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CASE NO.:

Appeal (civil) 8815-8816 of 2003

PETITIONER:

Ramdev Food Products Pvt. Ltd.

RESPONDENT:

Arvindbhai Rambhai Patel & Ors.

DATE OF JUDGMENT: 29/08/2006

BENCH:

S.B. Sinha & P.P. Naolekar

JUDGMENT:

J U D G M E N T

W I T H

CIVIL APPEAL NO.8817 OF 2003

S.B.SINHA, J :

Interpretation of the provisions of the Trade and Merchandise Marks

Act, 1958 (for short "the 1958 Act") arises for consideration in these

appeals arising out of a judgment and order dated 08.05.2003 passed by the

High Court of Gujarat at Ahmedabad.

FACTS

The appellant is a company incorporated under the Companies Act,

1956. The other parties to these appeals were/are its Directors.

In the year 1965, one Rambhai Patel started a business of grinding

and selling spices under the name and style of 'Ramdev'. He had three

sons and two daughters, Arvindbhai, Hasmukhbhai and Pravinbhai were his

sons. A partnership firm was constituted in the year 1975. It applied for

registration of the trademark 'Ramdev', which was granted on 03.01.1986

being Trademark No.447700. Another partnership deed was executed in

supersession of the earlier partnership deed wherein new partners were

inducted. On 06.01.1989, the appellant company was incorporated

whereby and whereunder the pattern of shareholding amongst the three

brothers was : Arvindbhai Group (40%); Hasmukhbhai Group (30%); and

Pravinbhai Group (30%). The registered trademark was assigned by

'Ramdev Masala Stores' in favour of the appellant by a deed dated

20.05.1990. However, by the said deed the goodwill was not assigned. The

trademark together with the goodwill was assigned in favour of the

appellant company by another deed of assignment dated 20.05.1992. A

'user' agreement was also entered into by the same parties permitting the

firm 'M/s. Ramdev Masala Stores' to use the said trademark subject to the

terms and conditions stipulated therein. Another partnership firm being

'Ramdev Masala' was started on 01.04.1991 for carrying on the trade of

grinding and trading of masalas. A user agreement was also entered into

by and between the appellant company and the said firm permitting the

latter to use the registered trade mark for seven years i.e. from 01.04.1991

to 31.03.1998 in terms whereof it was stipulated :

"3. AND WHEREAS the User is a firm

registered under the Indian Partnership Act and

wishes to use in the city of Ahmedabad except the

area of Naroda City of Ahmedabad and district

Mehsana, Gujarat State (India) registered

proprietors aforesaid registered Trade Mark

(hereinafter referred to as "the said Trade Mark")

in respect of the said goods."User restricted to the

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cities of Ahmedabad and Mehsana;

4(C) That the User will continue to use the said

mark only so long as he manufactures his goods in

accordance with the terms and specifications

devised by the Registered Proprietor.

4(E) That within the terms of this agreement and

thereafter the User will not acquire any right to the

said mark by any means whatsoever except in

accordance with law.

4(G) That the User covenants not to use the said

Trade Mark in the advertisement, journal label

and/ or other documents in such a manner that the

said Trade Mark may in any way be diluted in

respect of distinctiveness of validity if necessary

and indication either usually, phonetically may be

given to the purchasing public to the extent that the

User uses the said mark by way of permitted use

only."

Indisputably, the firm 'Ramdev Masala Stores' was dissolved on

04.11.1991. Yet again a new partnership firm came into being under the

name and style of 'Ramdev Exports'. The said partnership firm was

constituted for the purpose of export of spices manufactured by the

appellant company.

It is not in dispute that the business of manufacturing and selling of

spices under the trade name of 'Ramdev' was being run by the three

brothers through the appellant company.

Another partnership firm being 'Ramdev Masala' was being run

through seven outlets for retail sale of the products of the Company.

It is also not in dispute that both the firms 'Ramdev Masala' and

'Ramdev Exports' had distinct and separate existence. Their areas of

operation were also different. The respective roles assigned to each of the

partnership firm had clearly been specified in their respective partnership

deeds. Whereas M/s. Ramdev Masala was allowed to manufacture and

trade in spices, the business of M/s. Ramdev Exports was limited to export

of the spices manufactured by the appellant company. Yet again, the

partnership deed of Ramdev Masala was amended on 01.04.1995; in terms

whereof the business of the said firm was confined only to trading in spices

manufactured by the appellant company. In other words, the respective

businesses under the partnership deeds of the said firms are stated to be as

under :

a. Type of business of Ramdev Masala under the first partnership deed

was grinding and selling of spices.

b. Type of business of M/s. Ramdev Masala under the second

partnership deed was trading in spices.

c. The business of M/s. Ramdev Exports was exporting the goods

manufactured by the appellant company.

DISPUTES

Disputes and differences having arisen between the members of the

family and in particular between the three brothers, the same was settled by

their well-wishers, pursuant whereto and in furtherance whereof a

Memorandum of Understanding (MOU) was executed by and between the

parties, to which we would advert to a little later.

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LEGAL PROCEEDINGS

On the premise that the respondents had been infringing its rights,

trade name and logo, the appellant company filed a suit in the City Civil

Court, Ahmedabad, which was numbered as CS No.828 of 2000, inter alia,

for the following reliefs :

"A) The defendants by themselves, their

servants, agents, partners and all persons claiming

through or under them be restrained by a perpetual

order of this Hon'ble Court from, in any manner,

using the trade mark 'RAMDEV' in their label,

packing materials, advertising materials, business

materials etc., in respect of goods which are

covered under registration of the plaintiff's mark

and/or any mark which may be identical and/or

deceptively similar to the plaintiff's registered

trade mark and thereby restrain them from

infringing the plaintiff's registered trade mark

bearing No. 447700 and other marks bearing

No.531084, 531085, 545253, 545253, 545255,

545257 and 545258."

An application for injunction was also filed wherein the following

interim prayers were made :

"(A) The defendants by themselves, their

servants, agents, partners and all persons claiming

through or under them be restrained by an order of

temporary injunction of this Hon'ble Court from,

in any manner, using the trademark 'RAMDEV' in

their label, packing materials, advertising

materials, business materials etc. in respect of

goods which are covered under registration of the

plaintiff's mark and/or any mark which may be

identical and/or deceptively similar to the

plaintiff's registered trade mark and thereby

restrain them from infringing the plaintiff's

registered trade mark bearing No.447700 and other

marks bearing No.531084, 531085, 545253,

545255. 545257 and 545258, till the hearing and

final disposal of the suit.

(B) The defendants by themselves, their

servants, agents, partners and all persons claiming

through or under them be restrained by an order of

temporary injunction of this Hon'ble Court from

using in relation to any spices, masala bearing the

name 'RAMDEV' as produced with separate list

or any label or packing material or advertising

material containing the trade mark 'RAMDEV'

and/or any mark which is identical and/or mark

containing word 'RAMDEV' either on label or in

trading style or trading name, so as to pass off the

defendants goods and/or business as that of the

plaintiff, till the hearing and final disposal of the

suit."

An application was also filed for appointment of a Court

Commissioner.

DEFENCES OF THE RESPONDENTS

The principal defences raised by the respondents in the said suit are

as under:

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(i) The appellant has no exclusive statutory right to use 'Ramdev'

apart from the label as a whole. (Sections 15 and 17 issue)

(ii) The first respondent has a right to use the mark as concurrent

user; (Section 29 issue)

(iii) That the use complained of is protected, as bona fide user and

furthermore the appellant is not entitled to the reliefs sought for as

the same were barred under the principles of estoppel,

acquiescence, etc.

ORDER ON THE APPLICATION FOR INJUNCTION

By a judgment and order dated 17.03.2000, the learned Trial Judge

opined that the plaintiff company was the owner of the trademark. It was

further held that the defendants had started manufacturing and marketing

the same business which is deceptively similar to the trademark of the

plaintiff which created confusion in the mind of public. However, the

defendants were given liberty to manufacture spices in their factory and sell

the same in seven outlets under the trademark 'Ramdev Masala'.

On an interpretation of the said MOU dated 30.05.1998, it was, inter

alia, held :

"\005Therefore, if there is agreement between the

parties that the defendant No.1 should purchase

spices from the plaintiff for the purpose of retail-

sale in 7 outlets, it must have been mentioned in

the MOU. No such condition is mentioned. If that

be so, it cannot be presumed that the defendants

should purchase spices from the plaintiff for the

purpose of retail-sale in 7 outlets. In case of

written-agreement between the parties, it should be

taken as it is. It should be read as it is. No

additional terms and conditions or agreement can

be presumed. Therefore, in absence of any

specific condition that the defendants should sell

spices by using trade-mark "Ramdev" in 7 outlets

by purchasing the goods from the plaintiff is not

believable.

13. This condition also does not seem to be

possible\005

14. \005The defendants have arranged for the

packing material bearing regd. trade-mark

"Ramdev" and used the same for the purpose of

retail business. These facts clearly suggest that

there was no restriction on the defendants to

purchase spices from the plaintiff for the purpose

of retail business in 7 outlets. On the contrary, the

defendant was at liberty to manufacture in their

factory and sell the same in 7 outlets for the

purpose of retail business.

15. Relevant portion of MOU is reproduced

earlier. Accordingly, the defendants are permitted

to use the trade-mark or logo "Ramdev" for the

purpose of retail-sale in 7 outlets. The words used

suggest that the defendants were entitled to use the

trade-mark "Ramdev" without any restriction for

the purpose of retail sale of spices. It was not

compulsory on the part of the defendants to

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purchase spices from the plaintiff. They can

arrange or manufacture in their way and sell the

same in 7 retail outlets under the trade-mark

"Ramdev".

21. \005Therefore, he cannot sell spices in other

shops under the trade-mark "Ramdev". He can run

spices' business and other business in his shop

Ramdev Masala. The plaintiff cannot restrict

him."

