Sir Shadi Lal Enterprises Ltd. v. Kesar Enterprises Ltd.

D.K Jain, J.— In a suit for perpetual injunction restraining infringement of copyright, passing-off of trade mark and rendition of account, the plaintiff Company, engaged in the manufacture and sale of alcoholic drinks, has filed this application under order xxxix, rule 1&2 read with section 151 of the code of civil procedure, seeking temporary injunction restraining the defendant, its agents, distributors, dealers and all others acting for and on its behalf from manufacturing, selling, offering for sale, advertising directly or indirectly and dealing in alcoholic drinks and other allied goods under the trade mark “CHETAK” or any other trade mark identical to or deceptively similar to the plaintiff's said trade mark.

2. The plaintiff's case in brief is that it is engaged in the business of manufacture and marketing of alcoholic drinks under the trade name “Chetak” since the year 1983; had adopted the trade mark “Chetak” and developed a label having artistic quality for its product and has been regularly, continuously and exclusively using the same since then; it is the adoptor, originator and proprietor of the said trade mark; had got approved the label bearing trade mark “Chetak XXX RUM” from Excise Authorities; it has established extensive business in major parts of the country; its sales for the said goods under the trade mark “Chetak” run into crores of rupees and the said trade mark has acquired unique reputation and goodwill in public and the goods under the said trademark are exclusively associated with the plaintiff. The sale figures given in the application for the years 1982 to 1996, run into crores of rupees. It is claimed that on account of long, continuous, extensive and exclusive user thereof the consuming public and defence personnel exclusively associate the said trade mark to the aforementioned goods of the plaintiff and none else. It is stated that in addition to the common law rights, in order to acquire statutory rights for the said trade mark, the plaintiff has filed an application for registration of the trade mark “Chetak” in respect of its product on 8 June, 1984.

3. The plaintiff alleges that from April, 1996 issue of a Magazine “High Spirits”, it learnt that: the defendant had been claiming itself to be the manufacturer and supplier of alcoholic drinks under several trade marks including the trade mark “Chetak”, which is in flagrant violation of the legal vested rights of the plaintiff in the established trade mark “Chetak” and its label; the use of the said trade mark by the defendant in relation to same/identical goods amounts to passing-off the plaintiff's trade mark by virtue of prior adoption; on gaining knowledge about the said user it sent a legal notice to the defendant urging it to stop such infringement, to which the defendant sent a vague reply without disclosing since when it was using the trade mark “Chetak”. Claiming that the plaintiff’ senquiries have revealed that the defendant has started using the impugned trade mark only recently, has been granted licence by the Excise Department for the impugned mark only in the financial year 1995-1996, it is asserted that the defendant has adopted a similar/deceptively similar trade mark knowingly and deliberately with a dishonest intention to trade upon the hard earned goodwill and reputation of the plaintiff to earn undue profits to which it is not entitled, as the user of the trade mark by the defendant is bound to cause confusion and/or deception amongst the purchasing public and trade leading to passing-off the goods and business of defendant as the goods and business of the plaintiff, particularly when the goods of the plaintiff as well as of the defendant are of the same nature and description, made from the same raw material, and not only the trade channels of both the plaintiff and defendant are same, even the purchasers are the same. It is thus, claimed that present is the case of triple identity.

4. The application is resisted by the defendant, mainly on the pleas that: the defendant is a genuine bona fide and original user of the trade mark “Chetak” with the device of a mounted human figure and a star for its different kinds of Indian Made Foreign Liquor like whisky, gin, rum etc; they had, before adopting the mark and device got a search made in the office of the trade mark registry at Bombay in October, 1994 which revealed that the mark “Chetak” was not used and was available for adoption; their investigation in the mark confirmed the non-existence of the mark “Chetak” with or without any device in the mark and thereafter they applied for the registration of the trade mark “Chetak” with a device of a mounted human figure and a star for different kinds of IMFL; and after satisfying itself that the said mark was open for adoption, the defendant undertook the preparation of label, label design and launched its products in April, 1995.

