Per contra, learned counsel for the respondent while opposing the submissions made by the learned senior counsel representing the petitioners, has vehemently submitted and argued that a perusal of the plaint (Annexure P-32) clearly reveals that it is a composite suit, both for infringement and passing off. While drawing attention of this Court to the averments made in the plaint, she has submitted that the ingredients of passing off are clearly set out and reflected in it. So much so that even the reliefs in action for infringement and passing off are similar as per Section 135 of the Act. She has submitted that the respondent has already filed objections and rectifications against the trade marks of the petitioners as they are invalid. In addition, it is a matter of record that the respondent was a prior user and proprietor of the trade mark as well as the other formative trade marks. She has still further argued that the petitioners in the suit in question as well as in the application filed under Order VII Rule 11 CPC (Annexure P33), have taken a stand that the
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competing marks were different, however, at the same time in paragraph No.4 of their application they have placed reliance upon the provisions of Section 28(3) read with Section 30(2)(e) of the Act. She has further submitted that relief by virtue of the provisions of Section 28(3) read with Section 30(2)(e) of the Act would be available to the petitioners only if the marks were admitted to be similar. However, it is clearly discernible that the petitioners are taking mutually destructive/self- contradictory pleas as, on the one hand it has been averred that the competing marks were different while on the other hand they claim that their trade marks were registered and that of the respondent were similar. While strongly disputing the submissions made by the learned senior counsel for the petitioners, learned counsel for the respondent has also submitted that the suit for infringement filed by registered proprietor against another registered proprietor having similar mark, was maintainable and not barred under the provisions of Section 28(3) read with Section 30(2)(e) of the Act. Learned counsel has, therefore, vehemently urged that the instant petition deserves to be dismissed as it was abundantly clear that the application under Order VII Rule 11 CPC was filed by the petitioner with the sole motive to delay the trial. Learned counsel for the respondent has vehemently argued that while deciding an application under Order VII Rule 11 CPC, the only question which is to be considered and determined is, as to whether a prima facie case is made out or not on a perusal of the averments made in the plaint, and the Court cannot go beyond this. In support, learned counsel has placed reliance
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upon 'Rajnish Aggarwal & others v. M/s Anantam' 2009 SCC Online Del. 3827 and 'Abbott Healthcare Private Limited v. Raj Kumar Prasad and others' 2014 SCC Online Del. 2727.
I have heard learned counsel for the parties and perused the relevant material on record.
It would be relevant to observe here that the underlying object behind the provisions of Order VII Rule 11 CPC is to check sham litigation so as to prevent wastage of judicial time. While adjudicating upon an application under Order VII Rule 11 CPC for rejection of a plaint, the Court has to just restrict its enquiry to the averments made in the plaint, which in turn have to be read in conjunction with the documents relied upon by the plaintiff. It would also be relevant to note that a plaint cannot be rejected merely on a partial perusal of the plaint, rather a meaningful reading of the plaint in its entirety would be necessary to arrive at a conclusion as to whether or not the plaint deserves to be rejected. Still further, at the stage of deciding an application under Order VII Rule 11 CPC, the defence of defendant cannot be taken into consideration.
Adverting to the case in hand, the petitioner has sought rejection of the plaint on the ground of it being barred by the provisions of Section 28(3) of the Act. It is the specific plea of the petitioner that since he is also a registered proprietor of the trade mark 'Mantra', a suit for infringement by the respondent against him would not be
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maintainable. For facility of reference, Section 28(3) of the Act is reproduced herein below:-
"28. Rights conferred by registration.
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(3) Where two or more persons are registered proprietors of trade marks, which are identical with or nearly resemble each other, the exclusive right to the use of any of those trade marks shall not (except so far as their respective rights are subject to any conditions or limitations entered on the register) be deemed to have been acquired by any one of those persons as against any other of those persons merely by registration of the trade marks but each of those persons has otherwise the same rights as against other persons (not being registered users using by way of permitted use) as he would have if he were the sole registered proprietor."