The respondents had been selling a large variety of spices under the

trade name "Swad". However, the packings and labels adopted by them

were also held to be deceptively similar to the trade-mark "Ramdev" of the

appellant. Although they had been manufacturing and marketing spices

under the trade name 'swad', the respondents had been writing the words

"Ramdev Masala" in such a manner that it creates confusion in the minds

of customers. It was, therefore, opined that the respondents had been

passing off their goods as if it was manufactured by the appellant. The

learned Judge, however, opined that as per the provisions of the Prevention

of Food Adulteration Act, 1955, it was mandatory to disclose the name and

address of the manufacturer they have been writing their name "Ramdev

Masala" as manufacturer which does not create any deception or confusion.

Noticing that the appellant got it entered in the records of the Registrar of

Trade Mark by following due procedure and acknowledging that the

appellant company is the registered proprietor of trade name bearing logo

of "Ramdev", it was held that as the respondents had started manufacturing

and marketing spices under the trade name "swad" and they had been

selling spices in small packets and in view of the averments made by the

appellant that the labels and packings adopted by the respondents were

deceptively similar to the registered trademark 'Ramdev' and, therefore,

passing off goods as it is manufactured by the plaintiff. The learned Judge

further observed :

"\005Comparing the packing material and label of

both the parties, it is clear that the label of the

defendants is phonetically and visibly similar with

the label of the plaintiff. It is deceptively similar

with the label of the plaintiff. It creates deception

as well as confusion in the minds of customers

who are literate, illiterate, male or female, who

used to purchase in retail market from small shops

as well as big departmental stores. Therefore,

there is every likelihood of passing off the goods

of the defendants as if it is manufactured by the

plaintiff."

It was opined :

"As stated earlier, it is proved that the

plaintiff is the regd. proprietor of trade-mark

"Ramdev" bearing registration No.44770. The

plaintiff has acquired goodwill and reputation of

the trade mark "Ramdev Masala" in the market.

Packing and label adopted by the defendants for

their products "Swad" containing the word

"Ramdev Masala" on the front page of the label in

larger size, in first alphabet definitely creates

deception and confusion. It is deceptively similar

with the trade-mark of the plaintiff. Therefore, the

plaintiff has proved prima facie case on this point.

As regards the balance of convenience and

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irreparable injury, it is settled legal position that in

case of deception public at large is affected.

Unvaried customers are likely to be deceived.

When prima facie case is proved, it is necessary in

the interest of justice to maintain status quo.

Considering above all facts and circumstances,

injunction should be granted against the

defendants."

The learned Judge summarised his findings as under :

"Para 41\005 (i) The defendant No.1 and

consequently all defendants are entitled to

use trade mark "Ramdev" for the retail

business of spices in 7 outlets as mentioned

in M.O.U. It is not mandatory for the

defendants to purchase goods from the

plaintiff for retail sale in the said outlets.

The defendants are at liberty to manufacture

spices in their factory and carry on retail

business in 7 outlets by using trade-mark

"Ramdev" bearing registration No.44770.

(ii) The defendant No.1 is at liberty to run

business under the trade name "Ramdev

Masala" for retail and wholesale business of

spices, instant mix and other articles.

However, he should not use trade-mark

"Ramdev" except 7 outlets as mentioned in

M.O.U.

(iii) Label and packing adopted by the

defendants for their goods under the trade-

name "Swad" containing word "Ramdev

Masala" is creating infringement of the

trade-mark of the plaintiff as it is

deceptively similar. Therefore, the

defendants should be prevented in using the

word "Ramdev Masala" on their label and

packing in any manner. However, the

defendants are at liberty to manufacture and

market spices in any trade name without

using the word "Ramdev" or "Ramdev

Masala".

The respondents were, thus, restrained by temporary injunction from

using registered trademark, logo 'Ramdev' or any other trademark, which

is identical and deceptively similar to the trademark of the appellant in

respect of label and packing material of their goods except in seven outlets

mentioned in MOU till final disposal of the suit. They were held to be at

liberty to run business of spices under the trade name 'Ramdev Masala'

without using the registered trademark 'Ramdev Masala' except in seven

outlets.

HIGH COURT JUDGMENT

Both the parties preferred appeals thereagainst before the High

Court. The High Court by reason of its judgment opined:

(i) The chain of events goes to show that the business of grinding

spices by using the words "Ramdev" and "Masala" in the

formation of firm name continued all throughout and, thus, the

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respondents could be restrained from carrying on business of

manufacturing and selling of spices.

(ii) The respondents were permitted users in view of the registered

user agreement executed between the parties.

(iii) The effect of the MOU could not be wholly determined as the

deeds of retirement had not been produced.

(iv) Even if the MOU is kept out of consideration in view of the Rules

framed under Prevention of Food Adulteration Act and Standards

of Weights and Measures Act, the manufacturer is duty bound to

display its name and address in the manner, size and placement as

prescribed, on the packets. Thus, once a statute prescribes an

obligation on manufacturer and stipulates the minimum standards

of measurement, the manufacturer is bound to act in accordance

with law and cannot be restrained from complying with specific

statutory provisions.

It, while upholding the findings of the learned trial Judge contained

in paragraphs 41(i) and 41(ii); in respect of the directions contained in Para

41(iii), opined:

"42.3 However, finding in paragraph 41(iii) of the

impugned judgment requires to be modified. The

trial court was in error for the aforestated reasons

when it held that printing and publication of the

principal display panel was creating infringement

of trade mark as it was deceptively similar. The

defendants cannot be prevented from using the

words "Ramdev" and "Masala" on their label and

packing in light of the statutory requirements as

stated hereinbefore. However, the defendants shall

print the name of the manufacturer using only the

minimum standard prescribed, depending upon the

nature of the packing and the placement of the

principal display panel shall be only at the bottom

on the reverse side of the packing and the front

portion of the packing shall not carry any principal

display panel except for its own brand name

"SWAD".

SUBMISSIONS:

Mr. C.A. Sundaram and Mr. Ashok Desai, learned Senior Counsel

appearing on behalf of the appellant, in support of these appeals submitted :

(i) The appellant was entitled to an order of injunction in view of the

well-settled principles of law that in case of a registered trade

mark, the use thereof by any other person would constitute an

infringement thereof.

(ii) As there can be only one mark, one source and one proprietor and

in particular having regard to the public interest, it was

impermissible for the Trial Judge as also the High Court to allow

the respondents to use the registered trade mark of the appellant

either in the seven outlets or the goods manufactured by them

independently.

(iii) The trade mark 'Ramdev Masala' used by the respondents being

deceptively similar with that of the registered trade mark, the

same would interfere with the quality control product of the

appellant and, thus, an order of injunction as was prayed for

should have been passed.

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(iv) The learned Trial Judge as also the High Court misconstrued and

misinterpreted the provisions of the 1958 Act vis-`-vis Prevention

of Food Adulteration Act and Standards of Weights and Measures

Act, as in a case of such nature, a mandatory injunction could be

issued directing change of the corporate name of the respondent

No.1; as the appellant's right to protect its trade mark is absolute.

(v) By reason of the MOU, the respondents were only allowed to

carry on the existing trade and thereby the respondents were not

permitted to start manufacturing spices under the name and style

of 'Ramdev Masala' as would be evident from the fact that they

were only entitled to carry on retail business from the seven

outlets for the purpose of selling only the end products upon

printing the words "not for resale" which is a clear pointer to the

fact that merely a right to trade therefrom and not manufacture of

spices in the said name had been granted in terms thereof.

Mr. F.S. Nariman, learned Senior Counsel appearing on behalf of the

respondents, on the other hand, submitted:

(i) The appellant could exercise their right only for the purpose of

implementing the MOU which must be read with the deed of

retirement dated 1st June, 1998, the remedies under the Trade

Marks Act are not available against the respondents who were

members of the family.

(ii) The Company, although was not a party to the MOU, but having

been represented by the Directors therein must be held to be

bound thereby and the parties to the MOU having not filed any

special leave petition in their individual capacities, these appeals

are liable to be dismissed.

(iii) As a distinction exists between a lis based on infringement of a

registered trade mark and passing off, the principles which are

applicable for grant of injunction in an action for passing off are

applicable in the instant case.

(iv) The claim of the appellant to obtain an order of injunction is

clearly barred by Sections 15(1) and 15(2) of the 1958 Act insofar

as a distinctive label having been registered as a whole, no order

can be passed restraining the defendants from using a part thereof,

as has been held in The Registrar of Trade Marks v. Ashok

Chandra Rakhit Ltd. [(1955) 2 SCR 252] and Re Cadbury

Brothers' Application [1915 (2) Ch. 307].

(v) The appellant itself having applied for 'Ramdev' as a separate

trade mark as would appear from a public document, viz., the

Trade Mark Journal No. 6 dated 25.11.2003 and the said trade

mark having not yet been registered in its favour, no order of

injunction as had been prayed for can be passed in its favour.

(vi) In any event, if an order of injunction is passed, against the

respondents, they would have to be completely dependent upon

the appellant for carrying on business which would lead to

discord between the members of the family, which was sought to

be avoided by the MOU.

(vii) In view of the stipulations made in the MOU whereby and

whereunder Shri Arvindbhai became the absolute owner of both

'Ramdev Exports' and 'Ramdev Masala' and Hasmukhbhai and

Pravinbhai haing given up their right thereupon, the First

respondent is entitled to carry on the said business in those names

which were not required to be changed by reason of the said

MOU.

(viii) Furthermore, the stipulations made in the MOU clearly do not

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oblige the respondent to buy any product from the appellant-

Company, and in the event, if it be held that the respondent is

bound to sell only the products of the appellant, running of

business by the respondent would clearly depend upon the supply

of the materials by the appellant alone.

