N.R. DONGRE AND ORS. A

v.

WHIRLPOOL CORPORATION AND ANR.

AUGUST 30, 1996

B

[J.S. VERMA AND K. VENKATASWAMI, J.1.)

Trade Marks Law :

Code

of Civil Procedure,

1908 : Order 39 Rules 1, 2 and 4.

c

Tempormy i11junctiow-Passing off action-Trade mark 'Whirlpool'­

Registratio11 of-Granted i11 favour of defe11dants-Suit in the nature of

passing-off action brought by plai11tiffs to restrai11 defenda11ts from manuf ac­

twing,

selli11g, adve1tising or i11 ally way using trade mark 'Whirlpool' in their

washi11g machine deceptively or co11fusingly-High Court

found mark/name D

'Whirlpool' 1011g associated with plaintiffs who acquired trans-border reputa-

tion

ill respect of same, that there was no reliable evidence of defendants

having marketed their washing machines

ill that name for a co11siderable

length of time, that

i1Teparable injury would be caused to plaintiff'~- reputation

and goodwill because washing machines of defendants bearillg that mark were

11ot of same sta11dard and quality as those of plaintiffs' machines, whereas

no illjwy would be caused to def endallts by grant of injunction as their

machines could be sold just with removal or replacement of label

'Whirlpool'-Accordingly, tempormy injunction was gra11ted by High Court ill

favour of plailltiffs-H eld : injunction was based on equitable priw­

ciples-Conclusion reached by High Court reasonable a11d based Oil relevant

material-Hence, Supreme Court's illteiference by reassessment of material

not called for at the stage

of second appeal-Constitution of India,

1950,

Article 136-Trade and Marchandise Marks Act, 1958, Sections 46 and 56.

Torts:

Passing-off

action-Ullf air trading activities-Trade mark, being used

by a company, was registered by another company through false

repre­

sentation to obtain economic benefit of reputatioll established by the other

compally-Held : passing-off action was maintainable in law even against

E

F

G

registered owner of trade mark. H

369

A

B

370 SUPREME COURT REPORTS (1996] SUPP. 5 S.C.R.

The respondent-plaintiffs filed a suit in the High Court seeking

temporary injunction against the appellants-defendants which

was granted

by the Single Judge and affirmed on appeal by the Division Bench of the

High Court. The finding of the High Court were :

(i) Long prior user of the name of

'WHIRLPOOL' by plaintiff No.

1 and a transborder reputation and goodwill extending to India to the use

of

that name :

(ii')

Prior registration of that name even in India from 1956-57 to

1977 against the earliest claim

by the defendants from 1986 (the date of

C application for registration) :

(iii)

Grant of registration to the defendants on 12.8.1992, only on

the ground of proposed user instead of actual user, which was opposed by

the

plaintiffs and is subject to the outcome in the pending appeal :

D (iv) No reliable evidence of the defendants having marketed their

washing machines for any considerable length for time prior to

grant of

the interlocutory injunctions :

(v) Irreparable injury to the plaintiffs' reputation and goodwill with

whom the name of

'WHIRLPOOL' is associated, because of the washing

E machines of the defendants not being of the same standard and quality of

performance as the plaintilrs machines :

F

(vi)

On the other hand, no injury to the defendants by grant of the

injunction inasmuch as the defendants' washing machines can

be sold

under the other names used earlier, with the removal

and replacement

only of the small metallic strip which bears the offensive trade mark/name

which includes

'WHIRLPOOL'; and

(vii) There is no justification to accuse the plaintiffs of culpable

delay, acquiescence and !aches or abandonment

so as to disentitle them

G from the relief of injunction.

It was also held by the High Court that there was no plausible

explanation offered

by the defendants for recently adopting the mark

'WHIRLPOOL' when business in washing machines was being carried out

earlier in other names, which is supportive of the plea of unfair trading

H activity in an attempt to obtain economic benefit of the reputation estab-

,

N.R. DONGREv. WHlRLPOOLCORPN. 371

lished by the plaintiff No. 1, whose name was associated with the mark A

'WHIRLPOOL'. The plaintiffs' conduct in opposing the defendants' ap­

plication for registration as soon as it was notified and persisting in the

opposition

by filing an appeal against the Registrar's order and then an

application for rectification of the entry

in the register on grant of the

certificate and also filing the suit without delay was referred

by the trial

court as sufficient to suggest

that there was no abandonment of the mark,

acquiescence

or !aches by the plaintiffs. Being aggrieved the appellants­

defendants preferred the present appeal.