Hon'ble Supreme Court in S. Syed Mohideen's case (supra), while dealing with a similar question, held as under:
"22. Sub-Section (3) of Section 28 with which we are directly concerned, contemplates a situation where two or more persons are registered proprietors of the trade marks which are identical with or nearly resemble each other. It, thus, postulates a situation where same or similar trade mark can be registered in favour of more than one person. On a plain stand alone reading of this Section, it is clear that the exclusive right to use of any of those trade marks shall not be deemed to have been acquired by one registrant as against other registered owner of the trade
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mark (though at the same time they have the same rights as against third person). Thus, between the two persons who are the registered owners of the trade marks, there is no exclusive right to use the said trade mark against each other, which means this provision gives concurrent right to both the persons to use the registered trade mark in their favour. Otherwise also, it is a matter of commonsense that the plaintiff can not say that its registered trade mark is infringed when the defendant is also enjoying registration in the trade mark and such registration gives the defendant as well right to use the same, as provided in Section 28(1) of the Act."
In the instant case, on a careful reading of the averments made in the plaint, respondent has not disputed and rather admitted that the petitioner is the registered owner of the trade mark. Whether the petitioner was wrongly or rightly granted the registration of the trade mark, is not the issue before this Court. Thus, prima-facie the protection afforded under Section 28(3) of the Act to the registered proprietor would be available to the petitioner. However, it would be relevant to point out here that the suit in question is not simplicitor a suit for infringement, rather it is a composite suit for infringement as well as passing off. As per the averments in the plaint, respondent has claimed itself to be the prior user of the trade mark and hence, sought the relief of passing off. Passing off is a common law remedy, which is unaffected by the registration of a similar trade mark by another person, under the statutory provisions of the Act. Passing off recognizes the right of a prior
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user of the trade mark under dispute and if the three ingredients of passing off, i.e. goodwill, misrepresentation and damage are satisfied, such prior user would be entitled to the relief of passing off and in such a case, registration of a trade mark would not be an embargo to an action of passing off. The right of passing off is a broader remedy than that of infringement under the Act. Hon'ble the Apex Court in S. Syed Mohideen's case (supra), has further observed as under:
"23. However, what is stated above is the reflection of Section 28 of the Act when that provision is seen and examined without reference to the other provisions of the Act. It is stated at the cost of repetition that as per this Section owner of registered trade mark cannot sue for infringement of his registered trade mark if the appellant also has the trade mark which is registered. Having said so, a very important question arises for consideration at this stage, namely, whether such a respondent can bring an action against the appellant for passing off invoking the provisions of Section 27(2) of the Act. In other words, what would be the interplay of Section 27(2) and Section 28(3) of the Act is the issue that arises for consideration in the instant case. As already noticed above, the trial court as well as High Court has granted the injunction in favour of the respondent on the basis of prior user as well as on the ground that the trade mark of the appellant, even if it is registered, would cause deception in the mind of public at large and the appellant is trying to encash upon, exploit and ride upon on the goodwill of the respondent herein. Therefore, the issue to be determined is as to whether in such a scenario, provisions of Section 27(2) would still be
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available even when the appellant is having registration of the trade mark of which he is using. After considering the entire matter in the light of the various provisions of the act and the scheme, our answer of the aforesaid question would be in the affirmative. Our reasons for arriving at this conclusion are the following:
(A) Firstly, the answer to this proposition can be seen by carefully looking at the provisions of Trade Marks Act, 1999 (The Act). Collective reading of the provisions especially Section 27, 28, 29 and 34 of the Trade Marks Act, 1999 would show that the rights conferred by registration are subject to the rights of the prior user of the trademark. We have already reproduced Section 27 and Section 29 of the Act. From the reading of Section 27 (2) of the Act, it is clear that the right of action of any person for passing off the goods/ services of another person and remedies thereof are not affected by the provisions of the Act. Thus, the rights in passing off are emanating from the common law and not from the provisions of the Act and they are independent from the rights conferred by the Act. This is evident from the reading of opening words of Section 27(2) which are
"Nothing in this Act shall be deemed to affect rights….."
Likewise, the registration of the mark shall give exclusive rights to the use of the trademark subject to the other provisions of this Act. Thus, the rights granted by the registration in the form of exclusivity are not absolute but are subject to the provisions of the Act.
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Section 28 (3) of the Act provides that the rights of two registered proprietors of identical or nearly resembling trademarks shall not be enforced against each other. However, they shall be same against the third parties. Section 28 (3) merely provides that there shall be no rights of one registered proprietor vis-à-vis another but only for the purpose of registration. The said provision 28 (3) nowhere comments about the rights of passing off which shall remain unaffected due to overriding effect of Section 27(2) of the Act and thus the rights emanating from the common law shall remain undisturbed by the enactment of Section 28(3) which clearly states that the rights of one registered proprietor shall not be enforced against the another person.