(ix) As by reason of the said MOU, the respondent No.1 became

entitled to use of mark from seven outlets, the same envisages its

right to sell goods having the said mark and not sell of the

plaintiffs' goods alone. The MOU must be interpreted in the light

of the deed of retirement dated 1.6.1998, which categorically

contained a stipulation that the continuing partner "have also

decided to continue the said business in the same firm names,

viz., 'Ramdev Exports' and 'M/s. Ramdev Masala'" and, thus, the

appellant cannot now turn round and contend that the respondent

cannot carry on business of grinding and selling masala.

(x) In the event the appellant's contention is accepted, the right of the

respondent to continue the business under the name and style of

or in the firm name of 'M/s. Ramdev Masala' and 'Ramdev

Exports' would become inconsistent with the deed of retirement

of Hasmukhbhai and Pravinbhai from 'M/s. Ramdev Masala' and

'Ramdev Exports'.

Dr. A.M. Singhvi, learned senior counsel appearing on behalf of

some of the respondents supplemented Mr. Nariman urging that a

document upon reading contextually may be found to be a family

settlement although the said expression was not used therein. It was,

therefore, urged that the courts would lean strongly in favour of the family

settlement and the MOU, so read, would operate as estoppel against the

other family members who have taken advantage thereof from denying or

disputing implementation thereof.

STATUTORY PROVISIONS

It is not in dispute that the lis between the parties would be governed

by the 1958 Act.

"Deceptively similar" has been defined in Section 2(d) of the 1958

Act to mean as under:

"A mark shall be deemed to be deceptively similar to

another mark if it so nearly resembles that other mark as

to be likely to deceive or cause confusion."

Section 2(j) defines "Mark" to include "a device, brand, heading,

label, ticket, name, signature, word, letter or numeral or any combination

thereof". The expression "registered proprietor" has been defined in

Section 2(q) to mean a person for the time being entered in the register as

proprietor of the trade mark in relation to a trade mark.

Chapter II provides for appointment of the Controller-General of

Patents, Designs and Trade Marks for the purpose of the said Act. Sections

15 and 17 read as under:

"15. Registration of parts of trade marks and of

trade marks as a series.--(1) Where the

proprietor of a trade mark claims to be entitled to

the exclusive use of any part thereof separately, he

may apply to register the whole and the part as

separate trade marks.

(2) Each such separate trade mark shall satisfy all

the conditions applying to and have all the

incidents of, an independent trade mark.

(3) Where a person claiming to be the proprietor of

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several trade marks in respect of the same goods or

description of goods which, while resembling each

other in the material particulars thereof, yet differ

in respect of--

(a) statement of the goods or services in relation to

which they are respectively used or proposed to be

used; or

(b) statement of number, price, quality or names of

places; or

(c) other matter of a non-distinctive character

which does not substantially affect the identity of

the trade mark; or

(d) colour;

seeks to register those trade marks, they may be

registered as a series in one registration.

17. Registration of trade marks subject to

disclaimer.\027If a trade mark -

(a) contains any part--

(i) which is not the subject of a separate application

by the proprietor for registration as a trade mark; or

(ii) which is not separately registered by the

proprietor as a trade mark; or

(b) contains any matter which is common to the

trade or is otherwise of a non-distinctive character,

The tribunal in deciding whether the trade mark

shall be entered or shall remain on the register, may

require, as a condition of its being on the register,

that the proprietor shall either disclaim any right to

the exclusive use of such part or of all or any

portion of such matter, as the case may be, to the

exclusive use of which the tribunal holds him not to

be entitled, or make such other disclaimer as the

tribunal may consider necessary for the purpose of

defining the rights of the proprietor under the

registration:

Provided that no disclaimer shall affect any rights

of the proprietor of a trade mark except such as

arise out of the registration of the trade mark in

respect of which the disclaimer is made."

Chapter III provides for the procedure for and duration of

registration. The 1958 Act envisages filing of an application (Section 18),

advertisement thereof (Section 20), opposition thereto (Section 21) and

correction and amendment thereof (Section 22). Registration of a trade

mark is envisaged in Section 23 of the 1958 Act, the effect whereof is

stated in Section 27 thereof.

The rights which are conferred by registration are stated in Section

28 of the 1958 Act in the following terms:

"28. Rights conferred by registration.--(1)

Subject to the other provisions of this Act, the

registration of a trade mark in Part A or Part B of

the register shall, if valid, give to the registered

proprietor of the trade mark the exclusive right to

the use of the trade mark in relation to the goods or

services in respect of which the trade mark is

registered and to obtain relief in respect of

infringement of the trade mark in the manner

provided by this Act.

(2) The exclusive right to the use of a trade mark

given under sub-section (1) shall be subject to any

conditions and limitations to which the registration

is subject.

(3) Where two or more persons are registered

proprietors of trade marks, which are identical with

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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."

Section 29 provides for the consequences of infringement of trade

marks in the following terms:

"29. Infringement of registered trade marks.--

(1) A registered trade mark is infringed by a

person who, not being a registered proprietor of

the trade mark or a registered use thereof using by

way of permitted use, uses in the course of trade

mark which is identical with, or deceptively

similar to, the trade mark in relation to any goods

in respect of which the trade mark is registered and

in such manner as to render the use of the mark

likely to be taken as being used as a trade mark.

(2) In an action for infringement of a trade mark

registered in Part B of the register an injunction or

other relief shall not be granted to the plaintiff if

the defendant establishes to the satisfaction of the

court that the use of the mark of which the plaintiff

complains is not likely to deceive or cause

confusion or to be taken as indicating a connection

in the course of trade between the goods in respect

of which the trade mark is registered and some

person having the right, either as registered

proprietor or as registered user, to use the trade

mark."

Section 33 provides for saving of vested rights.

INTERPRETATION OF DEED \026 PRINCIPLES OF

MOU, for the purpose of these appeals, may be treated to be a family

settlement. It is, however, well-known that intention of the parties to an

instrument must be gathered from the terms thereof examined in the light of

the surrounding circumstances. [See Sohan Lal Naraindas v. Laxmidas

Raghunath Gadit, (1971) 1 SCC 276]

In Delta International Ltd. v. Shyam Sundar Ganeriwalla [(1999) 4

SCC 545], this Court noticed:

"17. For construction of contracts between the

parties and for the interpretation of such document,

learned Senior Counsel, Mr Desai has rightly

relied upon some paragraphs from The

Interpretation of Contracts by Kim Lewison, Q.C.

as under:

"1.03 For the purpose of the construction of

contracts, the intention of the parties is the

meaning of the words they have used. There is no

intention independent of that meaning.

6.09 Where the words of a contract are capable of

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two meanings, one of which is lawful and the other

unlawful, the former construction should be

preferred.

Sir Edward Coke [Co. Litt. 42a] expressed the

proposition thus:

'It is a general rule, that whensoever the words of a

deed, or of one of the parties without deed, may

have a double intendment and the one standeth

with law and right, and the other is wrongful and

against law, the intendment that standeth with law

shall be taken.'"

It is further stated:

"For that purpose, he referred to the following

observations of Buckley, J. from the paragraphs

which are sought to be relied upon from The

Interpretation of Contracts by Kim Lewison, Q.C.:

"My first duty is to construe the contract, and for

the purpose of arriving at the true construction of

the contract, I must disregard what would be the

legal consequences of construing it one way or the

other way.""

Moreover, the document is to be read as a whole. It is equally well

settled that the deed has to be construed keeping in view the existing law.

It is now a well-settled principle of law that a document must be

construed having regard to the terms and conditions as well as the nature

thereof. [Union of India v. M/s. Millenium Mumbai Broadcast Pvt. Ltd.

2006 (5) SCALE 44]

MOU

We may proceed on the basis that the MOU answers the principles of

family settlement having regard to the fact that the same was actuated by a

desire to resolve the disputes and the courts would not easily disturb them

as has been held in S. Shanmugam Pillai and Others v. K. Shanmugam

Pillai and Others [(1973) 2 SCC 312], Kale and Others v. Deputy Director

of Consolidation and Others [(1976) 3 SCC 119] and Hari Shankar

Singhania & Ors. v. Gaur Hari Singhania & Ors. [JT 2006 (4) SC 251].

Although at one point of time the appellant-Company had taken a

stand that it being not a party to the MOU, it is not bound by the terms

thereof but the same would not mean that in an action for infringement of

trade mark, when the MOU was put as a shield to its claim, it could not

have taken recourse to proper interpretation thereof for the purpose of

determination of the rights of the parties to use the trade mark in question.

It is not a case where the courts refused to lean in favour of family

arrangement or base its decision on technical or trivial ground. We have

been taken through the MOU again and again. It fell for judicial

interpretation. Interpretation processes were undertaken by the Courts

below. The same would also be reviewed by us hereafter.

MOU \026 ANALYSIS OF

The appellant before us is a Company registered and incorporated

under the Companies Act. Indisputably, the parties to the MOU being

Arvindbhai, Hasmukhbhai and Pravinbhai were its Directors. They are all

brothers. All the shares of the Company were held by them and their

family members. The Company although is a juristic person was not made

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a party thereto. The effect of the Company being not a party may have to

be considered by the Trial Court in the suit; but, as the parties for the

purpose of disposal of this appeal proceeded on the basis that the MOU was

entered into by and between the parties thereto; an endeavour shall be made

to construe the same as it stands. We would, however, like to observe that

in the event any other attending circumstances are brought on record by

way of adduction of oral evidences, if permissible in law, warranting a

different interpretation of the said MOU, the learned Trial Judge would be

at liberty to do so. We may furthermore place on record that we are

construing the said MOU only for the purpose of disposal of an

interlocutory matter which would not, thus, be binding on the courts below

at the final hearing of the suit.

The broad propositions which are evident from a perusal of the said

MOU appear to be as under:

Among all the three brothers, Arvindbhai who was the eldest among

them is on one side and Hasmukhbhai and Pravinbhai are on the other. The

division of the assets is broadly arrived at in that proportion. The Counsel

appearing before us proceeded on the basis that MOU for all intent and

purport was a family settlement. Disputes and differences having arisen

between the parties, the said MOU was entered into with a view to resolve

the same as regards the business and property held by them so as to enable

them to be in peace, harmony and understanding in the family. The said

settlement was arrived at through the mechanism of mediation of the well-

wishers of the family. MOU was, thus, entered into for the purpose of

distribution of the properties and business and the same was given effect to

on and from 1.4.1998. It stipulates:

(i) Manufacturing and selling of masala (spices) and instant mix was

being done by the Company.