B

Dismissing the appeal, this Court

HELD :

1. Admittedly, passing off action in maintainable in law even

against a registered owner of the trade

mark and, therefore, the fact that

the defendants have obtained a registration (subject to the outcome of a

pending appeal) is

by itself not sufficient to render the suit not main-

c

tainable. [383-B-C] D

2.1. A mark in the form of a word which is not a derivative of the

product, points to the source of the product. The mark/name

'WHIRLPOOL' ·is associated for long, much prior to the defendants'

application in 1986 with the Whirlpool

Corporation-plaintiff No. 1. In E

view of the prior user of the mark by plaintiff No. 1 and its trans-border

reputation extending to India, the trade

mark

'WHIRLPOOL' gives an

indication of the origin of the goods as emanating from or relating to the

Whirlpool Corporation-plaintiff

No. 1. The High Court has recorded its

satisfaction

that use of

the 'WHIRLPOOL' mark by the defendants indi­

cates

p1ima f acie an intention to pass-off defendants' washing machines as

those of plaintiff's

or atleast the likelihood of the buyers being confused

F

or misled into that belief. The fact that the cost of defendants' washing

machine is 1/3rd of the cost of the plaintiffs' washing machine itself

supports the plaintiffs' plea

that the defendants' washing machines are not

of the same engineering

standard and are inferior in quality to the washing G

machines of the plaintiffs'. In addition, it has been rightly held that the

grant of interlocutory injunction would cause no significant injury to the

defendants

who can sell their washing machines merely by removing the

small metallic

strip bearing the offensive trade mark/name which includes

'WHIRLPOOL'. On the other hand, refusal of the interlocutory injunction H

372 SUPREME COURT REPORTS [1996] SUPP. 5 S.C.R.

A would cause irreparable injury to the plaintiffs' reputation and goodwill

since the trade mark/name 'WHIRLPOOL' is associated for long (because

of

prior user and even otherwise) with the plaintiff No. I-Whirlpool

Corporation. These factors which have been relied

on for grant of the

interlocutory injunction

by the trial court indicate that the exercise of

B discretion was in accordance with the settled principles of law relating to

the

grant of interlocutory injunctions in a passing-off action. The

allir­

mance of the trial court's order by the Division Bench on an appeal

reinforces the trial court's

view. [386-D-H; 387-A-B]

2.2. Injunction is a relief in equity and is based on equitable prin-

C ciples.

On the concurrent findings of the courts below, the weight of equity

at this stage is in favour of the plaintiffs and against the defendants. The

concurrent findings, on which the

grant of interlocutory injunction in

favour of the plaintiffs is based is, to say the least, a reasonable conclusion

on the relevant material available

at this stage. It is not for this court at

D the stage to second appeal to reassess the material and reach an

inde­

pendent conclusion thereon for the first time and it has only to be seen

whether the conclusion reached

by the trial court was reasonably possible on

the material. Moreover,

even on a reassessment, it appears that the

con­

clusion reached by the trial court in favour of the plaintiffs is the one more

probable and reasonable on this material. (386-C-D; 385-G-H; 386-A-B]

E

F

Wander Ltd. & Anr. v. Antox India (P) Ltd., (1990] Supp. SCC 727,

relied on.

P1inters (Mysore) Plivate Ltd. v. Pothan Joseph, (1960] 3 S.C.R. 713

and Folder & Co. Ltd. v. 0. & G. Rushton, (1903) 20 RPC 477, cited.

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 10703 of

1996.

From the Judgment and Order dated 21.4.95 of the Delhi High Court

G in F.A.O. No. 262 of 1994.

Kapil Sibal, Harish N. Salve, N.K. Anand, Amarjit Singh, Pravin

Anand, Maninder Singh and Ms. Pratibha M. Singh for the Appellants.

Soli J. Sorabjee,

S.S. Rana,

C.M. Lall, Gopal Jain, Ms. B. Rana and

H Ms. Niti Dikshit for the Respondent No. 1.

'

N.R. DONGRE v. WHIRLPOOL CORPN. [J.S. VERMA, J) 373

AR. Lall, S.S. Rana, Ms. B. Rana, S.S. Rana & Co. for the Respon- A

dent No. 2.

The Judgment of the Court was delivered by

J.S. VERMA, J. This appeal by way of special leave is by the

defendants against whom a temporary injunction was granted by the

B

learned

Single Judge of the Delhi High Court in an Original Suit by order

dated 31st October,

1994, which has been affirmed on appeal by the

Division Bench by its order dated 21.4.1995. The suit

is a passing off action

brought by the plaintiff-respondents to restrain the defendant appellants

from manufacturing. selling, advertising or in any way using the trade mark

C

'WHIRLPOOL' in any other trade mark deceptively or confusingly similar

to the trade mark of 'WHIRLPOOL' in respect of their goods. The subject

matter of this appeal

is the manufacture, sale and advertisement of washing

machines by the defendants-appellants using the mark

'WHIRLPOOL' as

a part of the name

by which they had recently commenced marketing the

washing machines manufactured by them.

In short, the claim of the plain- D

tiff-respondents is based on prior user of the mark

'WHIRLPOOL' and a

trans-border reputation indicating that any goods marketed with the use of

the mark 'WHIRLPOOL' gives the impression of it being a goods

marketed by the plaintiffs; and the washing machines manufactured, sold

and advertised by the defendants

give that impression resulting in confusing E

the intending buyers with the impression. In this suit, the plaintiffs sought

a temporary injunction which has been granted by the learned

Single Judge

and affirmed by the Division Bench of the High Court.

