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Sarwan Singh and Sons v. Rico Industries and Ors.
Factual and Procedural Background
This opinion addresses an application for stay of the suit under Section 111 of the Trade and Merchandise Marks Act, 1958. The suit involves claims based on both infringement of a trade mark and passing off. An application for rectification of the trade mark is pending before the Registrar of Trade Marks, prompting the present application for stay. Additionally, there is an interlocutory application for injunction related to the suit.
Legal Issues Presented
- Whether the suit should be stayed in its entirety or only with respect to the claim of trade mark infringement under Section 111 of the Trade and Merchandise Marks Act, 1958, given that the suit also includes a claim for passing off.
- Whether an interlocutory injunction should be granted to the plaintiff during the pendency of the rectification proceedings.
- The appropriate procedural course for handling multiple causes of action in the suit, particularly whether separate trials should be ordered under Order 2 Rule 6 of the Code of Civil Procedure.
Arguments of the Parties
Plaintiff's Arguments
- The plaintiff contended that even if the suit is stayed, the stay should apply only to the infringement claim and not to the passing off claim, allowing the latter to proceed.
- The plaintiff argued for the grant of an injunction on the basis that it has a registered trade mark in operation for 24 years, suggesting the injunction should be granted as a matter of right.
- The plaintiff expressed reluctance to have separate trials for the two causes of action.
Defendant's Arguments
- The defendants relied on the pendency of the rectification application before the Registrar to support the stay of the suit.
- It was claimed in the rectification application that the plaintiff had discontinued use of the trade mark for a long time, which if true, would justify rectification.
- The defendants noted that the plaintiff's registered trade mark pertains only to sewing machine parts and not to sewing machines themselves.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Formica International Ltd. v. Caprihans (India) Pvt. Ltd. and others, A.I.R. 1966 Calcutta 247 | Suit based on two separate causes of action (infringement and passing off) and the applicability of Section 111 of the Trade and Merchandise Marks Act. | The court noted that the precedent held that the suit could not be divided by adding a separate cause of action to avoid the statutory stay under Section 111. The present court agreed that the suit cannot simultaneously be stayed and proceed, thus requiring a different procedural approach. |
Court's Reasoning and Analysis
The court observed that Section 111 of the Trade and Merchandise Marks Act mandates stay of suits for trade mark infringement pending rectification proceedings before the Registrar. However, this statutory stay does not automatically apply to claims based on passing off, which are common law claims outside the statute. The plaintiff's contention that the suit be stayed only with respect to infringement but proceed on passing off was rejected as logically inconsistent; a suit cannot be both stayed and proceed simultaneously.
The court referred to Order 2 Rule 6 of the Code of Civil Procedure, which empowers the court to order separate trials where joinder of causes of action may cause embarrassment or delay. Although the plaintiff was not keen on separate trials, the court found that separate trials would be the proper procedural solution to manage the conflicting claims. Nonetheless, considering the rectification proceedings might conclude shortly and the inconvenience of separate trials, the court decided to stay the entire suit until the rectification proceedings conclude.
Regarding the interlocutory injunction application, the court noted that Section 111(5) allows interlocutory orders despite the stay. However, since the existence of the trade mark was under challenge before the Registrar, the court declined to grant an injunction, observing that the plaintiff’s trade mark was in jeopardy and there was no evidence of mala fide on the defendants’ part. To protect the plaintiff’s rights, the court directed the defendants to file quarterly accounts of sales under the trade mark "RICO" limited to sewing machine parts or sewing machines, starting from October 1, 1978. This order was to preserve the status quo without prejudging liability.
Holding and Implications
The court held that the entire suit shall be stayed pending the final disposal of the rectification proceedings before the Registrar of Trade Marks.
The court’s order implies that no part of the suit will proceed until the rectification application is decided, thereby enforcing statutory protection under Section 111 of the Trade and Merchandise Marks Act. The court also held that interlocutory injunction was not appropriate in the circumstances but protected the plaintiff’s interests by ordering the filing of sales accounts. No new legal precedent was established; the decision primarily applies the existing statutory framework and procedural rules to the facts of the case. The parties may apply for revival of the suit after the rectification proceedings conclude.
JUDGMENT
D.K. Kapur, J.