(ii) The goods used to be manufactured in a factory situated in village

Sola. Another factory was constructed on block No. 527, 542 and

528 at Changodar. The Joint family, viz., the Partnership

(Ramdev Masala) had been selling goods in retail in the name of

'Ramdev Masala' to seven outlets named therein.

(iii) The export business in respect of goods, viz., pepper-spices,

instant mix, groceries and other articles was being done in the

name of Ramdev Exports.

The Trade Mark or trade name which was registered in the name of

the company, viz., Ramdev and its logo of a saint astride on a horse with a

standard went to the Company. The expression "Ramdev" is written in the

Gujarati language just above the said logo and the word "masala" which is

again in the Gujarati language appears just below the same.

Arvindbhai became the exclusive owner of the business Ramdev

Exports (Partnership Firm) and Ramdev Masala (another Partnership Firm).

MOU contained a clarification to the effect that the other two brothers, viz.,

Hasmukhbhai and Pravinbhai became the owners thereof and would carry

on the management of the business of the Company. The two brothers,

Hasmukhbhai and Pravinbhai were given the right to carry on export

business under the brand name of 'Ramdev' but in a manner which would

not cause any loss to Arvindbhai or vice-versa. Whereas the land situated

at Sola went to Arvindbhai along with the building, the machineries

belonging to the company remained with the Company. The new factory

and machinery also went to the Company. A right of pre-emption in

respect of the trade mark Ramdev was also created in terms whereof

Hasmukhbhai and Pravinbhai was to offer sale of the said trade mark to

Arvindbhai in the event they intend to do so. It was, thus, made clear that

the manufacturing activities were to be restricted to the Company through

Hasmukhbhai and Pravinbhai.

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The two brothers, viz., Hasmukhbhai and Pravinbhai, also had the

right to carry out export business under the brand name of Ramdev but in a

manner which would not cause any loss to the eldest brother or vice-versa.

We have noticed hereinbefore that the partnership Ramdev Masala

had an user agreement for seven years from 1.4.1991 which lapsed on

31.3.1998. MOU came into force with effect from 1.4.1998. By reason of

the said MOU prima facie Arvindbhai had not been given any

manufacturing right through the user agreement. The trade mark Ramdev,

thus, belonged exclusively to the Company.

Although several trade marks were registered and belonged to the

Company, we are primarily concerned with the trade mark bearing No.

447700 having the aforementioned description.

Both the learned Trial Judge as also the High Court proceeded on the

basis that in terms of the said MOU, the Company acquired an exclusive

right to use the same.

It is not in dispute that the respondents have been manufacturing

spices under and name and style of 'Swad'. The said mark is a registered

one.

The Courts below proceeded on the basis that the mark used by the

respondents are deceptively similar to the trade mark registered in favour of

the appellant. There is no dispute in regard to the said findings. We would

hereinafter consider the effect thereof.

TRADE MARK-CONCEPT

The concept of trade mark dates back to ancient times. Even in the

Harappan Civilization marks of trade with foreign countries such as

Mesopotamia and Babylonia were found embossed on articles. The law of

trade marks was formalised with the process of registration which gave

exclusivity to a trader right to deal in goods using a symbol or mark of

some sort to distinguish his goods from similar goods sold by other traders.

Even today the grant of a trade mark is an indicator of exclusivity in trade

under that mark and this right cannot be transferred. Only a limited right of

user can be granted via licence.

In The Modern Law of Trade Marks by Christopher Morcom,

Butterworths 1999, it is stated:

"\005The concept of distinguishing goods or services

of the proprietor from those of others was to be

found in the requirements for a mark to be

registrable. Essentially, whatever the wording

used, a trade mark or a service mark was an

indication which enabled the goods or services

from a particular source to be indentified and thus

distinguished from goods or services from other

sources. In adopting a definition of 'trade mark'

which simply describes the function in terms of

capability of 'distinguishing the goods or services

of one undertaking from those of other

undertakings' the new law is really saying

precisely the same thing."

In Gujarat Bottling Co. Ltd. and Others v. Coca Cola Co. and Others

[(1995) 5 SCC 545], it was held that licensing of trade mark is governed by

common law which is also statutorily permissible provided:

"\005 (i) the licensing does not result in causing

confusion or deception among the public; (ii) it

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does not destroy the distinctiveness of the trade

mark, that is to say, the trade mark, before the

public eye, continues to distinguish the goods

connected with the proprietor of the mark from

those connected with others; and (iii) a connection

in the course of trade consistent with the definition

of trade mark continues to exist between the goods

and the proprietor of the mark\005"

Making use of another's trade mark is not only a violation of

business ethics but has also been linked to dishonestly making use of the

goodwill and reputation built up and associated with the mark.

In Laxmikant V. Patel v. Chetanbhai Shah and Another [(2002) 3

SCC 65], it was stated:

"10. A person may sell his goods or deliver his

services such as in case of a profession under a

trading name or style. With the lapse of time such

business or services associated with a person

acquire a reputation or goodwill which becomes a

property which is protected by courts. A

competitor initiating sale of goods or services in

the same name or by imitating that name results in

injury to the business of one who has the property

in that name. The law does not permit any one to

carry on his business in such a way as would

persuade the customers or clients in believing that

the goods or services belonging to someone else

are his or are associated therewith. It does not

matter whether the latter person does so

fraudulently or otherwise. The reasons are two.

Firstly, honesty and fair play are, and ought to be,

the basic policies in the world of business.

Secondly, when a person adopts or intends to

adopt a name in connection with his business or

services which already belongs to someone else it

results in confusion and has propensity of diverting

the customers and clients of someone else to

himself and thereby resulting in injury."

PURPOSE OF TRADE MARK

A trade mark is the property of the manufacturer. The purpose of a

trade mark is to establish a connection between the goods and the source

thereof which would suggest the quality of goods. If the trade mark is

registered, indisputably the user thereof by a person who is not otherwise

authorised to do so would constitute infringement. Section 21 of the 1958

Act provides that where an application for registration is filed, the same can

be opposed. Ordinarily under the law and, as noticed hereinbefore, there

can only be one mark, one source or one proprietor. Ordinarily again right

to user of a trade mark cannot have two origins. The first respondent herein

is a rival trader of the appellant-Company. It did not in law have any right

to use the said trade mark, save and except by reason of the terms contained

in the MOU or continuous user. It is well-settled that when defences in

regard to right of user are set up, the onus would be on the person who has

taken the said plea. It is equally well-settled that a person cannot use a

mark which would be deceptively similar to that of the registered trade

mark. Registration of trade marks is envisaged to remove any confusion in

the minds of the consumers. If, thus, goods are sold which are produced

from two sources, the same may lead to confusion in the mind of the

consumers. In a given situation, it may also amount to fraud on the public.

A proprietor of a registered trade mark indisputably has a statutory right

thereto. In the event of such use by any person other than the person in

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whose name the trade mark is registered, he will have a statutory remedy in

terms of Section 21 of the 1958 Act. Ordinarily, therefore, two people are

not entitled to the same trade mark, unless there exists an express licence in

that behalf.

DIFFERENT FUNCTIONS OF A TRADE MARK

We may now note a few precedents on the function of a trade mark.

In Sumat Prasad Jain v. Sheojanam Prasad (Dead) and Others and

State of Bihar [(1973) 1 SCC 56], this Court held:

"\005Thus, the distinction between a trade mark and

a property mark is that whereas the former denotes

the manufacture or quality of the goods to which it

is attached, the latter denotes the ownership in

them. In other words, a trade mark concerns the

goods themselves, while a property mark concerns

the proprietor. A property mark attached to the

movable property of a person remains even if part

of such property goes out of his hands and ceases

to be his."

In Canon Kabushiki Kaisha v. Metro-Goldwyn-Mayer Inc. [(1999)

RPC 117], the European Court of Justice emphasised the test of likelihood

of confusion in the following terms:

"40. That view is also confirmed by the judgment

of the court in SABEL, in which it held that the

"likelihood of confusion must\005be appreciated

globally, taking into account all factors relevant to

the circumstances of the case" (at paragraph 22).

It is true that that statement was made in a different

context: the court was there considering the

question whether conceptual similarity of the

marks alone could give rise to confusion within the

meaning of Article 4(1)(b), in a situation in which

the goods in question were clearly the same.

However, the statement is one of general

application."

In Baker Hughes Limited v. Hiroo Khushalani [1998 PTC (18) 580],

the question as regards likelihood of confusion even by the enlightened

public was noticed in the following words :

"Again in Grotrian, Helfferich, Schulz, Th.

Steinweg Nachf, a Corporation Vs. Steinway &

Sons, a corporation, 365 F.Supp. 707 (1973),

striking a similar note the Court held as under:

"Plaintiff argues that purchaser will not be

confused because of the degree of their

sophistication and the price (B & L Sales

Associates Vs. H. Daroff & Sons, Inc.,

supra, 421 F.2d at 354). It is true that

deliberate buyers of expensive pianos are

not as vulnerable to confusion as to products

as hasty buyers of inexpensive merchandise

at a newsstand or drug store [Callmann,

Unfair Competition Trademarks and

Monopolies, (3d ed. 1971)]. The

sophistication of buyers, however, does not

always assure the absence of confusion

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[Communications Satellite Corp. Vs.

Comcet, Inc., 429 F.2d at 1252]. It is the

subliminal confusion apparent in the record

as to the relationship, past and present,

between the corporate entities and the

products that can transcend the competence

of even the most sophisticated consumer.

