Priya Rubber & Plastic Industries And Others v. Bajrangbali Industries And Others

V.P Goel, J.:— This F.A.F.O under Order XLIII. Rule 1 (r) of the Code of Civil Procedure has been filed by defendants against the order dated 15.5.1993, passed by the learned IVth Additional District Judge, Varanasi by which learned Judge has allowed the application 6-Ga and granted ad interim injunction restraining the defendants from manufacturing and selling in any manner whatsoever their traditional product of “Rubber Hawai Chappals”, Sleepers and straps of Chappals being manufactured and sold under the trade name “RUPANI”.

2. M/s. Bajrangbali Industries, Kanpur through Bajrang Company and two others as plaintiffs-respondents (hereinafter referred to as the ‘plaintiff’) instituted a Civil Suit No. 50 of 1991 in the Court of Vth Additional District Judge, Varanasi against M/s. Maulana Boot House and six others included as defendants-respondents (hereinafter referred as ‘defendants’) seeking relief, inter alia, for a perpetual injunction restraining the defendants from manufacturing and using the trade mark ‘RUPANI’ for action for passing off, infringement of copyright and rendition of account, etc. Simultaneously, plaintiff filed an application for temporary injunction during the pendency of suit. Vth Additional District Judge, Varanasi granted temporary injunction in terms prayed for by the plaintiff. Both the plaintiff and defendants are engaged in the business of manufacturing of “Rubber Hawai Chappals, Sleepers”. Both of them are dealing in the same or similar kinds of goods and are marketing their products in the name ‘RUPANI’. The plaintiff has its office at Varanasi.

3. The plaint allegations are that plaintiff No. 1 was a partnership concern and plaintiff No. 2 was one of its partner. The plaintiff firm in the year 1987 established a Small Scale Industries for manufacturing Rubber Hawai Chappals, Sleepers and Straps for Chappals at Kanpur, that the plaintiff designed trade mark ‘RUPANI’ for its special and particular appearance and the said trademark was coined and adopted very carefully honestly in respect of the products manufactured by it; that the plaintiff No. 1 granted licence to plaintiff No. 3 permitting him to use the aforementioned trademark in respect of ‘RUPANI’ Hawai Chappals; that the plaintiff also applied for registration of the trademark under the provisions of Trade and Merchandise Act, 1958, that the trademark ‘RUPANI’ under application No. 469844 has been advertised in the Trade Mark Journal No. 984 dated 1.6.1990; that the plaintiffs started using the said trademark ‘RUPANI’ in respect of its manufactured goods of Rubber Hawai Chappals, Sleepers and Straps on or about 17.3.1988 and since then has been carrying on the business of manufacturing and selling of their products under the trademark ‘RUPANI’ continuously and without any interruption; that on introduction of plaintiffs product under the trademark ‘RUPANI’ used by the plaintiffs in respect of the Rubber Hawai Chappals, Sleepers and Straps; the plaintiffs spent huge amount of money since March 1988 in order to give publicity to their products and have acquired immense goodwill and reputation and the use of any other trader manufacturing same goods was bound to cause confusion and deception amounting to passing off; that the said trademark ‘RUPANI’ denoted exclusively the products of plaintiffs and none else. It was further alleged in the plaint that in the month of October 1991, it came to the knowledge of the plaintiffs that defendant No. 3 had filed an objection to the registration of the plaintiffs trademark and it also came to the knowledge of the plaintiffs that the Rubber Hawai Chappals bearing trademark identical to that of the plaintiff RUPANI are being marketed openly and freely in the market of Varanasi and on inquiry, it was discovered that the defendant Nos. 1 and 2 were selling Rubber Hawai Chappals bearing identical trademark to that of the plaintiff at commercial level in Varanasi that the defendant No. 3, i.e, M/s Priya Rubber and Plastic Industries of which the defendant Nos. 4, 5 and 6 are partners were supplying spurious products in bulk quantities bearing the trademark identical to that of the plaintiffs to defendant Nos. 1 and 2, i.e, M/s Maulana Boot House for commercial purpose; that after making a test purchase of one dozen Hawai Chappals for which defendant Nos. 1 and 2 refused to issue cash memo or receipt, the plaintiffs came to know that the defendants had adopted identical letters and had also copied the very style of the letters of the plaintiffs trademark and were with fraudulent intention passing off their bad quality and cheap goods as the goods of the plaintiff; that the use of impugned trademark on the part of defendants in relation to Rubber Hawai Chappals was bound to create confusion and deception among the purchaser public who would be induced to believe that the goods of defendants were associated with or approved by plaintiffs or had some nexus with the plaintiffs which amounted to “passing off” the goods of defendants as those of the plaintiffs; that the said conduct of defendants was dishonest, mala fide and motivated to encash upon the goodwill and reputation attached to plaintiffs' trademark ‘RUPANI’ and earned easy and illegal profits by passing off their goods and/or business as those of plaintiffs; that illegal and nefarious trade activities of the defendants was causing irreparable loss, damage and injury to the goodwill and reputation of plaintiffs and their products.

