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Case Number

I.A.S. Nos. 6468 of 1984 77 of 1985 in Suit No. 1758 of 1984

Advocates

A.K. Goel
Man Mohan Singh
Advocates.

Judges

Mr. Justice D.P. Wadhwa

Acts

Order 39 Rules 1 and 2 and Section 151 of the Code of Civil Procedure (for short 'the Code').
Order 39 Rule 4 of the Code.

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Smart Summary

Judicial Opinion Summary — D.P. Wadhwa, J.

Factual and Procedural Background

The plaintiff filed suit seeking perpetual injunction restraining the defendant from infringing the plaintiff's trade mark and from passing off the defendant's goods as those of the plaintiff. The suit sought other attendant reliefs such as rendition of account. The plaintiff manufactures pharmaceutical formulations marketed under various trade marks, including ELECTRAL (registered word mark No. 251636B dated 12.9.1968 in Class 5 for pediatric medicinal preparations and an ELECTRAL label registered No. 356663 dated 19.12.1979 in Class 5 for medicinal and pharmaceutical preparations). The plaintiff alleged that it introduced the product under the mark ELECTRAL in November 1972, and that it markets that product in a distinct sachet with a white, green and black colour scheme (a specimen sachet was filed with the plaint).

The plaintiff alleged that in September 1984 it discovered the defendant marketing a similar medicinal preparation in Delhi under the mark VIJAY ELECTROLYTE, packaged in a sachet similar in colour scheme and get-up to the plaintiff's sachet; the plaint alleges discovery on purchase in Delhi on 25th September 1984. Along with the suit the plaintiff filed I.A. 6468/84 under Order 39 Rules 1 & 2 and Section 151 of the Code praying for interim injunction. On 16th November 1984 the court issued notice and restrained the defendant from selling its product in the sachet like Annexure 'X' until further orders.

The defendant filed reply and a counter-application I.A. 77/85 under Order 39 Rule 4 seeking discharge/variation of the interim order. The defendant produced documentary evidence (a notice dated 14th July 1982 and reference to an earlier notice of 12th February 1981) showing that the plaintiff had objected to the defendant's use of the name VIJAY ELECTROLYTE and the sachet design as early as February 1981. The defendant also produced sales bills and sales figures indicating it had been selling VIJAY ELECTROLYTE since 1980. The court heard submissions and took a prima facie view of the matter before deciding the interlocutory applications.

Legal Issues Presented

Whether a temporary (interim) injunction should be continued / granted to restrain the defendant from using the mark VIJAY ELECTROLYTE and from marketing in sachets allegedly deceptively similar to the plaintiff's sachet.
Whether the plaintiff's conduct — including alleged prior knowledge of the defendant's use (since 1981) and alleged false averments — constitutes laches, suppression of material facts or "unclean hands" sufficient to preclude interim relief.
Where the balance of convenience lies between the parties pending trial, given the length of the defendant's use and the nature of the product.
Whether the plaintiff's averments in the plaint and application justify the court proceeding against the plaintiff for making false declarations in the affidavit supporting the application.

Arguments of the Parties

Plaintiff's Arguments

The plaintiff asserted it only became aware of the defendant's offending activities in September 1984 (on purchase in Delhi on 25th September 1984), and therefore filed for interim relief then.
The plaintiff contended that the defendant's use of a sachet similar to the plaintiff's get-up and the mark VIJAY ELECTROLYTE would cause confusion among the public and therefore sought interim injunction to prevent continued use.
It was argued that there was a "fresh cause of action" because the defendant had admitted continued use of the offending sachet and mark, and that delay should not be material in the grant of interim relief.
The plaintiff argued that continued interim relief served the public interest by preventing confusion in the marketplace.

Defendant's Arguments

The defendant produced a notice dated 14th July 1982 and relied on an earlier notice of 12th February 1981, showing the plaintiff had been aware of the defendant's use of VIJAY ELECTROLYTE and similar sachet get-up since at least February 1981.
The defendant argued the plaintiff's averments were false and that the plaintiff had concealed true facts, thereby making the plaintiff guilty of laches and of coming to the court with unclean hands.
The defendant placed on record sales bills and figures showing continuous sales of VIJAY ELECTROLYTE since 1980, arguing the balance of convenience favoured the defendant and that it would suffer irreparable loss if the interim injunction continued.
The defendant argued (and produced a licence) to show it was not marketing a sub-standard product; therefore, there was no public safety justification for injunction based on substandard product concerns.
The defendant also highlighted that other parties marketed somewhat similar sachets and that the plaintiff itself used different coloured sachets for related products, undermining exclusivity of the plaintiff's sachet get-up.

Table of Precedents Cited

Both parties referred to a few judgments during submissions, but the court expressly stated it did not find it necessary to refer to any of those decisions in reaching its view.