In view of the fact that the trial of the suit has yet to conclude and

the final decision of the suit

is awaited, it is appropriate that the question F

of temporary injunction is decided only on the basis of undisputed facts

and the material which

can legitimately be taken into account at the

interlocutory stage. For this reason reference is confined by us only to such

material which can

be of significance at this stage.

The Whirlpool Corporation, plaintiff No. 1 is a multi-national incor-

G

porated in

U.S.A. TVS Whirlpool Ltd., plaintiff No. 2 is a limited company

incorporated in India in which the plaintiff No. 1 a majority shareholder.

The plaintiff No. 2 has been licensed by the plaintiff No. 1 to use the trade

mark and trade name 'WHIRLPOOL'. The defendants Nos. 1 and 2 are

the trustees

of Chinar Trust; and defendants Nos. 3 and 4 are the trustees H

374 SUPREME COURT REPORTS (1996] SUPP. 5 S.C.R.

A of Mansarovar Trust also trading as USHA-SHRIRAM (India). Usha

International Ltd., the defendant No.

5 is a company incorporated under

the Indian Companies Act. The defendants have registrations in respect of

trade marks such

as

'USHA-SHRIRAM' and USHA-LEXUS'.

B According to the plaintiffs, they have an established business in the

manufacture, sale, distribution and servicing of washing machines of all

kinds

and the plaintiff No. 1 is the surcessor of a trade mark

'WHIRLPOOL' since 1937. By 1957 'WHIRLPOOL' was a leading trade

mark and name in the United States and Canada in relation to washing

machines.

By 1986 the

'WHIRLPOOL' was registered in relation to wash-

C ing machines and dryers in class 7 as well as for appliances in classes 9 and

11 in more than 65 jurisdictions around the world including most of the

commonwealth countries. In

1956-57, the plaintiff No. 1 obtained registra­

tion for the trade mark

'WHIRLPOOL' in India in respect of clothes

dryers, washers, dish washers and some other electrical appliances. These

D registrations were renewed periodically. However, in 1977, the registrations

in India lapsed on account of failure to apply for renewal. In

1987 plaintiff

No. 1 formed a joint venture with the plaintiff

No. 2.

On 15.7.1988 applica­

tions were moved by the plaintiffs with the Registrar of Trade Marks for

registration of the trade mark 'WHIRLPOOL' for certain goods including

washing machines. The washing machines are being marketed by plaintiff

E No. 2 in India under the

TVS brand using the phrase 'in collaboration with

Whirlpool Corporation'. Prior user of the mark 'WHIRLPOOL' for such

goods

is claimed by the plaintiffs. The plaintiff allege that in July, 1994 they

came across an advertisement of defendants soliciting dealers for 'WHIRLPOOL' washing machines. In short, this is the basis on which the

F plaintiffs claim to restrain the defendants from using the mark

'WHIRLPOOL' for the goods manufactured by the defendants.

On the other hand, the defendants filed an application on 6.8.1986

with the Registrar for registration of the trade mark 'WHIRLPOOL'. On

16.10.1988 it was advertised in the trade mark journal. On 16.1.1989 plain-

G tiff No. 1 filed a notice of opposition. On 12.8.1992 the Registrar passed

an order dismissing the opposition and allowing the defendants' application

for registration on the ground of proposed user only. On 30.11.1992 the

registration certificate

was granted to the defendants to date back from

6.8.1987, the date of the application. Against the Registrar's order dated

H

12.~.1992 the plaintiff No. 1 has preferred an appeal on 7.11.1992 in the

N.R. DONGRE v. WHIRLPOOLCORPN. [.T.S. VERMA,J.] 375

Delhi High Court which is still pending. After grant of the certificate of A

registration to the defendants, on 4.8.1993 plaintiff No. 1 filed a petition in

the Delhi High Court under Sections 46 and 56 of the Trade and Marchan-

dise Marks Act,

1958 (for short the 'Act') for rectification by expunging

the registration granted to the defendants. That matter

is also pending in

the High Court. The present suit was then filed on 4.8.1994 for the reliefs B

indicated earlier.

The learned

Single Judge, by order dated 31.10.1994, granted a

temporary injunction in favour of the plaintiffs as under :

"For all the foregoing reasons IA 7657/94 is allowed. The defen- C

dants, their partners, trustees, agents, representatives and assig­

nees are hereby restrained from manufacturing, selling, advertising

or in any

way using the trade mark

'WHIRLPOOL' or any other

trade mark deceptively or confusingly similar to the trade mark

Whirlpool

in respect of their goods. The plaintiffs shall within 4 D

weeks from today place on record an undertaking in the place on

record an undertaking in the shape of affidavits sworn

in by their

' duly constituted attorney/s or representative/s undertaking to in-

demnify the defendants from any loss or damage which the defen­

dants may incur on account of these proceedings and determined

in this suit or any other duly constituted legal proceedings in the

E

event of the plaintiffs being held not entitled to the relief sought

for in the suit.