4. Alongwith the aforesaid suit, the plaintiff-respondents moved an application for temporary injunction for restraining the defendants from manufacturing, selling and offering for sale, advertising, directly or indirectly dealing in Hawai Chappals, Sleepers and Straps of Chappals under the offending trademark ‘RUPANI’ or any other trademark as may be identical to, and/or deceptively similar to trademark ‘RUPANI’ of the plaintiffs or from doing any other trade as may lead to confusion or deception amounting to passing off the goods and/or business of defendants for those of the plaintiffs. The aforesaid application was supported by an affidavit wherein the plaint allegations were repeated.

5. The defendants-appellants filed a detailed counter-affidavit denying the allegations made in affidavit filed alongwith injunction application, inter alia, alleging that the word ‘RUPANI’ for trademark was not coined honestly and bona fide by the plaintiffs but the said trademark ‘RUPANI’ had been adopted by defendant Nos. 3 to 6 for their business, Priya Rubber and Plastic Industries since long from the year 1981 and said mark inherently and distinctively denotes the goods of defendants' firm exclusively and none else and the said trademark of defendants had been in long, prior, honest, continuous, extensive and voluminous use by defendants since 1981 and consequently it had acquired an unique and enviable goodwill and reputation amongst the purchasing public at large and the plaintiffs, subsequently, after a long interval when found that the business of defendants had captured a wide market adopted and started since 1988 to use the said trademark/trade name ‘RUPANI’ in relation to their business of same kind which was being done by the defendant Nos. 3 to 6 and the same was done with a mala Jide motive and illegal design to dislodge the defendants from their flourishing trade; that plaintiffs maliciously and wrongly applied for registration of the trademark in respect of Rubber Hawai Chappals, Sleepers, Straps for Chappals which was advertised in Trade Mark Journal No. 984, dated 1.6.1990 and against the aforesaid advertisement an objection has been filed by defendants on 16.6.1990 and aforesaid matter of registration of the trademark is still pending before the Registrar, Trade Mark, New Delhi, and as such, it is not open for the plaintiffs to claim any ownership over the aforesaid trademark ‘RUPANI’ and advertisement in Trade Mark Journal of the application of plaintiffs clearly showed on 26.3.1987 that the said trademark was simply proposed to be used; that the plaintiffs had wrongly started to use ‘RUPANI’ trademark after a long interval of time when the trademark ‘RUPANI’ was used by the defendants since 1981 and had become much popular and reputed amongst the dealers, agents, stockists and consumers due to quality of their products and due to wide extensive advertisement with respect thereto; that said trademark ‘RUPANI’ being used by the defendants since the year 1981 had become a household expression in respect of the goods manufactured by the defendant and the present suit had been filed with a nefarious design to destroy the established business of the defendants; that the defendants were the exclusive inventors, and the absolute and true owners, and lawful proprietors of the said trademark ‘RUPANI’ which was a prior and long used trademark of the defendants and was fully associated in the mind of the trading and consuming public at large since 1981 and the Rubber Chappals bearing the trade name ‘RUPANI’ were always deemed to have been manufactured and supplied by the defendants and nobody else; that the trade name ‘RUPANI’ has been illegally used by the plaintiffs simply to deceive traders and consumers in order to reduce the consumption of the products of the defendants, and as such, the plaintiffs were not entitled to take benefits of their deceptive acts and the said suit and relief for injunction was not maintainable on the above grounds.