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court stated it was taking only a prima facie view for the purpose of deciding interlocutory relief, with the understanding that both parties would have full opportunity to lead evidence at trial.

Key steps in the court's analysis, as reflected in the opinion:

Examination of documentary material: The court considered the plaintiff's own correspondence (a notice dated 14th July 1982 and reference to a notice of 12th February 1981) demonstrating that the plaintiff had been aware of the defendant's use of the mark and similar sachet get-up since at least February 1981.
Assessment of plaintiff's averments: The court observed a clear inconsistency between the plaint's assertion that discovery occurred in September 1984 and the earlier notices sent by the plaintiff's advocate. The plaintiff's counsel had no satisfactory explanation for this discrepancy; the suggested explanation that the plaintiff's director (Mr. C. D. Kamath/G. D. Kamath as per record) was unaware of the advocate's notice was not accepted by the court, especially given identification of the director by the same advocate in affidavit material.
Consideration of laches and acquiescence: The court treated the plaintiff's long silence (from as early as 1981 until 1984) as conduct that led the defendant to believe it could continue marketing in the complained-of sachet, weakening the plaintiff's claim for interim relief. The court found that this delay and apparent acquiescence amounted to laches and supported denial of immediate injunctive relief.
Evaluation of the nature of the product and likelihood of confusion: The court noted that the medicinal preparation in question is not an over-the-counter product that any lay person would buy without prescription; purchases are likely to involve a doctor or chemist, reducing the likelihood of public deception. The court also noted price differences and the defendant's licence and absence of any suggestion of sub-standard product.
Balance of convenience: Given the defendant's continuous sales of the product in the sachet since 1980 and the plaintiff's prior inaction, the court concluded the balance of convenience favoured the defendant.
Seriousness of interim injunctions and consequences of false averments: The court emphasized that granting an ad interim injunction is a serious step akin to condemning a party unheard, and that the plaintiff's false or misleading averments (as found on the record) would justify proceeding against the plaintiff for making false declarations in support of its application.
Disposition without reliance on cited authorities: Although both parties had referred to judgments, the court found it unnecessary to rely upon or discuss those precedents for the decision reached on the particular facts before it.

Holding and Implications

Holding: The plaintiff's application I.A. 6468/84 is dismissed and the interim order dated 16th November, 1984 is vacated; the defendant's application I.A. 77/85 is allowed.

Immediate consequences and orders:

The defendant is entitled to costs; counsel's fee ordered: Rs. 500/-.
The defendant may continue marketing its product in the sachet (subject to the ultimate outcome at trial), because the interim injunction protecting the plaintiff's exclusive use of that sachet has been vacated.
The court indicated it will proceed against the plaintiff for making false declarations/supporting affidavits, given the inconsistencies between the plaint's allegations of late discovery and the plaintiff's earlier notices to the defendant.

Broader implications:

The opinion does not announce any new legal principle or precedent; it rests its decision on the particular facts — notably the plaintiff's prior knowledge, delay (laches), alleged suppression of material facts, and the balance of convenience — and records the court's choice not to rely on the judgments cited by the parties.

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Fair Deal Corporation Private Limited v. Vijay Pharmaceuticals

D.P. Wadhwa, J:

1. A. 6468/84 is filed by the plaintiff and is under Order 39 Rules 1 and 2 and Section 151 of the Code of Civil Procedure (for short 'the Code'). The other I.A. 77/85 is filed by the defendant and is under Order 39 Rule 4 of the Code. The suit is one for perpetual injunction restraining the defendant from infringing the trade mark of the plaintiff and passing off its goods as that of the plaintiff. There are also other usual prayers in such like suits like rendition of account etc. The plaintiff claims to be the manufacturer of pharmaceutical formulations and market its produce under various trade marks. One of these marks is ELECTRAL. Trade mark ELECTRAL (word per se) is registered under No. 251636B in class 5 as of 12.9.1968 in respect of pediatric medicinal preparations in the name of the plaintiff. ELECTRAL label is registered under No. 356663 as of 19.12.1979 in class 5 in respect of medicinal and pharmaceutical preparation in the name of the plaintiff. There is a disclaimer which says that the

"registration of this Trade Mark shall give no right to the exclusive use of the device of circle, letters and numericals"