By way of abundant caution I would like to clarify :

(i) As stated in the earlier part of this order the defendants have

filed only a short counter for paucity of time. Legal contentions

have

all been raised by either party and dealt with by this order.

F

If the defendants bring forth any new material consisting of facts

documents and evidence which they could not do earlier they shall

have the liberty of moving an application under

Order 39 Rule 4 G

CPC.

(ii) that nothing said hereinabove, shall prejudice in any manner

the rights of either party to have their please determined on merits

after a full-fledged trial.

H

A

B

376 SUPREME COURT REPORTS (1996] SUPP. 5 S.C.R.

October 31, 1994 R.C. LAHOTI, J."

On Appeal, the Division Bench of the High Court came to the conclusion

that there was

no reason to interfere with the discretion exercised by the

learned

Single Judge in granting the temporary injunction. Accordingly, the

defendants' appeal was dismissed.

The question now

is : whether there is any cogent ground to interfere

in this appeal with the exercise of discretion by the trial court?

We must indicate at this stage that interference in this appeal would

C be called for only if we reach the conclusion that the exercise of discretion

in favour of the plaintiffs is contrary to the settled principles for the grant

of a temporary injunction or that it

is arbitrary or perverse. In Wander Ltd.

&

Am: v. Antox India P. Ltd., [1990] Supp. S.C.C. 727, the factors to be

considered for grant of

an interlocutory injunction in a passing off action

D and the scope of interference by appellate court with the exercise of

discretion of court of first instance, were summarised and reiterated as

under:

E

F

G

H

" ..... In such appeals, the appellate court will not interfere with the

exercise of discretion of the court of first instance and substitute

its own discretion except where the discretion has been shown to

have been exercised arbitrarily, or capriciously or perversely or

where the court had ignored the settled principles of law regulating

grant or refusal of interlocutory injunctions.

An appeal against

exercise

of discretion is said to be an appeal on

plinciple. Appellate

cowt will not reassess the matedal and seek to reach· conclusion

different from the one reached by the court below

if the one reached

by that court was reasonably possible

on the material. The appellate

court would normally not be justified in interfering with the

exer­

cise of discretion under appeal solely on the ground that if it had

considered the matter at the trial stage it would have come to a

contrary conclusion.

If the discretion has been exercised by the trial

court reasonably

and in a Judicial manner the fact that the appellate

court would have taken a different view

may not justify

inteifere11ce

with the trial court's exercise of discretion. After referring to these

principles Gajendragadkar,

J. in Printers (Mysore) Private Ltd. v. Pothan Joseph, (1960) 3 S.C.R. 713 at 721.

N.R. DONGRE v. WHlRLPOOLCORPN. (J.S. VERMA,J.] 377

" ...... These principles are well established, but as has been observed A

by Viscount Simo11 i11 Charles Osenton & Co. v. Jha11ato11 ' ..... the

law as to the reversal by a court of appeal of an order made by a

judge below in the exercise of his discretion

is well established,

and

any difficulty that arises is due only to the application of well

settled principles in an individual case'. B

xxx xxx xxx

An infringement action is available where there is violation of

specific property right acquired under and recognised

by the

statute. In a passing-off action, however, the

plaintiffs right is C

independent of such a statutory right to a trade mark and is against

the conduct of the defendant which leads to or

is intended or

calculated to lead to deception

Passing-off is said to be a species

of

u11f air trade competition or of actionable unfair trading by which

one person, through deception, attempts to obtain a11 eco11omic D

be11efit of the reputatio11 which another has established for himself

in a panicular trade or business. 17ie action is regarded as an action

for deceit. The tort of passing-off involves a mi&representation

made

by the trader to his prospective customers calculated to

injure, as a reasonably foreseeable consequence, the business or

goodwill of another which actually or probably, causes damages to

E

the

busin'.ess or good of the other trader. .... ".

(pages 733-734)

(Emphasis supplied)

We

may now indicate some of the findings recorded by the learned

Single Judge which have not been disturbed by the Division Bem:h. The

learned Singh Judge, on appreciation of the material relevant at this stage,

reached the following conclusions, namely, :

F

"It cannot be denied that in so far as "Whirlpool'' is concerned, G

plaintiff No. 1 has been the first in point of time to be in the market,

the question of exact geographical reasons apart. The defendants'

earliest claim to user commences in July/August,

1986, the

date of

their application for registration, though this claim

is seriously

disputed by the plaintiffs. H

378

A

B

c

D

E

F

G

H

SUPREME COURT REPORTS [1996] SUPP. 5 S.C.R.

xxx xxx xxx

Whirlpool has been frequently advertised and has featured m

international magazines having circulation in India.