Misled into an initial interest, a potential

Steinway buyer may satisfy himself that the

less expensive Grotrian-Steinweg is at least

as good, if not better, than a Steinway.

Deception and confusion thus work to

appropriate defendant's good will. This

confusion, or mistaken beliefs as to the

companies' interrelationships, can destroy

the value of the trademark which is intended

to point to only one company [American

Drill Busing Co. v. Rockwell Mfg. Co., 342

F.2d 1922, 52 CCPA 1173 (1965)]. Thus,

the mere fact that purchasers may be

sophisticated or discriminating is not

sufficient to preclude the likelihood of

confusion. "Being skilled in their own art

does not necessarily preclude their

mistaking one trademark for another when

the marks are as similar as those here in

issue, and cover merchandise in the same

general field" [Id].

Having regard to the above discussion prima facie

I am of the opinion that the word Baker occurring

in the corporate name of the second defendant

suggests its connection or nexus with 'Baker',

which depicts a wrong picture as from February,

1995 'Baker' has terminated its relation with the

defendants. The continuance of the word Baker as

part of the corporate name of the second defendant

is likely to cause deception and confusion in the

mind of the customers. There would be no

justification for the second defendant to use the

word Baker as part of its corporate name after the

ties between the first plaintiff and the second

defendant have ceased to exist."

The said decision has been noticed by this Court in Baker Hughes

Ltd. and Another v. Hiroo Khushlani and Another [(2004) 12 SCC 628].

In Milmet Oftho Industries and Others v. Allergan Inc. [(2004) 12

SCC 624], in regard to medicinal products, this Court opined:

"\005Whilst considering the possibility of likelihood

of deception or confusion, in present times and

particularly in the field of medicine, the courts

must also keep in mind the fact that nowadays the

field of medicine is of an international character.

The court has to keep in mind the possibility that

with the passage of time, some conflict may occur

between the use of the mark by the applicant in

India and the user by the overseas company. The

court must ensure that public interest is in no way

imperilled\005"

We may in this connection notice a recent judgment of the European

Court of Justice in Canon Kabushiki Kaisha (supra) wherein it was opined:

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"28. That case concerned the interpretation of

Article 4(1)(b) of the Directive in so far as it refers

to "a likelihood of confusion on the part of the

public, which includes the likelihood of

association with the earlier trade mark". The court

explained that it had been submitted that "the

likelihood of association may arise in three sets of

circumstances: (1) where the public confuses the

sign and the mark in question (likelihood of direct

confusion); (2) where the public makes a

connection between the proprietors of the sign and

those of the mark and confuses them (likelihood of

indirect confusion or association); (3) where the

public considers the sign to be similar to the mark

and perception of the sign calls to mind the

memory of the mark, although the two are not

confused (likelihood of association in the strict

sense). (Paragraph 16 of the judgment).

29. The court stated that it was therefore necessary

to determine "whether Article 4(1)(b) can apply

where there is no likelihood of direct or indirect

confusion, but only a likelihood of association in

the strict sense" (paragraph 17 of the judgment). It

concluded: "The terms of the provision itself

exclude its application where there is no likelihood

of confusion on the part of the public". (paragraph

18 of the judgment). Thus, the court held that "the

mere association which the public might make

between two trade marks as a result of their

analogous semantic content is not in itself a

sufficient ground for concluding that there is a

likelihood of confusion" within the meaning of

Article 4(1)(b)."

TRADE MARK AND GOODWILL

Traditionally, a trade mark has always been considered a vital and

inseparable part of the goodwill of the business. In fact, the sale of a trade

mark without the sale of the goodwill to the same buyer is considered null

and void. However, the trade mark can be assigned with or without the

goodwill of business though subject to certain conditions. [See V.A.

Mohta's Trade Marks, Passing Off and Franchising, pages 12, 313.]

ENTITLEMENT TO USE

The contention of the appellant before the Courts below was that its

right to the said trade mark has been entrenched by the respondents on

account of use of the same as part of the trade name in view of the fact that

although it has started the business in the trade name 'Swad', the first

respondent, on the label and the packing material of the said product, had

printed the name of the manufacturer 'Ramdev Masala' in such a prominent

manner that the same would create an impression in the mind of the

ordinary unwary customer that the same is a product of the appellant

Company. It also alleged that the respondents had adopted advertisements,

marketed and displayed boards in such a manner so as to deliberately

deceive the customer.

The concurrent finding of fact arrived at by both the courts was that

the packing material and wrapper of both the parties was phonetically and

visibly similar to the registered mark. The packing material and label used

by the respondents were deceptively similar to that of the appellant and the

same creates deception as well as confusion in the minds of customers who

are literate, illiterate, male or female, who used to purchase in retail market

from small shops as well as big departmental stores.

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The learned Trial Court as also the High Court proceeded on the

basis that the respondents are entitled to use the said trade mark by reason

of the stipulations contained in the said MOU as a result whereof they

became entitled to use the trade mark Ramdev for their retail business of

spices in seven outlets, which used to be belonging to the company. The

said outlets were meant to be used for retail sale of the products of the

appellant alone.

The learned Trial Judge as also the High Court, however, failed to

notice two significant and important provisions in the said MOU, viz., (i)

the defendants could not carry on business in wholesale of the said

products; (ii) it was meant to be sold directly to the consumers and on the

productions "not for resale" was required to be printed on each packet.

What, therefore, could be done by the respondents was to sell the products

of the appellant through the said outlets. It was one of the primary business

of the partnership firm which was given to the first respondent. Prima

facie, therefore, the first respondent could sell only the product of the

appellant. The respondents, however, were not restrained from

manufacturing spices in their own factory. They were entitled to do so.

They started the same under the brand name of 'Swad'. They could even

use the same retail outlets for the purpose of promoting their own products

but prima facie they could not use the mark registered in the name of the

appellant Company. The registration number of trade mark is 447700.

Once the appellant had acquired goodwill and reputation thereto, in the

event of any infringement to the said right, the remedies provided for in the

1958 Act would be available to it. The terms of the MOU, in our opinion,

are clear and unambiguous. It was required to be construed, even if it was

obscure to some extent by making attempt to uphold the one which would

be in consonance with law and not offend the same. Quality control by a

registered trade holder vis-`-vis the one produced by an unregistered one is

one of the factors which is required to be taken into consideration for the

purpose of passing an order of injunction. It is one thing to say that the

respondents were permitted to carry on trade but it would be another thing

say that they would be entitled to manufacture and market its products

under a name which would be deceptively similar to that of the registered

trade mark of the appellant. So long the parties to an arrangement can

continue to carry out their respective businesses without infringing the right

of another, indisputably the terms thereof must be given effect to. But the

matter would be entirely different when a party who has not been expressly

authorised to manufacture the goods in which the Company had been

carrying on business under the same name, the respondents under law could

not have been permitted to carry on the manufacturing and marketing of

their products under the same name. In a case of this nature, even a

mandatory injunction can be granted. The respondents in the instant case

have adopted a part of the appellant's registered trade mark as a part of its

corporate name. They had merely been permitted to trade from seven

outlets. In that view of the matter, they had a limited right under the MOU

and by reason thereof they could not have been permitted to start

manufacturing of spices under the name and style of 'Ramdev Masala'.

Even under the common law, licence has to be interpreted to subsume the

law and prevent the mischief which is deceptive having regard to the fact

that trafficking in trade mark is not permitted.

It is true that the respondents have been permitted in terms of the

MOU to continue their business in the name of the partnership firm and to

use the label mark, logo, etc. but the said MOU must be construed in the

light of the law operating in the field. For the said purpose, prima facie, the

deeds of retirement are not required to be looked into. When a right to use

a trade mark is given, such a right can be exercised only in the manner laid

down therein. If in absence of any express licence or agreement to use its

label the respondents use the self-same trade mark, the same would not

only lead to confusion but may also cause deception. Even a common law

licence, it is well-settled, cannot result in the dilution of the trade mark.

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In that view of the matter, we are not in a position to subscribe to the

views of the learned Trial Judge and the High Court that although the first

respondent would be at liberty to carry on the business of manufacture of

spices, it can use the mark 'Ramdev' only in seven outlets. It evidently in

view of the legal position, could do so in respect of the products of the

appellant alone, which would be evident from the fact that at the relevant

point of time, the respondents were not carrying any such business. The

direction of the learned Trial Judge that the respondents should be

prevented from using the word "Ramdev Masala" and their label and

packing, however, has been over-turned by the High Court on the premise

that they are required to observe the statutory requirements under the

Prevention of Food Adulteration Act, 1955 as also the Standards of

Weights and Measures Act, 1976.

NON-OBSTANTE PROVISIONS

The non-obstante nature of a provision although may be of wide

amplitude, the interpretative process thereof must be kept confined to the

legislative policy. A non-obstante clause must be given effect to, to the

extent the Parliament intended and not beyond the same. [See ICICI Bank

Ltd. v. Sidco Leathers Ltd. & Ors., 2006 (5) SCALE 27]

The question which also escaped the attention of the High Court was

that having regard to the non-obstante clause contained in the 1958 Act

ordinarily for any purpose, the trade mark cannot be infringed. If an

infringement of trade mark is established, the onus would be on the

defendants to show that he is entitled thereto either by reason of

acquiescence on the part of the owner of the registered trade mark or he

himself has acquired a right thereto. The Provisions of the Standards of

Weights and Measures Act or the Prevention of Food Adulteration Act do

not confer such right. Yet again, significantly, a pre-emptive right had been

conferred in favour of the first respondent which is itself suggestive of the

fact that the first respondent admitted and acknowledged the right of the

appellant to the said trade mark.

In the MOU, furthermore it was categorically stated that the use of

the trade mark was only to the extent of retail sale as on the packages, the

words "not for resale" were to be printed. If the parties intended to allow

the first respondent herein to manufacture his own products and to market

the same by using the name of Ramdev Masala, the question of grant of a

right to sell only in retail and that also printing the words 'not for resale'

would not have arisen. A manufacturer is not only entitled to sell his own

products in retail but also in wholesale. It can use any outlet for the said

purpose whether belonging to it or any other. It would lead to an anomaly

if it be held that the first respondent would be permitted not only to sell the

products of the appellant but also its own products under the same trade

name albeit only from the seven outlets.

