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  • Order 39 Rules 1 and 2 read with Section 151 of the Code of Civil Procedure
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  • Order 39 Rules 1 and 2 read with Section 151 of the Code of Civil Procedure
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Smart Summary

Judgment Summary — J.D. Jain, J.

Factual and Procedural Background

This is an application under Order 39 Rules 1 and 2 read with Section 151 of the Code of Civil Procedure for an ad-interim injunction. The plaintiffs sought to restrain the defendant from manufacturing, selling or otherwise passing off public address systems and sound equipment (including amplifiers, microphones, battery chargers, transformers, driver units, reflex-horns, etc.) under the trade mark "CAPITAL" or under a trading style containing "CAPITAL" (specifically "Capital Sound Equipment"), on the ground that such use is identical with or deceptively similar to the plaintiffs' trade mark/trading name.

The plaintiffs allege long-standing use (asserted since 1948) of the trade mark "CAPITAL" by plaintiff No.1 (Sandeep Mani), proprietor of Capital Radio Company, and claim established goodwill and reputation in that mark and trading style. Plaintiff No.2 (Capital Radio Company (Sales)) is described as a related sales partnership.

The defendant admits that the plaintiffs' firm name contains "CAPITAL" but denies exclusive rights, contending that many businesses in the capital use that word and asserting his own prior use (16–17 years) of the name "Capital Sound Equipment" with a distinctive monogram (a star) and distinctive model names and labels. Neither party is shown to hold a registered trade mark for "CAPITAL"; the suit is therefore a passing off action and not a statutory infringement action.

Legal Issues Presented

  1. Whether the defendant's use of the word "CAPITAL" on public address systems and sound equipment constitutes actionable passing off against the plaintiffs.
  2. Whether the plaintiffs have established prior user and acquired quasi-proprietary/common law rights in the trade mark "CAPITAL" for the specified goods.
  3. Whether the plaintiffs are entitled to an ad-interim injunction restraining the defendant from using the trade mark "CAPITAL" on the specified goods during the pendency of the suit (including consideration of likelihood of confusion, irreparable injury, and balance of convenience).

Arguments of the Parties

Plaintiffs' Arguments

  • The plaintiff firm (Capital Radio Company) has manufactured and sold public address systems and sound equipment under the trade mark "CAPITAL" since 1948 and thereby acquired valuable goodwill and reputation associated with that mark and trading style.
  • The defendant has started manufacturing and marketing similar goods under the trading style "Capital Sound Equipment" and is using the trade mark "CAPITAL" to pass off his goods as those of the plaintiffs, causing confusion among dealers and customers.
  • Prior attempts to persuade the defendant to desist were unsuccessful, and documentary evidence (letters, import licences, sales vouchers, turnover and advertising figures, list of dealers, advertisements and price-lists) supports prima facie prior use and market presence sufficient to justify interim relief.

Defendant's Arguments

  • The defendant denied the plaintiffs' assertions of exclusive rights and argued that "CAPITAL" is descriptive of a geographic/market context (i.e., businesses operating in the capital) and widely used by many firms.
  • The defendant claimed long prior user (about 16–17 years) of the trading style "Capital Sound Equipment" and distinctive goodwill in his own mark due to the use of his full firm name, a distinctive monogram (with a star), distinctive model names/numbers, and distinctive anodised plates and label features (English script only), which, he contends, distinguish his goods from the plaintiffs'.
  • The defendant acknowledged that his business was smaller and mostly local compared to the plaintiffs.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Ruston and Hornby Ltd. v. Zamindara Engineering Co., AIR 1970 SC 1649 Illustration of how get-up and overall presentation may determine passing off; used to explain the distinction between infringement (statutory) and passing off (common law) and that confusion can arise from get-up even without use of identical mark. The court relied on the general principle exemplified by this authority to explain that passing off protects distinctive get-up and that identity of mark is not the sole determinant; it supported the conceptual framework for comparing get-ups and likelihood of confusion.
Consolidated Food Corporation v. Brandon & Co. (P.) Ltd., AIR 1965 Bombay 35 That a trader acquires a right in a distinctive mark by use upon goods irrespective of length of use; a single actual use with intent to continue can confer rights; common law rights exist independently of registration. The court invoked this principle to support the proposition that prior use, even if not long, can confer quasi-proprietary rights and that registration is not a precondition for passing off protection; this underpinned the finding of plaintiffs' rights from their evidences of use.
M/s. L.D. Malhotra Industries v. M/s. Ropi Industries, AIR (1976) I Delhi 278 Same general rule as above: user of a trade mark leads to common law rights independent of registration; priority in adoption and user is superior to priority in registration. The court cited this case as further authority for the legal proposition that prior use establishes rights enforceable by passing off action, supporting the plaintiffs' claim of quasi-proprietary rights.
Oertli A.G. v. E.J. Bowmen (London) Ltd., 1959 RPC 1 (reported in the judgment as AIR 1978 Delhi 253) Sets out the essential test for passing off: plaintiff must show that mark/get-up has become distinctive of plaintiff's goods so that use of the same or deceptively similar mark by another will be understood by trade/public as indicating the plaintiff's goods; establishes the idea of quasi-proprietary right by user. The court quoted and relied on this statement to articulate the core elements of passing off (distinctiveness by user and likelihood of customers being induced to purchase thinking goods are plaintiff's). This supported the court's conclusion that the plaintiffs had acquired a quasi-proprietary right and that the defendant's use risked diversion of trade.