6. It is further alleged that the defendants had invested huge amount of money in advertising, in publicity and their sale, which in the year 1985-86 was to the tune of Rs. 39,77,991.15 p. and has reached in the year 1990-91 to the tune of Rs. 90,02,214.60 p., and it is plaintiffs, who had illegally adopted aforesaid trademark used by defendants for their products since 1981 with an illegal design to create confusion and deception in the mind of the consumers. The defendants claimed the said trademark denotes goods of defendants' firm exclusively and of none else and it is wrong to say that the defendants were passing off their bad quality and cheap goods as the goods of the plaintiffs. The true fact was that the defendants were selling their own goods, which were distinct and of good standard and quality by using their own trademark ‘RUPANI’ since the year 1981. It was further alleged that the aforesaid suit and the application for injunction was filed on wholly misconceived and frivolous allegations in order to harass the defendants and to materially affect their established business and the plaintiffs were suffering no irreparable loss or damage of their goodwill as alleged by them and further the plaintiffs had no prima facie case and the balance of convenience was also not in their favour and as such, the aforesaid injunction application deserves to be rejected.

7. In reply to the counter-affidavit and objections filed by the defendants-appellants, the plaintiff-respondents filed a rejoinder affidavit.

Defendants-appellants also moved an application before the trial court under Order VII. Rule 11, C.P.C, for rejecting the plaint on the ground that the court had no Jurisdiction to proceed in the matter. The court below, however, did not accept the contention of the learned counsel and rejected the application under Order VII, Rule 11, C.P.C The court below, however, after considering the entire evidence on record and after hearing the learned counsel for parties has come to the conclusion that the plaintiffs have succeeded in establishing prima facie case in their favour, the balance of convenience was also in their favour and if injunction is not granted then the injury would be of Irreparable nature which cannot be compensated either in terms of money or damages and on these findings, the trial court passed the impugned judgment

8. Being aggrieved by the judgment dated 15.5.1993, the defendants-appellants preferred this appeal under Order XLIII, Rule 1(r) of the Code of Civil Procedure.

9. On 19.6.1993, a Division Bench of this Court passed following order:

“Sri K.L Grover has put in appearance on behalf of plaintiff-respondent Nos. 1 and 2. He prays for and is granted one week's time for filing counter-affidavit Rejoinder affidavit may be filed within one week thereafter. List for admission on 6.9.1993 and the stay application may be considered on that date.”

10. Parties have exchanged affidavits and they have also obtained the relevant documents. It has been agreed between parties, which we also consider it necessary in the interest of Justice, to decide the appeal finally at the stage of admission.

11. We have heard learned counsel for the appellants at great length and also Sri K.L Grover, learned counsel for the respondents. Learned counsel for appellants has placed before us the entire material on record and impugned judgment in extenso and urged that the impugned order is wholly illegal, arbitrary against the evidence on record and is liable to be set aside. In support of his contention he has cited (1992) 1 SCC 719 : AIR 1993 SC page 276; Dalpat Kumar v. Prahlad Singh and (1994) 2 SCC 448, Power Control Appliances v. Sumeet Machines Put Ltd.. On the other hand Sri K.L Grover, learned counsel for plaintiffs-respondents vehemently argued that the trial court committed no illegality whatsoever in granting ad interim injunction on the facts and circumstances of the case. In support of his contention, he has placed reliance on the following decisions: AIR 1984 Del 441 : AIR 1985 Delhi 210 : AIR 1985 All 242 : AIR 1986 Delhi 329 : AIR 1986 J&K 71 : AIR 1989 Mad 9 : AIR 1965 SC 980 : AIR 1992 Bom 294 and (1969) 2 SCC 716 : AIR 1970 SC 2062.