By reason of the said MOU, the respondents are not bound to buy

any product from the appellant but there is an obligation on the part of the

appellant to supply the same as otherwise it would lead to closure of

business of Arvindbhai which would have been the intention of the parties.

When the parties had settled their disputes, it was expected that the outlets

would be utilised for the purposes for which they were meant to be utilised.

What were the mutual obligations of the parties is a matter which can be

considered only at the trial or in any other appropriate proceeding, but

prima facie it goes without saying that the first respondent, in any event,

was entitled to sell also his own products from the said outlets. The parties

for the said purpose thought of remaining mutually dependent as it was

stipulated that while also competing with each other they would see to it

that by action of one, the other is not harmed at least while exporting the

materials. It is, thus, not a case where the appellant having taken advantage

of the terms of the MOU had resiled therefrom and in that view of the

matter the principle of estoppel cannot be said to have any application in

the instant case.

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We are also not in a position to accept the submission of Mr.

Nariman that the MOU must be read with the deed of partnership or the

deeds of retirement whereby and whereunder the firm 'Ramdev Masala'

and 'Ramdev Exports' were permitted to use the word 'Ramdev'.

What is registered is a logo wherein the words 'Ramdev' and

'Masala' are prominent. A person may be held to be permitted to carry on

business in spices as contradistinguished from the permission to carry on

manufacturing goods which are similar to that of the appellant, but in terms

of the statutory provisions, the respondents were not legally permitted to

sell its products in packages or labels which would be deceptively similar

to that of the registered owner of a trade mark. The right to manufacture

masala and to sell the same with the registered logo, it will bear repetition

to state, was assigned as far back in 1991. If the contention of the Senior

Counsel is accepted, the said purpose would be lost. In a case of this

nature, therefore, ordinarily an injunction would issue.

By reason of interpretation of MOU, trade mark cannot be infringed

and further when the right of user has been relinquished, the same could not

have been claimed by the respondents.

WAIVER

The matter may be considered from another angle. If the first

respondent has expressly waived his right on the trade mark registered in

the name of the appellant-Company, could he claim the said right

indirectly? The answer to the said question must be rendered in the

negative. It is well-settled that what cannot be done directly cannot be

done indirectly.

The term 'Waiver' has been described in the following words:

"Waiver is the abandonment of a right in such a way that

the other party is entitled to plead the abandonment by

way of confession and avoidance if the right is thereafter

asserted, and is either express or implied from

conduct\005A person who is entitled to rely on a

stipulation, existing for his benefit alone, in a contract or

of a statutory provision may waive it, and allow the

contract or transaction to proceed as though the

stipulation or provision did not exist. Waiver of this kind

depends upon consent, and the fact that the other party

has acted upon it is sufficient consideration\005

It seems that, in general, where one party has, by his

words or conduct, made to the other a promise or

assurance which was intended to affect the legal relations

between them and to be acted on accordingly, then, once

the other party has taken him at his word and acted on it,

so as to alter his position, the party who gave the promise

or assurance cannot afterwards be allowed to revert to the

previous legal relationship as if no such promise or

assurance had been made by him, but he must accept

their legal relations subject to the qualification which he

has himself so introduced, even though it is not supported

in point of law by any consideration.

[See 16 Halsbury's Laws (4th edn) para 1471]

Waiver may sometimes resemble a form of election, and sometimes

be based on ordinary principles of estoppel. [See 45 Halsbury's Laws (4th

edn.) para 1269]

In Indu Shekhar Singh & Ors. v. State of U.P. & Ors. [2006 (5)

SCALE 107], this Court held:

"They, therefore, exercised their right of option.

Once they obtained entry on the basis of election,

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they cannot be allowed to turn round and contend

that the conditions are illegal\005"

SECTIONS 15 AND 17 ISSUE

Section 15 of the 1958 Act postulates registration of the whole and a

part thereof as separate trade marks. The nature of the trade mark of the

appellant has been noticed hereinbefore.

There are three elements in the said trade mark, viz., 'Ramdev',

'Masala' and the 'horse'. The deception could be as regard the prominent

features of the said trade mark.

Section 15 of the 1958 Act, in our considered opinion, is not

attracted in the instant case. By reason of the said provision, registration of

trade mark in regard to the exclusive use is permissible both in respect of

the whole trade mark as also the part thereof separately. Where such

separate trade mark in regard to a part of it is applied for, the applicant

must satisfy the conditions applying to and have all the incidents of an

independent trade mark. Sub-section (3) of Section 15 of the 1958 Act

provides for a case where the proprietor of several trade marks claimed

registration in respect of the same goods or description of the goods which

while resembling each other in the material particulars thereof yet differ in

respect of the matters provided for therein. We are not, in this case,

concerned with such a legal question.

In Ashok Chandra Rakhit Ltd. (supra), whereupon reliance has been

placed by Mr. Nariman, this Court was concerned with a proprietary mark

of 'Shree'. It was claimed that the mark 'Shree' was a trade mark apart

from the device as a whole and it was an important feature of its device.

The respondents were carrying on business in the name and style of Shree

Durga Charan Rakshit. It was in the peculiar factual background obtaining

therein, this Court, referred to the decision of Lord Esher in Pinto v.

Badman [8 RPC 181] to say that where a distinctive label is registered as a

whole such registration cannot possibly give any exclusive statutory right

to the proprietor of the trade mark to the use of any particular word or name

contained therein apart from the mark as a whole. This Court in the

aforementioned factual backdrop opined:

"\005This, as we have already stated, is not quite

correct, for apart from the practice the Registrar

did advert to the other important consideration,

namely, that on the evidence before him and the

statement of counsel it was quite clear that the

reason for resisting the disclaimer in this particular

case was that the Company thought, erroneously

no doubt but quite seriously, that the registration of

the trade mark as a whole would, in the

circumstances of this case, give it a right to the

exclusive use of the word "Shree" as if separately

and by itself it was also its registered trade mark

and that it would be easier for it to be successful in

an infringement action than in a passing off action.

It was precisely the possibility of such an

extravagant and untenable claim that called for a

disclaimer for the purpose of defining the rights of

the respondent company under the registration\005"

(Emphasis supplied)

The said decision has no application to the fact of this case.

Mr. Nariman is also not correct in contending that only a label has

been registered and not the name 'Ramdev'. Definition of 'mark' as

contained in Section 2(j) of the 1958 Act also includes name, signature, etc.

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SECTION 29 ISSUE

Section 28 of the 1958 Act confers the right of registration whereas

Section 29 thereof provides for the remedies for infringement of trade

mark. What is needed by way of cause of action for filing a suit of

infringement of trade mark is use of a deceptively similar mark which may

not be identical. What would be deceptively similar, as defined in Section

2(d) of the 1958 Act, would be a mark if it nearly resembles that other mark

as to be likely to deceive or cause confusion. It is, therefore, not a case

where the respondents could raise valid defence in terms of Section 29 of

the 1958 Act.

The right conferred in terms of Section 28 of the 1958 Act although

is required to be read with Sections 15 and 17 thereof but it is difficult to

accept that each part of the logo was required to be separately registered.

Section 28 of the 1958 Act confers an exclusive right of using trade mark to

a person who has got the trade mark registered in his name. Such right is,

thus, absolute. Sub-section (3) of Section 28 raises a legal fiction for the

purposes specified therein but we are not concerned therewith in the instant

case. Sub-section (2) of Section 29 inter alia provides for the defences.

We may not in this case go into the question as to whether it was

essential having regard to the provisions contained in the MOU that the

user agreement should have been registered in terms of Section 49 of the

1958 Act as was opined by the High Court. But, we have no doubt in our

mind that the user agreement having come to an end on 31st March, 1998,

i.e., on the expiry of seven years from the date of execution, the

respondents could no more claim any right thereunder. The user agreement

was valid from 01.04.1991 to 31.03.1998. The MOU came into force from

1.4.1998. The right to user has not been conveyed by reason of the said

MOU. The cut off date for determining the respective rights of the parties

would, thus, be 1.4.1998. Submission of the learned counsel that the MOU

for the purpose of Section 28 of the 1958 Act should be read with the

partnership deed is not acceptable to us. In fact, the respondents have

consciously relinquished their right, if any.

It is not a case where Sections 48 and 49 of the 1958 Act would be

applicable so as to enable the respondents to raise a defence in terms of

Section 30(1)(b) thereof.

It is also not a case where non-registration of MOU as was the case

in Amteshwar Anand v. Virender Mohan Singh and Others [(2006) 1 SCC

148] was taken as a shield to defeat the purpose of the agreements entered

into by and between the parties. In that case, however, what was contended

was that the agreement required registration in terms of Section 17(1) of the

Registration Act whereas the High Court had found that the user agreement

was not registered in terms of Section 49 of the Act holding:

"\005The Composition Deed in this case was a

transaction between the members of the same

family for the mutual benefit of such members. It

is not the appellants' case that the agreements

required registration under any other Act. Apart

from this, there is the principle that Courts lean in

favour of upholding a family arrangement instead

of disturbing the same on technical or trivial

grounds particularly when the parties' have

mutually received benefits under the arrangement.

Both the courts below had concurrently found that

the parties had enjoyed material benefits under the

agreements. We have ourselves also re-scrutinized

the evidence on record on this aspect and have

found nothing to persuade us to take a contrary

view. Furthermore, in this case the agreements had

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merged in the decree of the Court which is also

excepted under Sub-section 2(vi) of Section 17 of

the Registration Act, 1908"

In re Cadbury Brothers' Application (supra), it is stated:

"It seems to me manifest that the registration of

this trade mark cannot give rise to any rights

except a right to the mark as a whole. It cannot

give any statutory rights at all in respect of the

word "Tudor"; and, that being so, it is inexpedient

to place on the register an unnecessary disclaimer,

because the effect of so doing is to unsettle the law

and give rise to doubts in other cases, where such

disclaimers are not inserted\005"

For the self-same reason, this decision is also not applicable.