xxx xxx xxx

Though the pleadings, documents

and affidavits filed by the plain­

tiffs positively make out a case

of

actual sales by the plaintiffs of

Whirlpool products including washing machines in a number of

geographical regions arou.nd the would, in so far as India

is

concerned, the plaintiffs No. l does. not make out a case of actual sales in the markets in India. The plaintiff No. 1 has made limited

sales to US Embassy and US ATO in India. However, the prochicts

have been advertised in magazines having international circulation

including in India.

xxx xxx xxx

As already noticed plaintiff No. 1 was a registered proprietor of

the trade mark

Whirlpool in India until 1977. Without expressing

any opimon on the validity or otherwise of the reasons !issigned by

the plaintiffs for non renewal of the registration thereafter suffice

it to say that inspite of non-registration of the trade mark in India,

the plaintiff was trading in Whirlpool products in several parts of

the world and also sending the same to India though in a limited

circle. Whirlpool associated with the plaintiff No. 1 was gaining

reputation throughout the would. The reputation was traveling

trans-border to India as well through commercial publicity made

in magazines which are available in

or brought in India. These

magazines do have a circulation in the higher and upper middle

Income strata

of Indian society. Washing machine is a household

appliance used by the middle and upper class of the society.

xxx xxx xxx

The plaintiff No. 1 is not one whose trading activities are confmed

to India

alone. It claims to have a worldwide trade. It did have

registration of the trade mark in India. Non-renewal

of the trade

mark

is assigned by the plaintiff to causes like import restrictions

and foreign trade policy of the Govt. of India.

One of the causes

, .

N.R.DONGREv. WHIRLPOOLCORPN.[J.S.VERMA,J.] 379

assigned is a communication gap between the plaintiff No. 1 and A

its trade mark attorney. The production of the goods was not

stopped.

May be in a limited section of the society but the goods

were being marketed and they were being sent

to India, inspite of

non-registration of trade mark here

in India. They were being

exhibited and continuously advertised in such circumstances that

B

an inferences as to abandonment of the trade mark by the plaintiff

No. 1 cannot be drawn.

In

1986, the defendant initiated proceedings for registration of

Whirlpool trademark

so as to own the same. Opposition was

offered by the plaint;ff No. 1. The matter has been contested C

throughout till the date of decision by the Assistant Registrar of

Trade Mark. Having lost there at the plaintiffs have preferred an

appeal which

is pending. There is no question of acquiescence by

the plaintiffs.

xxx xxx xxx

D

For the present the defendants have not adduced any documentary

I

evidence of their having marketed their washing machines enabling '

a finding on the length of time. and the extent to which they have

marketed if at all their such products. The Asstt. Registrar of the ' E

trade mark has also not recorded any finding in favour of the

defendants as to the actual user by them of the trade mark

Whirlpool.

The findings of the Assistant Registrar quoted

hereinabove show his having formed an opinion that the proposed

use in future could entitle the defendants for registration. Having

p

lost before the AssistaniRegistrar the plaintiffs have preferred an

appeal and also filed this suit. The plaintiffs cannot justifiably

be

accused of culpable delay, acquiescence and !aches or

abandon­

ment so as to disentitle them from the relief of injunction.

xxx xxx xxx

The learned counsel for the plaintiffs have rightly contended that

in the absence of grant of injunction they are likely to suffer

irreparable injury.

It is submitted that the washing machines which

G

are being manufactured by the defendants are not of the same H

380

A

B

c

SUPREME COURT REPORTS (1996] SUPP. 5 S.C.R.

engineering standards and do not give the same quality of perfor­

mance

as

tke plaintiffs' machines do and so the marketing of the

washing machines with WHIRLPOOL trade mark is sure to

damage irreparably the reputation and goodwill of the plaintiffs.

It has rightly been pointed out that the defendants are not going

to suffer any injury inasmuch

as even if they have manufactured

any washing machines, they have only to remove and replace

the·

small metallic strip bearing the offensive trade mark/name which,

includes Whirlpool. The plaintiffs do not have any objection to the

defendants manufacturing and offering for sale washing machines

in the trade mark/name .Jf USHASHRIRAM or LEXUS or any

other name at the choice of the defendants so long as the trade

mark/name adopted

by the defendants is not the same or similar

or deceptively similar to that of the plaintiffs.

xxx xxx xxx

D this Court has formed an opinion that the registration of the

WHIRLPOOL as trade m.ark of the defendants was of no conse­

quence in passing off action. This order too would not have any

effect on the registration proceecfuigi, sub judice i.Ja appeal which

shall

be decided on its

own merits."

E

F

G

H

The Di\'Won Bench wNle dismismg th.e defendants' appeal, stated

thus:

"From the aforesaid facts including the extensive advertise­

ments of the goods

of the first respondent & its trade mark 'WHIRLPOOL' and the legal position adumberated hitherto we

are prima facie of the opinion that the trade mark 'WHIRLPOOL'

has acquired reputation and goodwill in this country and the same

has become associated in the minds of the public or potential

buyers with the goods

of the first respondent. Even advertisement

of trade mark without

existence of goods in the market is also to

be considered as use of the trade mark. It is also not necessary

however that the association of the plaintiff's marks with his goocli

should be known all over the country or to every person in the

area wltcre it is known best,. (See : Faulder & Co. Ltd. v. 0 & G.