Court's Reasoning and Analysis

The court proceeded from the foundational observation that neither party had a registered trade mark for "CAPITAL", making the dispute a classic passing off action governed by common law principles rather than statutory infringement rules. The court explained the legal distinction: infringement depends on registration, whereas passing off protects prior users whose mark/get-up has acquired distinctiveness in the market.

The court identified the essential requirement for passing off in the interim relief context: the plaintiffs must show prior user of the mark and a prima facie case that the defendant's use creates a probability of confusion. The court then examined the evidence adduced by the plaintiffs to establish prior use and market presence.

The plaintiffs' evidentiary material, considered cumulatively, included:

  • Photostat copies of letters from a Police Radio Officer (Punjab, Simla) dated between December 1955 and October 1962, including references to supply of loud hailers;
  • A letter dated 16.11.1967 from a Member of Parliament acknowledging receipt of transistorised loud hailers and asking for supply;
  • Photostat copies of various letters, sales vouchers, and import licences (dating to 1962, 1964, 1966) for components used in manufacturing loudspeakers and amplifiers;
  • Statements of annual turnover and advertising expenses for 1970–1978/79 showing increasing sales (including a turnover figure for 1978–79 and estimates for the current year);
  • A list of dealers across the country; original letters from dealers and other parties; advertisements and price-lists.

Taking these materials together, the court found they allowed a prima facie inference that the plaintiffs had been manufacturing and marketing the specified goods under the trade mark "CAPITAL" for several years and had thus acquired quasi-proprietary rights by prior use.

The defendant's counter-evidence and arguments were considered. The defendant asserted prior use and relied on features said to distinguish his products: the full firm name "Capital Sound Equipment," a distinctive monogram with a star, different model names/numbers, anodised plates in English script, and other get-up features. The court acknowledged these points but evaluated their effectiveness in preventing confusion.

The court concluded that, despite the defendant's added matter and distinctive elements, the prominent use of the word "CAPITAL" on the defendant's products would likely create confusion among unwary purchasers accustomed to associating that mark with the plaintiffs' goods. The court explained that an average purchaser with imperfect recollection could be misled by the dominant presence of the identical word "CAPITAL", and that the defendant's other distinguishing features were insufficient as a practical matter to avert such confusion.

The court also weighed the balance of convenience and potential for irreparable injury. It found that the likely injury to the plaintiffs (diversion of trade and confusion) and the comparative mischief favored granting the interim injunction rather than withholding it.

Holding and Implications

The application for an ad-interim injunction is allowed.

The court granted an interim injunction restraining the defendant from using the trade mark "CAPITAL" on public address systems and sound equipment of the types specified (amplifiers, microphones, driver units, reflex-horns, etc.) manufactured and marketed by him during the pendency of the suit.

Implications:

  • Direct effect: The defendant is temporarily prohibited from using the disputed mark "CAPITAL" on the enumerated goods while the suit continues, thereby protecting the plaintiffs' asserted prior-user rights in the interim.
  • Scope of precedent: The court applied established common law principles of passing off (as cited) to the facts; the decision rests on the court's assessment of prior use, likelihood of confusion, irreparable injury and balance of convenience. The judgment does not purport to create a new legal principle beyond the authorities cited.

Note: This summary is based exclusively on the content of the provided opinion and does not add information beyond that judgment text.

Show full summary ...

    Sandeep Mani Proprietor of Capital Radio Company and Ors. v. Capital Sound Equipment

    JUDGMENT

    J.D. Jain, J.