ESSENCE OF PASSING OFF ACTION

In a case of this nature, the test for determination of the dispute

would be the same where a cause of action for passing off arises. The

deceptively similar test, thus, would be applicable herein.

The doctrine of passing off is a common law remedy whereby a

person is prevented from trying to wrongfully utilise the reputation and

goodwill of another by trying to deceive the public through 'passing off'

his goods.

In Kerly's Law of Trade Marks and Trade Names' Supplement pages

42 and 43, paragraph 16-02, the concept of passing off is stated as under:

"The law of passing-off can be summarised in one

short general proposition no man may pass off his

goods as those of another. More specifically, it

may be expressed in terms of the elements which

the plaintiff in such an action has to prove in order

to succeed. These are three in number.

Firstly, he must establish a goodwill or reputation

attached to the goods or services which he supplies

in the mind of the purchasing public by association

with the identifying 'get-up' (whether it consists

simply of a brand name or a trade descrip- tion,or

the individual features of labelling or packaging)

under which his particular goods or services are

offered to the public, such that the get-up is

recognised by the public as distinctive specifically

of the plaintiff's goods or services.

Secondly, he must demonstrate a misrepresentation

by the defendant to the public (whether or not

intentional) leading or likely to lead the public to

belief that the goods or services offered by him are

the goods or services of the plaintiff.

Thirdly, he must demonstrate that he suffers or, in

a quick time action, that he is likely to suffer

damage by reason of the erroneous belief

engendered by the defendant's misrepresentation

that the source of the defendant's goods or service

is the same as the source of those offered by the

plaintiff..."

PASSING OFF - INFRINGEMENT

Although, the defendant may not be using the actual trade mark of

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the plaintiff, the get up of the defendant's goods may be so much like the

plaintiff's that a clear case of passing off could be proved. It is also

possible that the defendant may be using the plaintiff's mark, the get up of

the defendant's goods may be so different from the get up of the plaintiff's

goods and the prices also may be so different that there would be no

probability of deception of the public. However, in an infringement action,

an injunction would be issued if it is proved that the defendant is

improperly using the plaintiff's mark. In an action for infringement where

the defendant's trade mark is identical with the plaintiff's mark, the Court

will not enquire whether the infringement is such as is likely to deceive or

cause confusion. The test, therefore, is as to likelihood of confusion or

deception arising from similarity of marks is the same both in infringement

and passing off actions. [See Ruston & Hornsby Ltd. v. The Zamindara

Engineering Co., (1969) 2 SCC 727]

In Parle Products (P) Ltd. v. J.P. and Co., Mysore [(1972) 1 SCC

618], emphasis was laid on the broad and essential features of the

impugned mark holding:

"\005It would be enough if the impugned mark bears

such an overall similarity to the registered mark as

would be likely to mislead a person usually dealing

with one to accept the other if offered to him\005"

Noticing the similarity of the mark in question with that of the

impugned mark, it was opined that "if one was not careful enough to note

the peculiar features of the wrapper on the plaintiffs' goods, he might easily

mistake the defendants' wrapper for the plaintiffs' if shown to him some

time after he had seen the plaintiffs'".

It was further stated:

"\005After all, an ordinary purchaser is not gifted

with the powers of observation of a Sherlock

Homes. We have therefore no doubt that the

defendants' wrapper is deceptively similar to the

plaintiffs' which was registered. We do not think it

necessary to refer to the decisions referred to at the

bar as in our view each case will have to be judged

on its own features and it would be of no use to

note on how many points there was similarity and

in how many others there was absence of it."

In Kaviraj Pandit Durga Dutt Sharma v. Navaratna Pharmaceutical

Laboratories [AIR 1965 SC 980], this Court held:

"\005These matters which are of the essence of

the cause of action for relief on the ground of

passing off play but a limited role in an action for

infringement of a registered trade mark by the

registered proprietor who has a statutory right to

that mark and who has a statutory remedy for the

event of the use by another of that mark or a

colourable imitation thereof. 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

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for infringement. No doubt, where the evidence in

respect of passing off consists merely of the

colourable use of a registered trade mark, the

essential features of both the actions might

coincide in the sense that what would be a

colourable imitation of a trade mark in a passing

off action would also be such in an action for

infringement of the same trade mark\005

In Poddar Tyres Ltd. v. Bedrock Sales Corporation Ltd. and another

[AIR 1993 Bombay 237], Srikrishna, J., as His Lordship then was, repelled

the contention that any trader who exclusively sells the goods bearing a

registered trade mark, has a right to adopt a trade name which could include

the said trade mark and that such adoption would not amount to

infringement or passing off stating:

"\005Mr. Rahimtoola was not able to cite any

authority for the proposition propounded, which I

find somewhat startling. The consequences of

accepting this proposition would mean that the

registered proprietor would be at the mercy of

anyone who sells the goods bearing his trade mark.

In a situation like the present, where the businesses

are overlapping, the trade channels are almost

identical and the family background is

conspicuous, I am of the view that there would be

an inherent likelihood of confusion in the minds of

the public that not only that the goods, which

emanate from the first defendants, are "Bedrock"

goods, but also further that the first defendants'

business is somehow intimately connected with the

plaintiffs', either as a branch, agency or otherwise.

There is also the danger, as rightly emphasized by

the plaintiffs, that any act or omission of the first

defendants would have deleierious repercussion on

the credit, reputation and goodwill of the plaintiffs

themselves. For example, if the first defendants

were to commit an act of insolvency or do any act

which tarnishes their reputation in the market,

there is imminent likelihood of people jumping

into the confused conclusion that the plaintiffs had

committed an act of insolvency or that they had

done something objectionable. I am, therefore,

unable to accept the contention of the first

defendant that, by their purportedly selling

exclusively "Bedrock" goods, they are entitled to

adopt the word "Bedrock" as a part of their

company name or trading style. That they have

done so is not really disputed. In my view,

therefore, there is both infringement and passing

off action, prima facie."

De Cordova and Others v. Vick Chemical Co. [1951 (68) RPC 103]

is nearer the issue involved herein as in that case the registered trade mark

consisting of the word 'Vaporub' and another registered trade mark

consisting of a design of which the words 'Vicks Vaporub Salve' formed a

part. The defendants in the suit advertised their ointment as 'Karsote

Vapour Rub'. It was held that the defendants had infringed the registered

trade mark.

The said decision was quoted with approval by this Court in K.R.

Chinna Krishna Chettiar v. Shri Ambal and Co., Madras and Another [1969

(2) SCC 131] wherein the question was whether the word 'Ambal'

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resembles the sound of the word 'Andal'. It was held to be so upon

rejecting an argument advanced on behalf of the defendant that the same

had distinct meanings stating:

"\005The Hindus in the south of India may be well

aware that the words Ambal and Andal represent

the names of two distinct Goddesses. But the

respondent's customers are not confined to Hindus

alone. Many of their customers are Christians,

Parsees, Muslims and persons of other religious

denominations. Moreover, their business is not

confined to south of India. The customers who are

not Hindus or who do not belong to the south of

India may not know the difference between the

words Andal and Ambal. The words have no direct

reference to the character and quality of snuff. The

customers who use the respondent's goods will

have a recollection that they are known by the

word Ambal. They may also have a vague

recollection of the portrait of a benign goddess

used in connection with the mark. They are not

likely to remember the fine distinctions between a

Vaishnavite goddess and a Shivaite deity\005"

We may not lose sight of the fact that the mark was assigned in

favour of the Company as far back in the year 1992. The mark did not

come to the company through MOU or otherwise.

LACHES AND ACQUIESCENCE

The plea of acquiescence on the part of the appellant herein has been

raised on two counts:

(i) The plaintiffs- appellant permitted the respondents to carry on

business in the trade name of 'Ramdev Masala".

(ii) It is, thus, also not entitled to an order of injunction.

The appellant by a registered notice dated 12/15-12-1998 asked the

defendant Nos. 1 and 7 that the firm 'Ramdev Masala' had been

unauthorisedly using the appellant-company registered trade mark in

respect of its product sold and manufactured by them and on the packing

materials, labels, boxes, poly pouches. They were called upon to restrain

from doing so with immediate effect and destroy the necessary label/

packets of packing materials failing which it was threatened that a legal

action would be taken.

For determining the said issues, we may notice the following facts.

A civil suit was filed by the first respondent in the Ahmedabad City

Civil Court wherein a prayer was made that the deed of assignment be

declared null and void and the appellant herein be permanently restrained

from using the same as also for a declaration that they are the owners of the

said trade mark/trade name. However, an interim order as prayed for

therein was not granted. A First Information Report was also lodged

against the respondents by the appellant-Company before the Madhupura

Police Station for commission of an alleged offence under Section 63 of the

Copyright Act and Sections 78 and 79 of the 1958 Act as well as Sections

417, 420, 419 and 486 of the Indian Penal Code. An application for

quashing the said complaint was filed before the Gujarat High Court on

4.8.1999. It was dismissed by an order dated 26.10.1999. A Special Leave

Petition preferred thereagainst being SLP (Crl.) No. 3900 of 1999 was also

dismissed by this Court by an order dated 14.12.1999. In the meanwhile, a

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rectification application was filed by the respondents before the Registrar

of Trade Mark, Mumbai allegedly stating that the registered trade mark

bearing No. 447700 was not being used by the plaintiff, it was not entitled

to continue to claim title thereover or use the same. Various applications

were moreover filed by the respondents herein for rectification of the entry

in the register in respect of various label marks of the appellant. The

appellant thereafter issued a public notice on 17.12.1999 calling upon the

respondents to restrain themselves from infringing upon the trade mark of

the appellant, in respect whereto a public notice was also issued by the

respondents herein on 21.12.1999. The suit thereafter was filed on

10.2.2000. Contention of the respondents in this behalf was that not only in

terms of the MOU the appellant had been allowed to carry on business

under the name and style of 'Ramdev Masala', no immediate step having

been taken after issuance of the public notice dated 15.12.1998 for long

time, they were not entitled to obtain an order of injunction. Delay in some

cases may defeat equity but the chronology of events noticed hereinbefore

do not suggest that the appellant's consciously allowed the respondents to

use the trade mark.