Section 34 of the Trade Marks Act, 1999 provides that nothing in this Act shall entitle the registered proprietor or registered user to interfere with the rights of prior user. Conjoint reading of Section 34, 27 and 28 would show that the rights of registration are subject to Section 34 which can be seen from the opening words of Section 28 of the Act which states "Subject to the other provisions of this Act, the registration of a trade mark shall, if valid, give to the registered proprietor…." and also the opening words of Section 34 which states "Nothing in this Act shall entitle the proprietor or a registered user of registered trade mark to interfere……". Thus, the scheme of the Act is such where rights of prior user are recognized superior than that of the
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registration and even the registered proprietor cannot disturb/interfere with the rights of prior user. The overall effect of collective reading of the provisions of the Act is that the action for passing off which is premised on the rights of prior user generating a goodwill shall be unaffected by any registration provided under the Act. This proposition has been discussed in extenso in the case of N.R. Dongre And Ors. v. Whirlpool Corporation And Anr. AIR 1995 Delhi 300 wherein Division Bench of Delhi High Court recognized that the registration is not an indefeasible right and the same is subject to rights of prior user. The said decision of Whirlpool [supra] was further affirmed by Supreme Court of India in the case of N.R. Dongre And Ors v. Whirlpool Corporation And Anr 1996(3) RCR (Civil) 697 : (1996) 5 SCC 714.
(B) The above were the reasonings from the provisions arising from the plain reading of the Act which gives clear indication that the rights of prior user are superior than that of registration and are unaffected by the registration rights under the Act. Secondly, there are other additional reasonings as to why the passing off rights are considered to be superior than that of registration rights. Traditionally, passing off in common law is considered to be a right for protection of goodwill in the business against misrepresentation caused in the course of trade and for prevention of resultant damage on account of the said misrepresentation. The three ingredients of passing off are goodwill,
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misrepresentation and damage. These ingredients are considered to be classical trinity under the law of passing off as per the speech of Lord Oliver laid down in the case of Reckitt & Colman Products Ltd. v Borden Inc (1990) 1 All E.R. 873 which is more popularly known as "Jif Lemon" case wherein the Lord Oliver reduced the five guidelines laid out by Lord Diplock in Erven Warnink v. Townend & Sons Ltd. (1979) AC 731, 742 (HL) (the "Advocate Case") to three elements: (1) Goodwill owned by a trader,
(2) Misrepresentation and (3) Damage to goodwill. Thus, the passing off action is essentially an action in deceit where the common law rule is that no person is entitled to carry on his or her business on pretext that the said business is of that of another. This Court has given its imprimatur to the above principle in the case of Laxmikant V. Patel v. Chetanbhat Shah & Anr. 2002(2) RCR (Civil) 357 : (2002) 3 SCC 65.
The applicability of the said principle can be seen as to which proprietor has generated the goodwill by way of use of the mark/name in the business. The use of the mark/carrying on business under the name confers the rights in favor of the person and generates goodwill in the market. Accordingly, the latter user of the mark/name or in the business cannot misrepresent his business as that of business of the prior right holder. That is the reason why essentially the prior user is considered to be superior than that of any other rights. Consequently, the examination of rights in common law which are based on goodwill, misrepresentation
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and damage are independent to that of registered rights. The mere fact that both prior user and subsequent user are registered proprietors are irrelevant for the purposes of examining who generated the goodwill first in the market and whether the latter user is causing misrepresentation in the course of trade and damaging the goodwill and reputation of the prior right holder/former user. That is the additional reasoning that the statutory rights must pave the way for common law rights of passing off.
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We uphold said view which has been followed and relied upon by the courts in India over a long time. The said views emanating from the courts in India clearly speak in one voice which is that the rights in common law can be acquired by way of use and the registration rights were introduced later which made the rights granted under the law equivalent to the public user of such mark. Thus, we hold that registration is merely a recognition of the rights pre-existing in common law and in case of conflict between the two registered proprietors, the evaluation of the better rights in common law is essential as the common law rights would enable the court to determine whose rights between the two registered proprietors are better and superior in common law which have been recognized in the form of the registration by the Act."