    1. This is an application under Order 39 Rules 1 and 2 read with Section 151 of the Code of Civil Procedure for grant of ad-interim injunction to the plaintiffs restraining the defendant from manufacturing selling or otherwise passing off their goods, viz. public address system and sound equipment including amplifiers, microphones, battery charges, transformers driver units, reflex-horns etc., under the trade mark 'CAPITAL' and adopting or using any such trade mark or the trading style 'CAPITAL' sound Equipment etc. which is identical with or deceptively similar to the trade mark/trading name of the plaintiffs. The averments made by the plaintiffs succinctly are that Sandeep Mani, plaintiff No. 1 is the sole proprietor of the firm Capital Radio Company, hereinafter referred to as the plaintiff firm. Formerly this firm belonged to the HUF of which Chitamani, deceased father of the plaintiff was the Karta. However, the HUF business was converted into a partnership business in July, 1971 with Chitamani and the plaintiff Sandeep Mani as partners thereof. Eventually, however, on the death of Chintamani on 14th April, 1978, the plaintiff firm became the sole proprietary concern of the plaintiff. It is alleged that the said firm had been manufacturing and selling public address system, sound equipment and battery chargers etc., since the year 1948 under the trade mark 'CAPITAL' and over the years they developed valuable good will and high reputation not only with regard to their trading style viz. Capital Radio Company but also in respect of their trade mark 'CAPITAL' which came to be associated with their products. As at present they manufacture various types of amplifiers, microphones, loud hailers, reflex-horns, transformers and the like under the trade mark 'CAPITAL' and they have a net work of branches spread all over the country, Plaintiff No. 2 Capital Radio Company (Sales) is a partnership concern comprising Smt. Nirmal Devi and Smt. Suman Kumari both of whom are close relation of the plaintiff and they have been carrying on sales business of the plaintiff firm for the past five years. It is further averted that of late the defendant with a view to flourish at the cost of the plaintiff firm started business of manufacturing and marketing public address system and sound equipment including amplifiers, driver-units, microphones etc. under the trading style 'Capital Sound Equipment and with a view to trade on the goodwill and reputation built by the plaintiff in respect of their goods, he also started using the trade mark 'CAPITAL' on his products so as to pass off his goods as those of the plaintiff. The letter even received some complaints from his dealers that the above mentioned categories of goods were being manufactured and sold by the defendant under the trade mark 'CAPITAL' which caused confusion their minds that those goods were products of the plaintiff firm. On enquiry he found that the defendant was using identical trade mark and anodised labels bearing the word 'CAPITAL' in the same characteristic style as had been used by the plaintiff, for the last many years. So he approached the defendant to desist from adopting the trade mark 'Capital' in relation to the goods manufactured by him which were identical to those manufactured & sold by the plaintiffs and also to discontinue the trade name having the word 'CAPITAL' as its key word but in vain. The suit as well as the instant application has met with stiff resistance at the hands of the defendant who has denied the foregoing averments made by the plaintiff firm while admitting that the firm name of the plaintiff happens to contain the word 'CAPITAL'. He has asserted that the plaintiff has not acquired any exclusive right to use the same in as much as the word 'CAPTIAL' is an expression conveying that a particular business is being carried on in this capital city of India, and quite a large number of business firms, as would be apparent from the Telephone Directory of Delhi, have been using the word 'CAPITAL' in relation to their trading styles. He has further asserted that he has been manufacturing sound equipment and trading in the firm name Capital Sound Equipment for the last 16/17 years and as such his user of the mark Capital in relation to his goods being much prior to that of the plaintiff he has acquired distinctive goodwill in the trade and manufacture of amplifiers, microphones, driver-units, reflex-horns etc. Further he has explained that he markets the items manufactured by him by displaying the full name of his firm, Capital Sound Equipment, which is inscribed on the articles with a distinctive monogram having a star in the middle and the name 'Capital Sound Equipment' around it. Not only that the brand names of the models introduced in the market by him bear distinctive numbers for amplifiers driver units etc. It is contended that the firm name of the plaintiff itself suggests the type of work being carried on by it i.e. radio and radio parts etc. whereas he deals exclusively in public address system and sound equipment. Thus, there is no quest on of any confusion being caused in the public mind with respect to the goods manufactured and marketed by him vis-a-vis the goods and products of the plaintiff firm. However, he has frankly conceded that the only draw back from which he suffers is that he is not financially so well off as the plaintiff and as such he is doing his business on a small scale and his customers are mostly local.