Rumton, (1903) 20 RFC 4TI). Besides the facts prima facie

deOM>AWatc thd: th.e fisst r-«ipoadent was pnor user of the trade

"

N.R.DONGREv. WHIRLPOOLCORPN.[J.S. VERMA,J.) 381

mark 'WHIRLPOOL' as it was vsing the same since 1941, while A

the appellants themselves claim the adoption thereof from 1886.

Thus, we see no reason. to differ with the finding of the learned

Single Judge that the first respondent acquired transborder reputa­

tion in respect of the trade mark 'WHIRLPOOL' and has a right

to protect the invasion thereof.

B

xxx xxx xxx

The concept and principle on which passing off action is

grounded is that a man

is not to sell his own goods under the C

pretence that they are the goods of another man. A trader needs

protection of his right of prior user

of a trade mark as the benefit

of the name

and reputation earned by him cannot be taken

ad­

vantage of by another trader by copying the mark and getting it

registered before he could get the same registered in his favour.

We see no reason

why a registered owner of a trade mark should D

be allowed

to· deceive purchasers into the belief that they. are

getting the goods of another while they would be buying the goods

-of the former which they never irttended to do. In an action for

passing off if should not matter whether misrepresentation or

deception has proceeded from a registered or an unregistered user E

of a trade mark. He cannot represent his own goods as the goods

of some

body else.

· ·

xxx

Applying this principle & the reasons already stated we have F

prim a f acie come to the conclusion that the appellants have ac­

quired reputation & goodwill in respect of its goods bearing trade

mark

'WHIRLPOOL' in

this country. Ew:n though the appellants

have no connection with the respondents, they are using the mark

'WHIRLPOOL' for tbcir products. Prima fade it appears to us

that buyers arc likely to be dcceMd or confused as to the origin G

and somce of the goods. 'I'hc:y \'till believe that the product is

I

~ufactured by the respondents, an impression not founded in

truth. The limitation will pass of as genuine. No one can be

permitted· to trade by ~ oi ~ ti= p3rdu::sms or

to unauthori:edly dM:rt to· itself the rcp::tctim t:nd ·goodWJ· af H

382

A

B

c

SUPREME COURT REPORTS (1996) SUPP. 5 S.C.R.

others. Under section 27(2) an action for passing off against

registered user of trade mark

is maintainable at the instance of a

prior user of the same, similar or identical mark.

Since such a

remedy

is available against the registered user of a trade mark, an

interim injunction restraining him to use the mark can also be

granted to make the remedy effective.

We also do not agree with the submission of learned counsel

for the appellants that the respondents are guilty of culpable delay;

acquiescence and !aches which disentitle the respondents from

claiming the relief of Injunction.

xxx xxx xxx

There is no plausible & convincing explanation by the appel­

lants

as to how they came to adopt the mark

'WHIRLPOOL'. In

absence of any satisfactory explanation

by the appellants, the

D adoption of the mark by them cannot

plima f acie be regarded as

honest and plea of delay & !aches would be of no avail to them.

As regards acquiescences, there

is nothing to show that there has

been a tacit or express assent

by the respondents to the appellant's

using the mark. As regards the submission of learned counsel for

E the appellants that the respondents had abandoned the trade mark

'WHIRLPOOL' and therefore, they cannot maintain the action of

passing

off, is not well founded. As already seen, the respondents

had been using the trade mark

'WHIRLPOOL' world wide and

there

is no reason to assume that the same was abandoned. Mere

fact that the registration

was not renewed by them in India after

F 1977, is no ground to hold that the respondents had abandoned

the trade mark.

G

xxx xxx xxx

Having regard to the

abQve discussion, we see no reason to

interfere with the discretionary order passed by the learned Single

Judge dated October 31, 1994 granting the restraint order ....... "

An attempt was made at the hearing before us by the appellants to

place reliance on some additional material produced at this stage. It is

H sufficient to observe that this appeal has to be decided on the basis of

N.R. DONGRE v. WHIRLPOOLCORPN. [J.S. VERMA,J.] 383

material produced in the trial court. We may add that the trial court itself A

has referred to Order 39, Rule 4 CPC granting liberty to move an applica-

tion thereunder, if there be any significant additional material available to

invoke the jurisdiction of the trial court for the discharge or variation of

the order of temporary injunction. We may

addthat the additional material

produced at this stage

is also not sufficient to swing the balance in the other

direction.

