo and the colour combination as are found in Annexures I to VIII to the plaint were not being used then on the labels and wrappers. Since the parties could not pull on well in business, the defendant had to part company with the plaintiff in October, 1978 and it was agreed between them that after withdrawing from the partnership the defendant will carry on a separate Bidi manufacturing business in the name of “Ganesh Bidi”. An agreement to this effect was executed by the plaintiff on 24-10-1978. Since the year 1979 the defendant has been carrying on business of manufacture of bidis under the name and style “Ganesh Bidi” after obtaining a 1-4 Licence No. 19 of 1979 from the Central Excise Department. According to the defendant it is he who invented the mark containing the name “Ganesh Bidi” for his business. The specific colour, design and combination on the wrappers and labels were also his creations. The plaintiff became jealous of the attractive design of the defendant's newly invented trade mark as appears from the wrappers and labels under Annexures V to VIII, copied, imitated, adopted and printed them on his wrappers and labels under Annexures I to IV of the plaint and used them in his business. In other words, the stand of the defendant is that it is the plaintiff who is imitating the labels on the goods of the defendant. The defendant further stated that he has applied for registration of his trade mark appearing on the plaint (Annexures V to VIII) to the Registrar of Trade Marks and he has also objected to the application of the plaintiff for registration of his alleged trade mark appearing in Annexures I and IV of the plaint.

4. The trial Court considering the pleadings of the parties framed eight issues for adjudication including the issue: Is the defendant using the trade name, labels and wrappers which are similar to that of plaintiffs bidi and thereby deceiving the bidi consuming people in the market? The plaintiff examined six witnesses including himself in support of his case while three witnesses including the defendant were examined on his behalf.

The trial Court on consideration of the materials on record came to hold that neither of the parties has got the trade mark approved under the Trade and Merchandise Marks Act and that the plaintiff was carrying on bidi manufacturing business earlier than the defendant. On the issue relating to the allegation of passing off, the trial Court held that the plaintiff's bidis with the labels and marks in question were earlier in circulation and the defendant has imitated the same. Regarding the claim for damages, the trial Court found that the plaintiff has not been able to establish that he sustained any loss due to the action of the defendant complained of. On the aforesaid findings the Court decreed the plaintiff's suit in part and injuncted the defendant in the manner noticed earlier.

5. The learned counsel for the appellant attacked the decision of the Court below from several angles. The thrust of his argument was that in the absence of materials to show that the trade-mark used by him had acquired distinctiveness and reputation in the trade and market, the plaintiff was not entitled to a decree for permanent injunction. He further contended that deceptive similarity between the labels and the marks used by the plaintiff and the defendant has not been established.

The learned counsel for the respondent, on the other hand, contended that distinctiveness is not an essential feature in an action for passing off. According to the learned counsel, the trial Court rightly decreed the suit for permanent injunction on the finding that the plaintiff has been using the particular trade-mark on the packets of Bidis manufactured by him for more than twenty years last and on a bare comparison of the labels used by the parties, deceptive similarity between the two is apparent.

6. Before proceeding to consider the merit of the submissions of the learned counsel for the parties, it will be helpful to note that there is a clear distinction between an action for infringement of trade-mark and an action for passing off. The Supreme Court in the case of Durga Dutt Sarma… v. Navaratna Pharmaceutical Laboratories…, AIR 1965 SC 980, brought out the distinction between the two in the following manner:—

“………….. While an action for passing off is a Common Law remedy being in substance an action for deceit, that is, a passing off by a person of his own goods as those of another, that is not the gist of an action for infringement. The action for infringement is a statutory remedy conferred on the registered proprietor of a registered trade mark for the vindication of ‘the exclusive right to the use of the trade mark in relation to those goods’ (Vide S. 21 of the Act). The use by the defendant of the trade mark of the plaintiff is not essential in an action for passing off, but is the sine qua non in the case of an action for infringement. No doubt, where the evidence in respect of passing off consists merely of the colourable use of a registered trade mark, the essential features of both the actions might coincide in the sense that what would be a colourable imitation of a trade mark in a passing off action would also be such in an action for infringement of the same trade mark. But there the correspondence between the two ceases. In action for infringement, the plaintiff must, no doubt, make out that the use of the defendant's mark is likely to deceive, but where the similarity between the plaintiff's and the defendant's mark is so close either visually, phonetically or otherwise and the Court reaches the conclusion that there is an imitation, no further evidence is required to establish that the plaintiff's rights are violated. Expressed in another way, if the essential features of the trade mark of the plaintiff have been adopted by the defendant, the fact that the get-up, packing and other writing or marks on the goods or on the packets in which he offers his goods for sale show marked differences, or indicate clearly a trade origin different from that of the registered proprietor of the mark would be immaterial, whereas in the case of passing off, the defendant may escape liability if he can show that the added matter is sufficient to distinguish his goods from those of the plaintiff.”