    2. It is beyond the pail of controversy that the trade mark CAPITAL is not registered in favour of either the plaintiff or the defendant; so the instant is a passing off action and not infringement action. The distinction between the two is important. The action for infringement is a statutory right being primarily dependent upon the validity of the registration of a particular trade mark. On the other hand, passing off action is a common law remedy, its gist being that A is not entitled to represent his goods as the goods of B but it is not necessary for B to prove that A did this knowingly or with an intent to deceive. It is enough that the get up of these goods has become distinctive of them and that there is a probability of confusion between them and the goods of A. No case of actual deception or any actual damage need, however, be proved. It very often happens that although the defendant is not using the trade mark of the plaintiff, the get up of the defendant's goods may be so much like the plaintiff's that a clear case of passing off would be proved. It is on the contrary conceivable that although the defendant may be using the plaintiff's mark the get up of the defendant's good may be so different from the get up of the plaintiff's good and the prices also may be so different that there would be no probability of deception of the public. See Ruston and Hornby Ltd. V. Zamindara Engineering Co. AIR 1970 SC 1649. It is settled law that a trader acquires a right of property in a distinctive mark merely by using it upon or in connection with his goods irrespective of the length of such user and the extent of his trade. The trade who adopts such a mark is entitled to protection directly, the article having assumed a vendible character is launched upon the market. The trade mark exists independently of the registration which merely affords further protection under the statute, but interior use by a person of a trade mark is protected. Common law rights are left wholly unaffected. Priority in adoption and user of a trade mark is superior to priority in registration. For the purpose of claiming such proprietorship of a mark it is not necessary that the mark should have been used for a considerable length of time. As a matter of fact a single actual use with intent to continue such use indefinitely confers the right to such mark as a trade mark. It is sufficient that the article with a mark has become vendible in the market with intent on the part of the proprietor to continue his production and sales. It is not necessary that the goods should have acquired reputation for quality under that mark See Consolidated Food Corporation Vs. Brandon & Co. (P.) Ltd., AIR 1965 Bombay 35 and M/s. L.D. Malhotra Industries Vs. M/s. Ropi Industries, AIR (1976) I Delhi 278.

    3. Thus, in an action for passing off, the plaintiffs in order to succeed in getting an interim injunction has to establish user of the mark prior in point of time the impugned user by the defendant. In the instant case the plaintiff has placed on the record ample material which would ex facie warrant the inference that he has been manufacturing and marketing goods of the categories mentioned above for a fairly long time. First of all there are photostat copies of some letters received by him from Police Radio Officer, Punjab, Simla during the period December 1955 to October, 1962. a couple of these letters relate to supply of loud hailers. Then there is a letter dated 16.11.1967 written by a Member of Parliament to the plaintiff firm acknowledging the receipt of Transistorised loud hailer and asking for supply of more sets of the same. Next come photostate copies of a number of letters received from various firms, sale vouchers of the plaintiffs firm and import licences issued to the plaintiff firm with respect to some components for manufacturing loud speakers, amplifiers etc.

    4. These import licences date back to the years 1962, 1964 and 1966 etc. Further the plaintiff has placed on record statement of his annual turn over and annual advertisement expenses during the period 1970, 1971 to 1978-79, which reflect ever-increasing sales of his products. He seems to have achieved the target of Rs. 28,63,479.73 during the year 1978-79 and his estimated sales in the current year are likely to be around Rs. 50 lacs. He has also furnished a list of his dealers all over the country. Lastly some original letters received by the plaintiff firm from different dealers & parties have also been produced alongwith their advertisements, price-lists etc. Cumulatively, these documents leave no room for doubt that the petitioner has been manufacturing and marketing his products of various types under the trade mark 'CAPITAL' for the last several years. On the other hand, the defendants has miserably failed to establish that he has been in the market of similar goods for a considerable time much less that he started using the trade mark 'CAPITAL' on his products prior to the adoption of the said trade mark by the plaintiff Prima facie, therefore, the plaintiff is able to prove his stand that he is the prior user of the trade mark 'CAPITAL; in relation to the goods detailed above. Thus, he has acquired quasi-proprietary rights in the same and as such he is entitled to restrain the defendants from using the said trade mark.

    5. In the Oertli A.G. Vs. E.J. Bowmen (London) Ltd., 1959 RPC 1 (AIR 1978 Delhi 253) is was observed by the House of the Lords that:-

    It is, of course, essential to the success of any claim in respect of 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 this country distinctive of the plaintiffs goods to 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 mark or get up will be understood by the trade and the public in this country as meaning that the goods are the plaintiff's goods. The gist of the action is that the plaintiff by using and making known the mark or get up in relation to his goods and thus causing it to be associated or identified with those goods, has acquired a quasi proprietary right to the exclusive use of the mark or get up in relation to goods of that kind, which right is invaded by any person who, by using the same or some deceptively similar mark or get up in relation to goods not of the plaintiff's manufacture, induces customers to buy from him goods not of the plaintiff's manufacture as goods of the plaintiff's manufacture, thereby diverting to himself orders intended for and rightfully belonging to the plaintiffs'.