5. I have heard Mr. Mohan Vidhani, Advocate for the plaintiff and Mr. D.K Aggarwal, Senior Counsel for the defendant. Both the learned Counsel have reiterated the points set out in the plaint and in the written statement, briefly noticed above. Though the prior user of the trade mark “Chetak” by the plaintiff is not disputed by learned Counsel for the defendant, the main thrust of his arguments in opposition to the application is that: (a) the plaintiff is not the originator of the trade mark “Chetak” which belongs to a Kashmir Party and the plaintiff is itself a pirator; (b) the label of the defendant, if seen as a whole, is different from the trade mark of the plaintiff particularly with the addition of a dimly shaped human figure mounted on a horse and sprinkling star besides the letter “Chetak” and (c) the plaintiff has neither any general reputation in the market nor was there any likelihood of anyone being deceived or confused because the sale of plaintiff's rum was confined only to defence canteen stores and the consumers at large were not associated with the goods of the plaintiff. In support reliance is placed on two decisions of this Court in Johnson and Johnson v. Christine Hoden India (P) Ltd., AIR 1988 Delhi 249 and Shri Prem Singh…Plaintiff v. M/S. Ceeam Auto Industries…Defendant, AIR 1990 Delhi 233.

6. I am unable to accept any of the contentions urged in defence by learned Counsel for the defendant.

7. The essence of the cause of action for passing-off in its classic form consists of misrepresentation of the defendant in respect of the goods marketed by the defendant by colourable imitation and by using some material resembling with those of others in such manner as to be calculated to cause the goods to be taken by ordinary purchasers for the goods of the plaintiff. The purpose of passing-off action is not only to protect commercial goodwill but is also to ensure that the purchasers are not exploited and dishonest trading is prevented and for that the plaintiff must establish that his business or goods have acquired the reputation. In Ellora Industries v. Banarasi Dass Goela, AIR 1980 Delhi 254, A.B Rohatgi, J., relying on Reddaway v. Bentham Hemp Spg. Co., (1892) 2 QB 639, held that in a passing-off action all that needs to be proved is that the defendant's goods are so marked, made up or described by them as to be calculated to mislead ordinary purchasers and to lead them to mistake the defendant's goods for those of the plaintiff's, and it is the tendency to mislead or to confuse that forms the gist of passing action; and the plaintiff need not establish fraud, nor that any one was actually deceived or that he actually suffered damage.

8. The main stand of the defendant is that the plaintiff has a very limited market in that its product is sold only in Defence canteens and not in open market, the plaintiff has failed to establish its goodwill in the impugned mark “Chetak” and in any event the aforenoted additional material on the label of the defendant is sufficient enough to distinguish the goods of the defendant from those of the plaintiff and the unwary purchasers are not likely to be deceived or confused by the defendant's label as being associated with or emanating from the plaintiff particularly when the defendant is not supplying Rum with trade mark “Chetak” to the defence canteens.

9. It is no doubt true that presently the plaintiff is selling its product only in Defence canteen stores but the plaintiff has placed on record various documents to show that he has been continuous prior user of the trademark “Chetak” at least from January, 1984; the year-wise break up of its sales, placed on record, shows that its sales for the years 1991-1992, 1992-1993, 1993-1994 and 1994-1995 have been over one lac cases of “Chetak” XXX Rum, which tends to indicate that the plaintiff's product has been well received by the consumers and it has acquired a substantial goodwill for its products even when its sales are limited to the Defence canteens. On the other hand the defendant has not placed on record any material to show that it is prior in user of the said trade mark. As such the contention that the plaintiff has failed to establish its goodwill/reputation is rejected.

10. The prime question to be considered is whether the use of mark “Chetak” by the defendant on its products is such as to create a likelihood of the purchasing public being misled into believing that the defendant's goods are of the plaintiff. The defendant's stand is that no confusion or deception is likely to be caused in the instant case because, (i) The plaintiff's Rum is only sold in Defence canteen stores and, that class of customers are capable of distinguishing the plaintiff's product with that of the defendant’ sand (ii) Additional material in the form of dimly shaped human figure mounted on a horse and sprinkling star besides the letter “Chetak” is formed in a different style with word KE on the right side of the label which is the logo of the defendant Company and, therefore, no case of passing-off is made out. The stand of the defendant is fallacious.