In the present case it has been found by the trial Court on the materials on record, and in my view rightly, that neither of the parties had registered his trade mark under the Trade and Merchandise Marks Act, 1958 entitling him to exclusive user of the trade mark. Therefore, the plaintiff's suit cannot be construed to be one for infringement of the trade mark. It is indeed an action against passing off by the defendant. The finding of the trial Court that the plaintiff was using the wrappers and labels under Exts. 7 to 10 and 14 and 15 much before the defendant started using Exts. 3 to 6 has not been seriously disputed by the learned counsel for the appellant.

P.W 1 (Plaintiff) in his deposition has stated that Rajendra Sahu, the defendant, was his Gumasta from 1975 to December, 1979 and he started manufacturing Bidi in 1980. The witness asserted that he obtained licence from the Central Excise Department for manufacturing Bidi since 1956. He has further stated that since introduction of the Bidi manufactured by the defendant into the market with similar labels and wrappers as his, the demand for his goods has come down.

P.W 2, a dealer in betel and Bidi in Cuttack Town, has stated that he has been selling Ganesh Bidi manufactured by the plaintiff since 1960. He has corroborated the statement of the plaintiff that the defendant was working as a Gumasta under the plaintiff. In cross-examination the witness has stated that he sells Bidi after seeing the photo and labels on the ‘Kathas’ to the customers. The customers demand Ganesh Bidi and purchase after seeing the label of Ganesh Bidi.

P.W 3, the son of the plaintiff, who is looking after the business has supported the plaintiff's case. He has reiterated that the defendant was their employee from 1975-1976 to 1979-1980 (financial years). He has also proved that cash book, Ext. 22, maintained by him in support of his statement. It is in his evidence that the defendant is making Bidi just like the Bidi of the plaintiff and selling the same since April, 1980 and due to this reason there is a fall in their Bidi business. He has categorically denied the suggestion that the defendant was ever a partner with his father in the Bidi business.

The evidence of P.W 4, a tobacco dealer is that the plaintiff has been purchasing tobacco from him since last twenty to twenty six years and has proved that cash-memos Exts. 25 to 25.K (omitting I) relating to the year 1965-1966 granted by him to the plaintiff for such sale. He has further stated that he has been seeing the plaintiff selling Bidi in packets as in Exts. 1, 2, 14 and 15. In cross-examination the witness has asserted that the plaintiff was selling Bidi in packets with the label of Ganesh Bidi and his photo. He has been using the marks as in Exts. 1, 2, 14 and 15 since the inception. The number in labels has been introduced since 1975.

P.W 5, a worker in the plaintiff's Bidi factory for the last ten years, has deposed that he has been using the labels as in Exts. 1, 2, 14 and 15 in Bidi ‘Kathas’ and packets of the plaintiff since the beginning of his service with the plaintiff. According to the witness, the defendant joined the factory five to six years back on monthly salary. Since 1980 he has been making another brand of Bidi. He has further stated that circulation of the plaintiff's Bidi has almost been halved since April, 1980. In cross-examination the witness has stated that the colour used in the labels in both the Bidis is the same. The Kathas of Bidi manufactured by the plaintiff bear the photo of the plaintiff and those by the defendant bear his photo. According to this witness the consumers do not purchase Bidi after verifying the Kathas.

P.W 6 who manufactures Bidi on contract basis and supplies them to different businessmen including the plaintiff, has deposed that labels as in Exts. 1, 2, 14 and 15 were being used by the plaintiff when the witness was serving under him from 1973 to 1978.