. It is the case of the plaintiff that the pharmaceutical formulation on which the trade mark ELECTRAL is used in an oral formulation of physiologically important electrolytes in palatable carbohydrate base and that this preparation is mainly used for dehydration in case of loss of water from the body due to diarrhoea, dysentry, shock, etc. Further claim of the plaintiff is that it introduced this product under aforesaid trade mark ELECTRAL in the market in November, 1972, and has sold goods worth crores of rupees and also incurred expenses on large scale advertisements on this product. Then the plaintiff claims that this product has been manufactured and marketed under the registered trade mark ELECTRAL label in a distinct sachet bearing distinct colour scheme and get up. This sachet bears colour scheme in the white, green and black colours and specimen of this sachet has been filed with plaint. Of course, there are further claims that the public at large associates the trade mark ELECTRAL and the sachet to the product of the plaintiff. In para 8 of the plaint it is stated that in the month of September, 1984, the plaintiff learnt that defendant had brought into Delhi market a similar medicinal preparation under the name/mark VIJAY ELECTROLYTE in sachet like that of the plaintiff and a specimen of this sachet was also filed alongwith the plaint (Annexure 'X'). The medicinal preparation of the defendant is same as that of the plaintiff. Grievance of the plaintiff is not to the medicine but it is that the defendant adopted a deceptively simila trade mark VIJAY ELECTROLYTE in respect of the same goods and is also marketing the same in a sachet deceptively similar to that of the plaintiff both in colour scheme and get up. Then in para 14 of the plaint it is alleged that the cause of action to file the present suit arose in the month of September, 1984, when the plaintiff learnt about the offending activities of the defendants on purchase of the product with the offending mark at Delhi on 25th September, 1984.

2. Alongwith the suit an application being I.A. 6468/84 was filed. In this it was also stated that it was in the month of September, 1984, that the plaintiff learnt that defendant had brought into Delhi market a similar medicinal preparations under the name/mark VIJAY ELECTROLYTE in packets similar to that of the plaintiff. An and interim injunction was prayed against the defendant from using the mark VIJAY ELECTROLYTE as aforesaid.

3. On 16th November, 1984, I issued notice of this application to the defendant for 14th January, 1985 and in the meanwhile I rasertained the defendant from selling its product in sachet like Annexure 'X' or other such like sachets similar to that of the plaintiff. Defendant filed reply to this application to which rejionder was also given by the plaintiff. The defendant also filed an application (I.A. 77/85) praying for discharge and/or variation of the order of 16th November, 1984.

4. An noticed above the plaintiff in the plaint as well as in the application submitted that it was only in September, 1984, that the plaintiff came to know about the offending activities of the defendant on purchase of the product with offending mark in Delhi on 25th September, 1984. Defendant has placed on record a copy of the notice dated 14th July 1982, sent by Mr. M. V. Rajadhyaksha, Advocate of the plaintiff to the defendant. In this Mr. Rajadhyaksha referred to an earlier notice of February 12, 1981, sent by him on behalf of the plaintiff to the defendant. The objection was taken by the plaintiff to the use of the name VIJAY ELECTROLYTE by the defendant and the defendant was called upon the discontinue forthwith marketing of its product in the sachets with colour and design scheme as that of the plaintiff. The defendant had replied to this notice by its letter dated 4th September, 1982. From this is quite obvious that the plaintiff was aware that the defendant was selling its products in the name of VIJAY ELECTROLYTE in the sachets with similar colour and design as that of the plaintiff as far back as in February, 1981. Mr. Krishan Kumar, learned counsel for the defendant, therefore, contended that the plaintiff is guilty not only of making false averments but also of concealing true facts. He submitted that on this very ground the application of the plaintiff be dismissed and the interim order vacated.

5. Mr. Anoop Singh, learned counsel for the plaintiff, had no answer to this as to why it was averred that the plaintiff came to know about the offending activities of the defendant only in September, 1984. He merely stated that the service of the notice by the plaintiff's advocate was not to the knowledge of Mr. C. D. Kamath, Director of the plaintiff, who signed the plaint and filed the application supported by his affidavit. He however, submitted that since the defendant had admitted the use of the offending sachet, which infringes the plaintiff's registered trade mark, there was always a fresh cause of action. But, then it was submitted by the defendant that it was not the plaintiff a lone which was exclusively using the sachet in which it was selling its product under the mark ELECTRAL. This sachet of the plaintiff is having green background. The plaintiff is also selling its product ELECTRAL FORTE AND ELECTRAL-M in similar sachet with colour background of violet and brown respectively. Mr. Krishan Kumar also brought on record sachet of various pharmaceutical which have been selling their products in some what similar sachets as that used by the plaintiff for marketing its products under the mark ELECTRAL. Some of these are CILTRAL of Climax chemicals, ELECTORAL of Prakash Pharmaceuticals, PLAXOLYTE of Priti Pharma, A OLYTE of Apolo Pharmaceutical Laboratories, ARSTOLITE Aarkees Pharmaceuticals, LEALITE of Leal Pharma. Then there are also those with somewhat different colour scheme but with almost same get up as PLAXOLYTE of Priti Pharma, ENDO ELECTROLYTE of Endolabs, B-TRAL of Bombay Pharma Products and FLOELECTRAL of Flora Pharma Private Ltd. To this the argument of the plaintiff was that now that it has been made aware of the infringements by the defendant the plaintiff would be taking action atainst all these parties. Then the defendant has brought on record copies of various bills right from October, 1980, to show the sale of its product VIJAY ELECTROLYTE. The defendant also placed on record its statement showing sale figures of this product. In the year 1980 the sales for 2 month were for Rs. 6,400/- in 1981 for about Rs. 94,000/- in 1983 for about 30,000 in 1983 for about Rs. 6,500/- and in 1984 for about Rs. 3,30,000/-. Thus, Mr. Krishan Kumar submitted that not only the plaintiff is guilty of laches, but has come to the Court with unclean hands after suppressing material facts and making false averments and also that in case of temporary injunction, these are important factors which weight with any Court while granting temporary injunction. It is submitted that the defendant was bound to suffer an irreparable loss in case the temporary injunction was continued Mr. Anoop Singh, however submitted that delay is not quite material in the present case and that interim order, should be continued in the interest of public at large. He stated that the drug which was marketed by the plaintiff under the mark ELECTRAL and that marketed by the defendant under the mark VIJAY ELECTROLYTE was not a schedule drug and that anybody could buy the same. He submitted that use by the defendant of the sachet of the type of the plaintiff is bound to cause confusion in the minds of the public.