12. It is not disputed before us that the defendants-appellants moved an application before the Registrar, Trade Marks, New Delhi for getting their trade-name ‘RUPANI’ and the application was advertised before acceptance under Section 20(1) of the Trade Marks and Merchandise Act in the Trade Marks Journal. The advertisement shows that the defendants-appellants claimed user since 1.11.1981 Similar application of plaintiffs-respondents was also advertised in the Trade Marks Journal being numbered as 469844 dated 27th March, 1987. In opposition to the application No. 469844 in Clause 25 of Bajrangbali Industries, under Section 21(1), Rule 51 of the Trade Marks and Merchandise Act the defendants-appellants filed objections against registration of trade-name ‘RUPANI’ in favour of the plaintiffs-respondents. The said objection was opposed by filing a detailed reply by plaintiffs-respondents before the Registrar of Trade Marks. It is established beyond reasonable doubt from the evidence on the record that regarding registration of their name ‘RUPANI’, the matter is being hotly contested before the Registrar, Trade Mark, New Delhi and as such contesting parties cannot claim to have any exclusive right, as far as the trade-name ‘RUPANI’ is concerned, till the matter is decided by Registrar, Trade Mark and said trade-name is registered in favour of either of the contesting parties. We are, therefore, of the opinion that the trade-name ‘RUPANI’ is being claimed by both contesting parties which dispute is pending before the Registrar, Trade Mark, New Delhi, and none of the parties to the suit can claim exclusive monopoly right to use the said name ‘RUPANI’ till disposal of suit.

13. On these facts, the question which arises for consideration is whether the plaintiff is entitled to get ad interim injunction or not?

14. It is well-settled that the grant or refusal of a temporary injunction is covered by three well-established principles, viz. (1) whether the plaintiffs have made out a prima facie case; (2) whether the balance of convenience is in their favour; (3) whether the plaintiffs will suffer irreparable injury With the first condition as sine qua non, the petitioner is to prove two conditions conjunctively. Mere proof of one of the three conditions does not entitle plaintiff to an order of temporary injunction. The burden of proving prima facie case, balance of convenience and irreparable injury is on the plaintiffs who are praying for the relief. Plaintiffs have to prove high degree of prima facide case. The main concern of the court is to avoid injustice.

15. It is true that while examining the prima facie case in favour of the plaintiffs, the court is not required to examine merits of the case closely and come to, a definite conclusion that applicant has a case in which he is likely to succeed. This would amount to prejudging the suit on merits. Deeper examination of the question is not permissible under law. In deciding the prima facie case, court is to be guided by the apparent strength or otherwise of plaintiffs' case as revealed in the affidavits or other materials. In the instant case the plaintiffs have succeeded by filing an affidavit and other documents on the record that they have prima facie case in their favour. We have perused the impugned judgment carefully and affidavits filed by parties and other documents which have been placed before us by parties and we are of opinion that the court below did not committ any error either on facts or in law in arriving at conclusion that plaintiffs succeeded in proving prima facie, case in their favour and we are not inclined to interfere with this finding.

16. Next question is whether existence of prima facie case in favour of the plaintiff would be enough to grant temporary injunction? Both prima facie case and balance of convenience are necessary. It is not enough for the plaintiff to show that he has a prima facie case. He must further show that; (i) he will suffer an irreparable injury if the relief is refused; (ii) in the event of success in suit he will not have proper remedy by being awarded adequate damages; (111) the balance of convenience is in his favour or in other words, his inconvenience will far exceed the convenience of his opponent in the event of refusal of the prayer; (iv) lastly he must show a clear necessity for affording immediate protection to his alleged right or interest which should otherwise be seriously injured or impaired. Explaining the term “irreparable injury”, Spry says quoting Attorney-General v. Hallet as follows: “I take the meaning of Irreparable injury to be that which, if not prevented by injunction, cannot afterwards be compensated by any decree which the court can pronounce in the result of the cause.” Ordering prohibitory injunction is a drastic action, the violation, being punishable under Order XXXLX, Rule 2A. The court is to exercise great restraint in passing the order. The court should consider if plaintiff has a prima fade case and in whose favour lies the balance of convenience and whether the plaintiff would suffer irreparable injury if no injunction is granted. Irreparable injury is not a result of computer or a mathematical calculation. Human situation with human conduct is to be considered by the court with reference to particular facts available.

17. Applying the guidelines laid down in various decisions of courts as well as Apex Court, we are of the opinion that in the instant case, court below has committed error in granting injunction restraining defendants from manufacturing, selling and offering for sale, advertising, directly or indirectly dealing in Hawai Chappals, Sleepers and Straps of Chappals under the offending trade-name ‘RUPANI’. It is true that the court has recorded a finding that defendants have failed to establish that they are manufacturing Hawai Chappals in the name of ‘RUPANI’ since 1981 in the said name and style since then. This finding by itself would not be sufficient to grant injunction in favour of plaintiffs. The plaintiffs have failed to prove balance of convenience in their favour and also failed to prove irreparable injury if injunction is not granted to them.