On perusal of the deposition of these witnesses, I find no reason to discard their evidence. Nothing has been brought out in their cross-examination to discredit their testimony excepting bringing out relationship in case of some of the witnesses like P.W 5. The trial Court rightly placed reliance on their evidence and rightly discarded the case of the defendant that labels as in Exts. 1, 2, 14 and 15 were not being used by the plaintiff previously and were of recent origin after he entered into the business.

Of the witnesses examined on behalf of the defendant D.W 2 is a shop owner in Cuttack Station bazar selling betel and Bidi for the last ten years. He admits to be selling both ‘Ganesh’ and ‘Bidis’ in his Shop. In his statement-in-chief he asserted that the customers distinctly ask for Ganesh and Ganash Bidis and he supplies accordingly. In cross-examination he was constrained to admit that he cannot identify which is Ganesh and which is Ganash Bidi.

D.W 3 is a witness to the agreement said to have been executed by the plaintiff and his evidence is not very material, excepting his statement in the cross-examination that he has been seeing the Bidi Kathas as in Exts. 2 and 15 for the last ten to twelve years.

D.W 1 is the defendant who has simply reiterated the stand taken in his written statement.

7. As noticed earlier, the plaintiff has sought for injunction against the defendant for passing off. In such a suit the plaintiff must prove user of mark prior in point of time than the impugned user by the defendant. The registration of the mark prior in point of time to the user by the plaintiff is not relevant in an action for passing off. Proof of actual damage or fraud is also unnecessary in a passing off action. If there is a likelihood of the offending trade mark invading the proprietary right, a case for temporary injunction is made out. See AIR 1984 Delhi 441, M/S. Manoj Plastic India…Applicant; v. M/S. Bhola Plastic Industries…Opposite Party.. Considering the question what would be the test for determining deceptive similarity between trade marks the Supreme Court in the case of Parle Products (P.) Ltd. v. J.P & Co., Mysore, AIR 1972 SC 1359, observed thus:

“It is therefore clear that in order to come to the conclusion whether one mark is deceptively similar to another, the broad and essential features of the two are to be considered. They should not be placed side by side to find out if there are any differences in the design and if so, whether they are of such character as to prevent one design from being mistaken for the other. It would be enough if the impugned mark bears such an overall similarity to the registered mark as would be likely to mislead a person usually dealing with one to accept the other if offered to him. In this case we find that the packets are practically of the same size, the colour scheme of the two wrappers is almost the same; and design on both though not identical bears such a close resemblance that one can easily be mistaken for the other…………… Any one in our opinion who has a look at one of the packets today may easily mistake the other if shown on another day as being the same article which he had seen before. If one was not careful enough to note the peculiar features of the wrapper on the plaintiffs' goods, he might easily mistake the defendants' wrapper for the plaintiffs' if shown to him some time after he had seen the plaintiffs'. After all, an ordinary purchaser is not gifted with the powers of observation of a Sherlock Homes. We have therefore no doubt that the defendants' wrapper is deceptively similar to the plaintiffs' which was registered……………..”

The Bombay High Court in the case of Hiralal Parbhudas v. Ganesh Trading Co., AIR 1984 Bom 218, considering several decisions of the Supreme Court summed up the well established principles to be observed in deciding the question of similarity of two marks in the following manner:—

(a) What is the main idea or salient features,

(b) Marks are remembered by general impressions or by some significant detail rather than by a photographic recollection of the whole,

(c) overall similarity is the touchstone,

(d) marks must be looked at from the view and first impression of a person of average intelligence and imperfect recollection,

(e) overall structures phonetic similarity and similarity of idea are important and both visual and phonetic tests must be applied,

(f) the purchaser must not be put in a state of wonderment,

(g) marks must be compared as a whole, microscopic examination being impermissible,

(h) the broad and salient features must be considered for which the marks must not be placed side by side to find out differences in design, and

(i) overall similarity is sufficient. In addition, indisputably must also be taken into consideration the nature of the commodity, the class of purchasers, the mode of purchase and other surrounding circumstances.