6. I do not think Mr. Anoop Singh is quite right. For one thing he himself did not press that the defendant should not use that mark VIJAY ELECTROLYTE. His only attack was on the user by the defendant of the sachet similar to that of the plaintiff. Rather I would say that Mr. Krishan Kumar is right when he says that such type of medicine, as marketed by both the parties, is not something that any person can go to a chemist and buy it either the person will get a prescription from the Doctor or he will go to the Chemist to buy medicine for the ailment. I do not think either the Doctor of the Chemist would be deceived. I may also notice that while the price of the product of defendant, as printed on the sachet, is Rs. 6/- that of the plaintiff is lettle less. It is nobody's case that defendant is marketing a sub-standard product. He has filed on record a copy of the licence issued to it by the Food and Drugs Controller Madhya Pradesh, for the manufacture of product in question. This certificate is dated 24th November, 1979.

7. At this stage of the case I have to take only a prima facie view of the matter each party will have ample opportunity to lead evidence to prove its case during the course of the trial.

8. In this view of the matter I am of the opinion that the temporary injunction granted by me should be vacated. It is not that once a Court finds that the plaintiff has a prima facie case, the temporary injunction should be granted. The plaintiff, in this case, was aware of the use of the alleged offending mark by the defendant as far back in February 1981. It kept quite all these years. Once it has come to the court, it cannot get temporary injunction just as a matter of course to the detriment of the defendant. By its conduct the plaintiff led the defendant to believe that the defendant could market its product in the sachet, which now plaintiff claims, offends its registered mark. Balance of convenience appears to be in favour of the defendant as it is continuously selling its product in sachet like Annexure 'X' since 1980. Then, there is the question of the conduct of the plaintiff in making averments in the plaint as well as in the application, which are obviously false.

9. Grant of an ad interim injunction is a serious matter. It is something like condemning the party unberad. I would, certainly, have not granted an ex-parte injunction had it been brought to my notice that the plaintiff was well aware of the alleged infringement by the defendant as far back as February, 1981. The explanation offered by Mr. Anoop Singh that Mr. G. D. Kamath, Director of plaintiff, was not aware of the notice sent by the advocate of the plaintiff to the defendant, cannot be readily accepted. From the record I find that the same advocate who sent the notice, has also identified Mr. G. D. Kamath, as would be seen from the affidavit filed in support of the application by the plaintiff. I, therefore, propose to proceed against the plaintiff for making false declaration. I would have also certainly proceed against the plaintiff even if I had confirmed the interim order.

10. Both the parties did refer to a few judgments but the view which I have taken on the facts of this case, I don't fell necessary to refer to any of those decisions.

11. I, therefore dismiss the application of the plaintiff being I. A. 6468/84 and vacate the order dated 16th November, 1984. At the same time application of the defendant being A.A. 77/85 is allowed. Defendant would be entitled to costs. Counsel's fee Rs. 500/-

Fair Deal Corporation Private Limited v. Vijay Pharmaceuticals

Judicial Opinion Summary — D.P. Wadhwa, J.

Factual and Procedural Background

Legal Issues Presented

Arguments of the Parties

Plaintiff's Arguments

Defendant's Arguments

Table of Precedents Cited

Court's Reasoning and Analysis

Holding and Implications

Fair Deal Corporation Private Limited v. Vijay Pharmaceuticals

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