·

Shri Kapil Sibal, learned counsel for the appellants conceded fairly

B

at the outset that a passing off action is maintainable in law even against a

registered owner of the trade mark and, therefore, the fact that the

defendants have obtained a registration (subject to the outcome of a

C

pending appeal) is by itself not sufficient to render the suit not main­

tainable. However, he qualified this statement

by adding that the existing

registration to favour of the defendants

is a significant fact in favour of the

defendants even at the interlocutory stage in the suit for deciding whether

a temporary injunction should be granted against the defendants. The other

factors on which

Shri Sibal relied are : D

(i) Plaintiffs filed an opposition to the defendants' application for

registration before the Registrar which was rejected, even though

their appeal

is pending;

(ii) A separate application date 4.8.1993 for rectification under

Sections

46 and 56 of the Act has been filed by the plaintiffs, which

too

is pending in the High Court;

(iii) Plaintiffs had registration of trade mark

'WHIRLPOOL' in

India from 1956-57 which was allowed to lapse in 1977;

(iv) a fresh application for registration of the trade mark has been

made by the plaintiffs only in

1988, which is pending; and

(v) Filing of the suit thereafter on 4.8.1994, in this background is

E

F

delayed. G

Shri Sibal also submitted that the defendants are manufacturing and

selling washing machines which cost less than 1/3rd the price of the

plaintiffs' washing machine; and the full description given on the plate

affixed to the defendants' washing machine leaves no room for any con­

fusion in the mind of the buyer that the defendants' machine

is goods H

384 SUPREME COURT REPORTS (1996] SUPP. 5 S.C.R.

A associated with plaintiffs. Shri Sibal submitted that an overall view of all

these factors negatives the existence of a

p1ima f acie

case for grant of a

temporary injunction

in favour of the plaintiff.

Shri Sibal also submitted

that the washing machines marketed in India

by the plaintiffs are sold by

the joint venture with

TVS and not by the plaintiff No. 1 -Whirlpool

B Corporation itself.

In reply, shri Soli J. Sorabjee, learned counsel for the respondents,

contended that the defendants were earlier doing their business in the

name of USHA-SHRIRAM, USHA-LEXUS and there is no explanation

by them for this switch over which reveals their intent to derive unfair

C advantage of the established name of 'Whirlpool' associated with plaintiff

No.

1 because

ot prior user, which is sufficient to support a passing off

action. Shri Sorabjee also submitted that actual sales by the plaintiffs of

washing machines

in the name of 'Whirlpool' in India is not necessary while

in the case of the defendants, actual user of that name

by them and not

the fact of registration of that mark

is material.

Shri Sorabjee relied on the

D finding of the trial court that actual sales of washing machines using the

mark 'Whirlpool'

by defendants prior to 1994 is not shown at this stage;

and grant of registration to defendants

is only on the ground of proposed

and not actual user.

Shri Sorabjee also referred to the affidavit of the

defendants filed in the High Court disclosing their actual sales and existing

E stock which reveals that the business was more in names other than

'Whil'lpool' Shri Sorabjee finally submitted that an appeal Court is not to

interfere ordinarily with the exercise of discretion by the trial court in

gr~ing a temporary injunction and this is more so when the discretion

exercised by the trial court has been affirmed

in the first appeal.

F

G

The findings of the learned

Single Judge, as affirmed on appeal by

the Division Bench, are :

(i) Long prior user of the name of 'WHIRLPOOL' by plaint'iff No.

1 and a transborder reputation and goodwill extending to India to

the use of that name;

(ii) Prior registration of that name even

in India from 1956-57 to

1977 against the earliest claim by the defendants from 1986 (the

date

of application for

registration);

H (iii) Grant of registration to the defendants Oil 12.8.19CJ2, only on

•

N.R.DONGREv. WHIRLPOOLCORPN.[J.S.VERMA,J.) 385

the ground of proposed user instead of actual user, which was A

opposed by the plaintiffs and is subject to the outcome in the

pending appeal;

(iv) No reliable evidence of the defendants having marketed their

washing machines for any considerable length

of time prior to grant

of the interlocutory injunction; B

(v) Irreparable injury to the plaintiffs' reputation and goodwill with

whom the name

of

'WHIRLPOOL' is associated, because of the

washing machines

of the defendants not being of the same standard

and quality of performance as the plaintiffs' machines; C

(vi)

On the other hand, no injury to the defendants by grant of the

injunction inasmuch as the defendants' washing machines can

be

sold under the other names used earlier, with the

removal and

replacem!'!nt only of the small metallic strip which bears the offen-

sive

trade mark/name which includes

'WHIRLPOOL'; and D

(vii) There is no justification to accuse the plaintiffs of culpable

delay, acquiescence and !aches

or abandonment so as to disentitle

them from the relief

of injunction.

It has also been held that there is no

planible explanation offered by the E

defendants for recently adopting ~he mark 'WHIRLPOOL' when business

in washing machines was being carried out earlier in other names, which

at this stage, is supportive of the plea of unfair trading activity in an attempt

to obtain economic benefit of the reputation established by the plaintiff No.

1 whose name is associated with the mark 'WHIRLPOOL'. The plaintiffs' F

conduct in opposing the defendants' application for registration as soon as

it was notified and persisting in the opposition by filing an appeal against

the Registrar's order and then an application for rectification of the entry

in the r~ter on grant of the certificate and also filing the suit wit.bout

delay is referred by the trial court as sufficient to suggest that there was G

no abandonment of the mark, acquiescence or !aches by the plaintiffs.