The principles noted by the Bombay High Court have been laid down by other Courts also. To notice some of the cases, AIR 1975 Mad 248, A. Shanmugha Mudaliar v. A. Abdul Kareem was also a case of grant of injunction in a suit for passing off concerning sale of Bidis. The Court on consideration of the facts in that case came to the conclusion that there were slight differences which would be imperceptible to even an intelligent purchaser. The Court observed that the class of purchasers of bidis is always understood as unwary purchasers. A fortiori it follows that it would be impossible for them to decipher an imperceptible difference which would not have been even found by a reasonable intelligent buyer. The Court on comparison of the two trade marks came to the conclusion that the plaintiff was entitled to a permanent injunction on the ground, that the defendant had designed a label with the intention of imitating that of the plaintiff which was also in vogue in the market, for the sole purpose of committing wrongful loss to the plaintiff. A similar view was taken by the Andhra Pradesh High Court in the case of Teju Singh;*… (Defendant) v. Shanta Devi… (Plaintiff)., AIR 1973 Andh Pra 51 and the Calcutta High Court in the case of Hormus Ardeshar Kandawala v. Ardeshar Cowasji, AIR 1935 Cal 109.

8. Examining the materials in the present case in the light of the principles laid down in the decisions referred to in the foregoing paragraphs, there can be little doubt that the plaintiff has been able to establish that he was using the labels and wrappers as in Exts. 7, 8, 9 and 10 on the packets of bidis manufactured by him from the beginning of his business and certainly earlier in point of time than use of wrappers and labels in Exts. 3, 4, 5 and 6 by the defendant. It is also apparent from the evidence on record that the purchasers usually make their purchase of the commodity on seeing the label and wrapper on the packets. Comparing the two sets of labels and wrappers of the plaintiff and those of the defendant, it is clear that they maintain close resemblance with each other in get up, colour scheme, position of the photo and the manner of the writings. No doubt there are some differences like the writing ‘Ganesh’ on the plaintiff's labels and ‘Ganash’ on those of the defendant. But such minor distinctions are not likely to be noticed by the purchasers of Bidis who, as observed in the case of A. A. Shanmugha Mudaliar v. A. Abdul Kareem (supra) are usually unwary. Therefore, such minor distinctions notwithstanding, it has to be held that the wrappers and the labels used by the defendant are deceptively similar to those used by the plaintiff and the finding of the trial Court in this regard is proper and justified.

9. In view of the aforesaid finding, the plaintiff is entitled to a decree for injunction restraining the defendant from using the labels and wrappers as in Exts. 3, 4, 5 and 6. The question that remains for consideration is whether the trial Court was right in further directing the defendant, his agents, servants and all other persons on his behalf to handover all the labels and wrappers to the plaintiff for destruction. In my view, this part of the order of the trial Court cannot be supported. Since this case is a passing off action based upon an unregistered trade mark, though the plaintiff is entitled to an injunction by reason of the defendant's trade mark having been introduced with the intention of passing off his goods as the goods of the plaintiff, he is not entitled to an order for delivery of the offending labels and wrappers since the plaintiff has no property in the labels of the defendant merely because the defendant has been passing off his goods as the goods of the plaintiff. The relief in such a case to which the plaintiff is entitled is simply an injunction restraining the defendant, his servants and agents from using his trade mark in respect of his goods. This view gains support from the decision of the Madras High Court in the case of Indian Dental Works v. K. Dhanakoti Naidu, AIR 1962 Mad 127.

10. On the aforesaid analysis, the First Appeal is allowed in part. The judgment and decree of the trial Court decreeing the plaintiff's suit for injunction and permanently restraining the defendant, his heirs, agents and servants and other persons on his behalf from selling or offering for sale or for passing off the Bidis manufactured by him in the name of ‘Ganesh Bidi’ in the mark as in Annexures V to VIII of the plaint or in any other name and under any other marks similar or deceptively similar to those of the plaintiff is confirmed. The further direction given by the trial Court that the defendant, his agents, servants and all other persons on his behalf are to handover all the labels and wrappers to the plaintiff for destruction is set aside. Both parties will bear their respective costs of this appeal.

Appeal partly allowed.