18. According to plaintiffs, cause of action arose only in the year 1991 when plaintiffs came to know in the year 1991 that defendants are manufacturing Hawai Chappals and Straps and the same had been sold to M/s Maulana Boot House in a commercial transaction and that after purchasing one dozen Hawai Chappals for which defendant Nos. 1 and 2 refused to issue cash memo or receipt.

19. It was urged that in any case, the plaintiffs are entitled to temporary Injunction in the terms prayed for action for passing off. The court below has failed to record any finding as to whether the plaintiffs were entitled to temporary injunction for action for passing off. It was vehemently urged before us by learned counsel for defendants that no injunction can be granted for action for passing off on the facts and in the circumstances of the case. Plaintiffs had failed to prove miserably.

20. Next question arises in this case is whether ad interim injunction as claimed by plaintiffs can be granted under Section 27 of Trades and Merchandise Marks Act. To appreciate the arguments of learned counsel for the plaintiffs, it is necessary to reproduce Section 27 of Trade and Merchandise Marks Act:

“27. No action for infringement of unregistered trade-mark.—

(1) No person shall be entitled to institute any proceeding to prevent, or to recover damages for, the infringement of an unregistered trade-mark.

(2) Nothing in this Act shall be deemed to affect rights of action against any person for passing-off goods as the goods of another person or the remedies in respect thereof.”

21. It was then argued that in any case the plaintiff was entitled to temporary injunction in the terms prayed for action for passing off. Now the action for infringement and passing off are closely similar in some respect and the considerations in dealing with cases of passing off may be overlapping to some extent with those of infringement but the distinction between an infringement action and a passing off action is important and is settled by now. The general principle of law of passing off is that no man is entitled to represent his goods as being those of another. The action for passing off is a common law remedy and its gist is deceit and not infringement of a right to exclusive use. In Durga Dutt v. Nav Ratan Pharmaceuticals Laboratories, AIR 1965 SC 980, it was observed:—

“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 Section 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.”

22. In considering a given case for an action for passing off. One of the essential test is whether there is a reasonable probability that the use of the name adopted by the defendant was likely to mislead the customers of plaintiffs by reason of similarity of the two trade-names. This test was suggested as one of the tests in Victory Transport Co. Put. Ltd. Ghaziabad v. District Judge, Ghaziabad, AIR 1981 All 421, by a learned Single Judge of this Court. This element of confusion Is essential and its tendency to mislead or confuse is the essence of action of passing off. In the words of Salmond:

“The gist of the conception of passing off is that the goods are in effect telling a falsehood about themselves, are saying something about themselves, which is calculated to mislead. The law on this matter is designed to protect traders against that form of unfair competition which consists in acquiring for oneself, by means of false or misleading devices, the benefit of the reputation already achieved by rival traders.”

23. Thus, the crux of an action for passing-off is that the defendants are selling goods so marked as to be designed or calculated to lead purchasers to believe those are the plaintiffs' goods. The defendant is not entitled to represent his goods as the goods of the plaintiff. The Supreme Court in Ruston and Hornby Ltd. v. Zamindara Engineering Co., (1969) 2 SCC 727 : AIR 1970 SC 1649, observed that “the gist of a passing-off action is 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 any intent to deceive. It is enough that the get up of B's goods have become distinctive of them and that there is probability or actual deception nor any actual damage need be proved.”

24. The onus in a passing off action lies on the plaintiff to establish the existence of the business reputation or goodwill in a relevant trademark which he seeks to protect, and is likely to suffer on account of passing off. in the instant case, plaintiffs failed to discharge onus and hence not entitled to ad interim injunction for passing off action. The law is well-settled that temporary injunction would be granted only if three conditions are satisfied namely; (1) whether the petitioner has made out a prima facie case; (2) whether the balance of convenience is in his favour; and (3) whether the petitioner would suffer irreparable injury. As we have held that plaintiffs have failed to prove the balance of convenience in their favour and also failed to prove irreparable injury if injunction is not granted to them is sufficient to set aside the impugned judgment.

25. In result, appeal is allowed, impugned order dated 15.5.1993 of the court below is reversed and application 6-Ga of plaintiffs under Order XXXIX, Rules 1 and 2 of C.P.C is rejected. Parties shall bear their own costs.