1. This is an application for stay of the suit under Sec. 111 of the Trade and Merchandise Marks Act, 1958. That Section provides that if there is an application for rectification pending before the Registrar of Trade Marks then the suit will be stayed pending the final disposal of the rectification proceedings. There is no doubt that an application is before the Registrar and, therefore, this suit has to be stayed. However, Section 111 of the Act only applies to suits for infringement of a trade mark but the present suit also contains a plea of claim based on passing off. The claim for passing off is not based on the statutory remedy and, therefore, is not hit by Sec. 111 of the Act. The learned counsel for the plaintiff submits that even if the suit is stayed it should only be stayed qua infringement but should go on qua passing off. I fail to understand how the suit can be stayed and can also proceed. Either a suit can be stayed or has not to be stayed: The learned counsel for the plaintiff has referred to Formica International Ltd. v. Caprihans (India) Pvt. Ltd. and others, A.I.R. 1966 Calcutta 247, in which it was held that the suit should by stayed only qua infringement. I find the problem faced by the court there was that a suit based on two separate causes of action such as infringement and passing off was claimed not to fall within Sec. 111 of the Act and the court held that the suit could not be divided by adding a separate cause of section to be claim for infringement of trade mark. In any event, I am not able to hold that the suit can remain stayed as well as proceed. The proper course of action in the present suit is to pass an order under Order 2 Rule 6 of the Code of Civil Procedure which is in the following terms:
Where it appears to the court that the joinder of cause of action in one suit may embarrass or delay the trial or is otherwise inconvenient, the Court may order separate trials or make such other order as may be expedient in the interests of Justice.
This provision is in the Code only from 1-2-1977 and was obviously introduced just to meet the present situation. It is obvious that there are two causes of action in the present suit and one of them has got to be stayed and if the whole suit is stayed then the other also gets stayed and so obviously the trial is embarrassing or inconvenient because if the suit goes on qua the said issue naturally the statutory stay under sec. 111 will be defeated. Therefore, it is neither easy to stay the whole suit nor easy to proceed with the suit. It is in this situation that two trial should be ordered. The Learned counsel for the plaintiff states that he is not anxious to have two separate trials. I accordingly hold that it is better to stay the whole suit as the rectification proceedings may come to an end very shortly and then this suit can proceed. I accordingly allow the application, stay the suit till the rectification proceedings are over. On the orders being passed either party may apply for revival of the present suit.
2. Now, turning to I.A. 2982/78 which is an application for injunction, reliance is placed on the fact that in relation to Sec. 111(5) even if a stay of the suit is ordered an interlocutory order is still to be passed. This obviously is a statutory provision. The application for rectification no doubt brings about the stay of the suit but at the same time it should not lead to a denial of the plaintiff's rights. This means that the Court has full power to pass interlocutory orders including injunctions and other preventive orders to protect the plaintiff's rights which are open to the Court under its normal jurisdiction. The question is what is the proper order in the circumstances? The learned counsel for the plaintiff submits that he has a registered trade mark which has been in operation for 24 years and hence an injunction should be granted as a matter of right. On the other hand, it is claimed in the rectification application that the plaintiff has discontinued its trade mark for a long and hence the mark should be rectified. To my mind, the matter is sub judice before the Registrar and at the moment the plaintiff's trade mark is in jeopardy. Any other loss on general consideration has not been brought to my notice. I would accordingly hold that when the very existence of the trade mark has been doubted the matter being before the Registrar it would not be proper to give any interim injunction I cannot at the moment say that the defendant's application for rectification is malafide or improper and therefore I have to maintain status quo as it is not easy to decide whether an injunction can be granted against the defendants. However, to protect the rights of the plaintiffs I do direct the filing of the accounts regarding any sales made under the trade mark RICO though the defendants need not give any account of their other trade in the name of RICO industries. To particularise the accounts they are to be given only for sale of sewing machine parts or sewing machines sold under the trade mark RICO. The counsel for the defendants say that the plaintiff has no trade mark registered for sewing machine but only for sewing machine parts. The account is only for purpose of record and does not necessarily mean that the defendants are liable. The account should be filed from the period starting on 1-10-1978 every three months. The three monthly accounts from October to December 1978 should be filed by the end of January 1979. The suit having been stayed will be kept in the record room and the account also will be kept in the record room of the registry.
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