    (emphasis supplied.)

    6. Faced with this situation, the learned Counsel for the defendant has canvassed rather fervently that even though the trade mark used by the defendant is identical with that of the plaintiff, there is absolutely no visual similarity between the get up, other writings or mark on the gods of the defendants which would indicate or cause confusion with the goods of the plaintiff. Indeed, according to him the get up and other features of the anodised labels, paper transfers, etc, affixed by the defendant on his goods clearly indicate a particular origin different from that of the plaintiff. Thus, it is contended that the added matter in the instant case is sufficient to distinguish his goods from those of the plaintiff and no case of passing off is made out. In order to substantiate the contention raised by him he has invited my attention to the marks appearing on the anodised labels and paper transfer etc. used by both the parties on their respective goods and has pointed out that on all the goods manufactured and marketed by him he exhibits the monogram with a star in the centre and the name of his firm Capital sound equipment printed around it in order to indicate the origin of their manufacturer. Further the amplifiers produced and sold by him have models different from those of the plaintiff, the same being - Dewan-40, Pawan-30, and Lion-40, as against PMB-25, Swaran-25, Sewak - 30 and CTA - 30 of the plaintiff. Even the anodised plates used by him are distinctively peculiar and the writings are only in English script whereas the plates used by the plaintiffs carry the trade mark in Hindi also.

    7. On a careful consideration of the matter, I find that even though the plaintiff cannot be said to have exclusive right to use the expression 'CAPITAL' in relation to his trading style because various trades operating in the Capital town of this country are using this key word as a prefix to their trade names but the same does not sold good in respect of the use of this word as a trade mark. One of the methods which a person may adopt for representing his goods or business as goods or business of the other person is by copying his trade mark. In other words he may adopt the word or name by which the rival trader's products or business is known in the market. So even though the word 'CAPITAL' may not be said to be key word of trading style of the plaintiff and as such trade name of the defendant becomes quite distinguishable by the added matter viz. 'Sound Equipment' as against 'Radio'n Company' of the plaintiff's trade name, there can be no shadow of doubt that the use of the trade mark 'CAPITAL' by the defendant is bound to cause confusion in the minds of unwary and gullible purchasers who may well take the product of the defendant bearing the said mark as that of the plaintiff. The essence of a trade mark is the association which it bears in the mind of a buyer and the goods to which it is applied. The confusion may arise because the trade mark is associated with the name of a manufacturer to which some other manufacturers name is similar and causes the association with a design or descriptive words as also because some other manufacturer uses a similar design or similar descriptive words to indicate the origin of his goods. It is true that the defendant displays the name of his firm on the anodises and other kind of labels affixed on his goods but that is hardly enough to serve as a warning to the prospective purchaser who may be conversant into only with the trade mark 'CAPITAL' in relation to the goods manufactured by the plaintiff and can hardly be presumed to know the exact get up or other special features of the labels of the plaintiff. Where an action for passing off is based on the alleged copying of the plaintiff's trade mark, the fact that such mark is not registered under the Act is no bar to success if the ingredients for passing off are established. In the instant case, the manner of its use by the defendant is not such as to adequately distinguish his goods from those of the plaintiff. Indeed the trade mark 'CAPITAL' used by him overshadows the rest of the material including the monogram comprising the name of his own firm, the difference in the physical appearance of the two products by reason of the variation in their colour scheme and other features and the general get up which do not rule out the likelihood of confusion which may be caused in the mind of a purchaser of an average intelligence and imperfect memory or recollection. Hence, I am of the view that there is likelihood of the offending trade mark causing irreparable injury to the plaintiff and that confusion may be caused in the mind of the prospective purchasers if the defendant is allowed to use the mark which prima facie belongs to the plaintiff. On a parity of reasoning the comparative mischief of inconvenience will be greater if the temporary injunction is withheld rather than if it is granted. In other words, the balance of convenience too is in favour of the plaintiff rather than the defendant. Consequently it appears to be a fit case where ad-interim injunction as prayed should be allowed. As a result I allow this application and restrain the defendant from using the trade mark 'CAPITAL' on the public address-system and sound equipment of the types mentioned above, manufactured and marketed by him during the pendency of the suit.

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    Comments

    Sandeep Mani Proprietor of Capital Radio Company and Ors. v. Capital Sound Equipment
    (Mar 3, 1980)