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It is, therefore, abundantly clear that an action for passing off would be maintainable even against a registered proprietor of Trade Mark.
It would also be relevant to reproduce Section 135 of the Act, which reads as follows:-
"135. Relief in suits for infringement or for passing off.-
(1) The relief which a court may grant in any suit for infringement or for passing off referred on in section 134 includes injunction (subject to such terms, if any, as the court thinks fit) and at the option of the plaintiff, either damages or an account of profits, together with or without any order of the plaintiff, either damages or an account of profits, together with or without any order for the delivery- up the infringing labels and marks for destruction or erasure.
(2) The order of injunction under sub-section (1) may include an ex parte injunction or any interlocutory order for any off the following matters, namely :-
(a) for discovery of documents.
(b) preserving of infringing goods, documents or other evidence which are related to the subject- matter of the suit.
(c) restraining the defendant from disposing of or dealing with his assets in a manner which may adversely affect plaintiff's ability to recover damages, costs or other pecuniary remedies which may be finally awarded to the plaintiff.
(3) Notwithstanding anything contained in sub- section (1), the court shall not grant relief by way of
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damages (other than nominal damages) or on account of profits in any case -
(a) where in a suit for infringement of a trade mark, the infringement complained of is in relation to a certification trade mark or collective mark, or
(b) where in a suit for infringement the defendant satisfies the court-
(i) that at the time he commenced to use the trade mark complained of in the suit, he was unaware and had no reasonable ground for believing that the trade mark of the plaintiff was on the register or that the plaintiff was a registered user using by way of permitted use, and
(ii) that when he becomes aware of the existence and nature of the plaintiff's right in the trade mark, he forthwith ceased to use the trade mark in relation to good or services in respect of which it was registered, or
(c) where in suit for passing off, the defendant satisfies the court-
(i) that at the time he commenced to sue the trade mark complained of in the suit he was unaware and had no reasonable ground for believing that the trade mark of the plaintiff was in use, and
(ii) that when he became aware of the existence and nature of the plaintiff's right in the trade mark, he forthwith
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ceased to use the trade mark complained of."
The aforesaid provision reveals that the legislature in its wisdom has provided for similar remedies, both in the case of infringement as well as in the case of passing off. This Court is unable to concur with the submissions made by the learned senior counsel that the suit in question is exclusively a suit for infringement and that only a mere use of the nomenclature 'passing off' would not bring it within the ambit of a composite suit. Still further, on a minute perusal of the plaint, the ingredients of passing off are clearly discernible. Mere use of the nomenclature 'infringement' repeatedly would not in any manner change the nature of the suit in question. Even otherwise, the authorities of other common law jurisdictions like England such as Kerly's law of Trade Marks and Trade Names, Fourteenth Edition, Thomson, Sweet & Maxwell South Asian Edition recognizes the principle that where a trade mark action fails, an action for passing off may still succeed on the same evidence. In Kerly's law (supra), the author has observed as follows:-
"15-033 A claimant may fail to make out a case of infringement of a trade mark for various reasons and may yet show that by imitating the mark claimed as a trade mark, or otherwise, the defendant has done what is calculated to pass off his goods as those of the claimant. A claim in 'passing off' has generally been added as a second
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string to actions for infringement, and has on occasion succeeded where the claim for infringement has failed." In the circumstances, this Court has no hesitation in holding that since it is a composite suit, the plaint could not have been rejected being barred under law. The plaint as a whole must be rejected under Order VII Rule 11 CPC and partial rejection of a plaint is not permissible under law as has also been held by the Hon'ble Supreme Court in 'Sejal Glass Limited v. Navilan Merchants Private Limited' 2018 (11) SC
780.
The case laws relied upon by the petitioners would be applicable only in those cases where the suit is simplicitor for infringement. However, in the instant case the suit is a composite one for both infringement as well as passing off. Hence, this Court does not find any error in the impugned order, wherein application under Order VII Rule 11 CPC for rejection of plaint was rightly dismissed by the courts below.
As a sequel to the above, the instant petition being devoid of any merit is dismissed. Nothing contained hereinabove would be deemed to be an expression on merits of the suit.
(MANJARI NEHRU KAUL)
JUDGE
July 22, 2022
rps Whether speaking/reasoned Yes/No Whether reportable Yes/No
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