11. The trite proposition of law is that the test to be applied in such matters is as to whether a man of average intelligence and of imperfect recollection would be confused. An unwary purchaser is not expected to keep the goods of two manufacturers or the labels side by side and compare the similarities and dis-similarities thereon meticulously to decide whether he is purchasing the same goods which he had intended to buy. Deception can be caused by user of one or more essential features of a mark and degree of resemblance necessary to deceive or cause confusion could not be defined and the questions to be asked by the Court to itself is as to whether the customers of average intelligence and imperfect recollection are likely to be confused on the first impression. (See Corn Products Refining Co. v. Shangrila Food Products Ltd , AIR 1960 SC 142 and Amritdhara Pharmacy v. Satya Deo Gupta , AIR 1963 SC 449).

12. It is true that presently plaintiff's sales are to Defence canteen stores and not to the general market/public but it cannot be said that its customers are or will remain confined to Defence personnel only. A Defence personnel is not barred from purchasing the commodity from the local market. He may also be an unwary purchaser of average intelligence. Besides, there is no restriction on the plain tiff not to market its product in the general market. Merely because at the moment, the plaintiff's sales are to the Defence canteens, it cannot be held that defendant's user of the same trade mark would not affect the plain tiff presently or in future. As noted above, the plaintiff has already established his reputation in the market and the trade mark ‘Chetak’ is associated with the plaintiff.

13. The pointed out additional material in the form of dimly shaped human figure mounted on a horse and sprinkling star besides the letter ‘Chetak’, in my view makes no difference for an unwary purchaser of average intelligence, who is not expected to keep the goods manufactured by the plaintiff and the defendant side by side to decide which product he intends to buy.

14. The evidence brought on record by the plaintiff, prima facie, tends to indicate that the plaintiff, by use of the mark “Chetak” for its Rum prior to the defendant, had acquired reputation and goodwill in the use of the said mark and manufacture and sale of the same very product i.e, Rum under the mark “Chetak”, which appears as deceptive, by the defendant would result in invasion of the plaintiff's mark, entitling him to the relief of injunction against the defendant

15. The defendant's objection in resistance to the plaintiff's case, that the plaintiff is by itself a pirator in that trade mark “Chetak” belongs to a Kashmir Party and consequently the plaintiff is not entitled to the relief sought, in my view, is stated to be rejected. Except for a bald statement that the said trade mark belongs to a Kashmir party, the defendant has not brought on record any material to show that the said party has ever used this trade mark. In such a situation it would be a matter between the plaintiff and the stated Kashmir party. Only that party can object to its user by the plaintiff on the ground that it was a prior user of the mark. It is not for the defendant to rake up the issue on his behalf and claim protection on that score.

16. The authorities cited in support by learned Counsel for the defendant do not advance the defendant's case. The decision in Johnson & Johnson (supra) merely holds that in such like cases marks must be compared as a whole and it is not right to take a portion of the word and say that because that portion of the word differs from the corresponding portion of the word in the other case, there is no sufficient similarity to cause confusion.

17. In Prem Singh's case (supra) it was held that where it was shown that the plaintiff himself was guilty of piracy of another party's trade mark or design, which party had been in the market earlier, the Court may decline to step in aid of this party. None of the two situations prevail in the instant case.

18. For all these reasons, in my view, the plaintiff has made out a prima facie case for grant of ad-interim injunction in its favour. The balance of convenience is also in favour of the plaintiff. On its own showing the defendant has launched its product only in April, 1995, whereas the plaintiff is in business at least since January 1984 and as such no irreparable injury is likely to be caused to it if temporary injunction, as prayed, is granted, particularly when the defendant is marketing its products under other trade marks also. The likely confusion that may be caused if the defendant is allowed to use the mark “Chetak” will cause irreparable injury to the plaintiff.

19. Consequently, I restrain the defendant from manufacturing, selling or offering for sale, directly or indirectly, alcoholic drinks with the mark “Chetak” or any other similar mark which may be deceptively similar to the plaintiff's said mark, till the final disposal of the suit.

20. Any observation made above is a prima facie view of the matter for the limited purpose of disposal of the present application and shall not be construed as expression of opinion on the merits of the case.

Application allowed.