In our opinion, the above concurrent findings, on which the grant of

interlocutory injunction in favour of the plaintiffs is based is, to say the

least, a reasonable conclusion on the relevant material available at this

stage. It is not for this court at the stage of second apPeal to reassess the H

386 SUPREME COURT REPORTS (1996] SUPP. 5 S.C.R.

A material and reach an independent conclusion thereon for the first time

and it has only to be seen whether the conclusion reached

by the trial court

was reasonably possible

on the material. Moreover, even on a reassessment,

it appears to us that the conclusion reached by the trial court in favour of

the plaintiffs

is the one more probable and reasonable on this material.

B

c

The question now is : whether the exercise of discretion by the trial

court

is favour of the plaintiffs to grant the interlocutory injunction is in

accordance with the settled principles of law regulating grant of inter­

locutory injunctions or not? We think it

is so.

Injunction

is a relief in equity and is based on equitable principles.

On the above concurrent findings, the weight of equity at this stage is in

favour of the plaintiffs and against the defendants. It has also to be borne

in mind that a mark in the form of a word which is not a derivative of the

product, points to the source of the product. The mark/name

D 'WHIRLPOOL' is associated for long, much prior to the defendants'

application in

1986 with the Whirlpool Corporation -plaintiff No. 1. In

view of the prior user of the mark by plaintiff No. 1 and its trans-border

reputation extending to India, the trade mark

'WHIRLPOOL' gives an

indication of the origin of the goods

as emanating from or relating to the

Whirlpool Corporation -plaintiff No.

1. The High Court has recorded its

E

satisfaction that use of the

'WHIRLPOOL' mark by the defendants indi-

cates

prima facie an intention to pass-off defendants' washing machines as

those of plaintiffs' or atleast the likelihood of the buyers being confused or

misled into that belief. The fact that the cost of defendants' washing

machine

is l/3rd of the cost of the plaintiffs' washing machine as stated by

F

Shri Sibal, itself supports the plaintiffs' plea that the defendants' washing

machines are not of the same engineering standard and are inferior

in

quality to the washing machines of the plaintiffs'. In addition, it has been

rightly held that the grant of interlocutory injunction would cause no

significant injury to the defendants who can sell their washing machines

merely

by removing

tht, small metallic strip bearing the offensive trade

G mark/name which includes 'WHIRLPOOL'. On the other hand, refusal of

the interlocutory injunction would cause irreparable injury to the plaintiffs'

reputation and goodwill since the trade mark/name 'WHIRLPOOL' is

associated for long because of prior user and even otherwise with the

plaintiff

No. 1 -Whirlpool C9rporation. These factors which have been

H relied on for grant of the interlocutory injunction by the trial court indicate

N.R. DONGRE v. WHIRLPOOLCORPN. [J.S. VERMA,J.] 387

that the exercise of discretion was in accordance with the settled principles A

of law relating to the grant of interlocutory injunctions in a passing-off

action. The affirmance of the trial court's order by the Division Bench on

an appeal reinforces the trial court's

view.

Applying the settled rule indicating the scope of interference in an

appeal against exercise of discretion

by the trial court to grant an inter­

locutory injunction,

we find no ground to take a different view or to

interfere with the grant of the injunction.

B

On the above conclusion reached on the facts of this case, it is

unnecessary to refer to the several decisions cited at the bar to indicate the C

settled principles of law regulating grant or refusal of interlocutory injunc­

tions and the scope for grant of such an injunction in a passing-off action

even against the proprietor of a registered trade mark. None of those

decisions

lays down that in a passing-off action based on the right in

common law distinct from the statutory right based on a registered mark,

an injunction cannot be granted even against an owner of the trade mark

D

in an appropriate case. It is for this reason, Shri Kapil Sibal fairly conceded

this position at the outset and relied on the fact of registration in favour

of the defendants only for the limited purpose indicated earlier. The

surviving controversy at this stage was confined only to the legality and

propriety of an interlocutory injunction granted on the facts of this case. E

It cannot be seriously disputed that on the findings recorded by the

trial court and affirmed on appeal

by the Division Bench which appear to

us

as reasonable conclusion on the relevant material, grant of an inter­

locutory injunction

is the appropriate order to make and the proper

exercise of discretion

by the trial court. The decision of this court in F

Wander Ltd. & Anr. v. Antox India

P. Ltd. (supra) is alone sufficient to

support this

view. We may add that the trial court has taken care to protect

the defendants' interest at the interlocutory stage during the trial of the

suit in the language used for grant of the interlocutory injunction reserving

liberty to apply for its discharge or variation if additional material or

G

subsequent events justify such a course. This appeal must, therefore, fail.

Consequently, the appeal is dismissed with costs Rs.

10,000.

v.s.s. Appeal dismissed.