Acquiescence is a facet of delay. The principle of acquiescence

would apply where: (i) sitting by or allow another to invade the rights and

spending money on it; (ii) it is a course of conduct inconsistent with the

claim for exclusive rights for trade mark, trade name, etc.

In M/s. Power Control Appliances and Others v. Sumeet Machines

Pvt. Ltd. [(1994) 2 SCC 448], this Court stated:

"Acquiescence is sitting by, when another is

invading the rights and spending money on it. It is

a course of conduct inconsistent with the claim for

exclusive rights in a trade mark, trade name etc. It

implies positive acts; not merely silence or

inaction such as is involved in laches\005"

In an infringement of trade mark, delay by itself may not be a ground

for refusing to issue injunction as has been observed by Lahoti, J. (as His

Lordship then was) in Midas Hygiene Industries (P) Ltd. v. Sudhir Bhatia

and Others [(2004) 3 SCC 90] in the following terms:

"The law on the subject is well settled. In cases of

infringement either of trade mark or of copyright,

normally an injunction must follow. Mere delay in

bringing action is not sufficient to defeat grant of

injunction in such cases. The grant of injunction

also becomes necessary if it prima facie appears

that the adoption of the mark was itself dishonest."

(Emphasis supplied)

The defence of acquiescence, thus, would be satisfied when the

plaintiff assents to or lay by in relation to the acts of another person and in

view of that assent or laying by and consequent acts it would be unjust in

all the circumstances to grant the specific relief.

Kerr in his "Treatise on the Law and Practice of Injunction", Sixth

Edition at pages 360-361 states as under:

"Mere delay after knowledge of the infringement

to take proceedings, not sufficient to call the

Statute of Limitations into operation, or where the

infringement continues, is not, it seems, a bar to

the right of an injunction at the trial. Lapse of time

unaccompanied by anything else is, it seems, no

more a bar to a suit for an injunction in aid of the

legal right than it is to an action deceit.

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But delay may cause the Court to refuse an

interlocutory injunction, especially if the defendant

has built up a trade in which he has notoriously

used the mark\005"

Specific knowledge on the part of the plaintiff and prejudice suffered

by the defendant is also a relevant factor. [See Spry on Equitable

Remedies, Fourth Edition, page 433]

Applying the aforementioned principles in the instant case, it is

evident that the time gap between the issuance of the notice and filing of an

application for grant of injunction was not a voluntary act on the part of the

appellant herein. It had to wait for the outcome of various proceedings

pending before different courts. The respondents having themselves taking

recourse to judicial proceedings, as noticed hereinbefore, cannot now be

permitted to set up the defence of acquiescence on the part of the appellant.

Indisputably, in a case of infringement of trade mark, injunction would

ordinarily follow where it is established that the defendant had infringed the

trade mark and had not been able to discharge its burden as regard the

defence taken by it.

In Pioneer Electronic Corporation and Another v. Registrar of Trade

Marks [(1978) RPC 716], an Australian Court referring to a large number

of decisions observed:

"These cases demonstrate that the essential

requirement for the maintenance of the validity of

a trade mark is that it must indicate a connection in

the course of trade with the registered proprietor,

even though the connection may be slight, such as

selection or quality control or control of the user in

the sense in which a parent company controls a

subsidiary. Use by either the registered proprietor

or a licensee (whether registered or otherwise) will

protect the mark from attack on the ground of non-

user, but it is essential both that the user maintains

the connection of the registered proprietor with the

goods and that the use of the mark does not

become otherwise deceptive. Conversely,

registration of a registered user will not save the

mark if there ceases to be the relevant connection

in the course of trade with the proprietor or the

mark otherwise becomes deceptive."

[See also Holly Hobbie Trade Mark, (1984) RPC 329.]

INJUNCTION ISSUE

It is although beyond any doubt or dispute that the defendant had

been manufacturing and selling its products; what is sought to be injuncted

is using a label which is deceptively similar to that of the plaintiff.

Our attention has been drawn to the right of the parties of the second

and third part of the MOU to carry out export business in the brand name of

'Ramdev' which, in our opinion, does not advance their case as by reason

thereof, the appellant-Company had been also conferred right to carry on

the export business in the name of 'Ramdev'.

It is also not correct that having regard to the fact that the property

situated at Sola having been given in favour of the respondents, they have

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acquired a vested right in the trade mark as has been urged before us or

otherwise. Respondents did not have any right over the trade mark. They

in fact, it will bear repetition to state, assigned the same in favour of the

appellant-Company. They have assigned the said trade mark and having

relinquished their right, Respondents, thus, now cannot fall back on Section

33 of the 1958 Act. It may be true that there exists a distinction between a

suit in a trade mark action against the whole world and a suit for

implementation of division of assets amongst the members of the family.

But, after the MOU was entered into the parties having separated ceased to

be members of a joint family. What was, thus, essential for determining the

right of the parties would be the terms of the MOU.

Registration of a trade mark and user thereof per se may lead to the

conclusion that the plaintiff has a prima facie case, however, existence

thereof would also depend upon the determination of the defences raised on

behalf of the respondents. The appellant has raised a triable issue. The

same by itself although may not be sufficient to establish a prima facie case

but in view of our findings aforementioned, we are satisfied that the

appellant has been able to establish existence of a legal right in itself and

violation of the registered trade mark on the part of the respondents. We

have also considered the comparable strength of the cases of the parties and

are of the opinion that the case of the plaintiff-appellant stands on a better

footing than the defendants-respondents.

A question as regards the matter relating to grant of injunction has

been dealt in S.M. Dyechem Ltd. v. Cadbury (India) Ltd. [(2000) 5 SCC

573] wherein upon noticing a large number of decisions including Colgate

Palmolive (India) Ltd. v. Hindustan Lever Ltd. [(1999) 7 SCC 1] as also the

subsequent distinction made in respect of the decision of the House of

Lords in American Cyanamid v. Ethicon Ltd. [(1975) 1 All ER 853], it was

stated :

"\005Therefore, in trademark matters, it is now

necessary to go into the question of "comparable

strength" of the cases of either party, apart from

balance of convenience.

In M/s. Transmission Corporation of A.P., Ltd. v. M/s. Lanco

Kondapalli Power Pvt. Ltd. [JT 2005 (10) SC 542], it was held :

"The interim direction ordinarily would

precede finding of a prima facie case. When

existence of a prima facie case is established, the

court shall consider the other relevant factors,

namely, balance of convenience and irreparable

injuries. The High Court in its impugned judgment

although not directly but indirectly has considered

this aspect of the matter when on merit it noticed

that the Appellant has raised a dispute as regard

payment of an excess amount of Rs.35 crores

although according to the Respondent a sum of

Rs.132 crores is due to it from the Appellant and

the Appellant had been paying the amount for the

last two years as per the contract.

Conduct of the parties is also a relevant factor. If

the parties had been acting in a particular manner

for a long time upon interpreting the terms and

conditions of the contract, if pending

determination of the lis, an order is passed that the

parties would continue to do so, the same would

not render the decision as an arbitrary one, as was

contended by Mr. Rao. Even the Appellant had

prayed for adjudication at the hands of the

Commission in the same manner. Thus, it itself

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thought that the final relief would be granted only

by the Arbitrator."

We also do not appreciate the conduct of the respondents. They were

aware of the rights under the MOU. They had all along been enforcing the

same. Legal defence were available to them under the 1958 Act.

Evidently, they filed a suit to scuttle the intended action on the part of the

respondents pursuant to the public notice dated 15.12.1998.

In P.M. Diesels Ltd. v. Patel Field Marshal Agencies & Others

[2001 PTC 20 (Del)], the High Court noticed the distinction between logo,

trade mark and trade name and was of the view that the defendants cannot

be permitted to use the trade name so as to defeat the other portion of the

order of injunction already passed against him. An injunction can also be

granted against the respondents to use the corporate name.

Relief by way of interlocutory injunction would be material in a suit

for infringement of trade mark. Balance of convenience, however, would

have a vital role to play.

We are not oblivious of the fact that respondents have been

manufacturing and carrying on business in the sale of spices under the

name 'Ramdev Masala' even during pendency of the suit. The learned

Trial Judge had made an attempt to strike the balance. The High Court,

however, had overturned a part of it having regard to the statutory interdict

contained in the Rules made under the Prevention of Food Adulteration Act

and Standards of Weights and Measures Act.

Kerly's Law of Trade Marks and Trade Names, Thirteenth Edition

states as under about the general test for grant of an interim injunction:

"In trade-mark infringement cases irreparable

damage, in this sense, is relatively easily shown,

since infringement may easily destroy the value

of a mark or at least nullify expensive advertising

in a way that is hard to quantify for the purposes

of an inquiry into damages. This has more

recently come to be referred to, in cases where the

defendant's conduct is not directly damaging but

merely reduces the distinctive character of the

claimant's mark, as "dilution"\005.

\005In particular, although it is usually

neither necessary nor appropriate to assess the

degree of probability of success which the

claimant's action has (provided that it is arguable,

and subject to the principle of American

Cyanamid that the merits may be resorted to as a

'tie-breaker' if the balance of convenience is very

even,) in trade mark and passing off cases, it is

very hard to avoid doing so, since the better the

claimant's case on the likelihood of deception

(frequently the major issue) the greater the harm

which he is likely to suffer. Accordingly, in

appropriate cases, where the state of the evidence

permits it, the court may seek to weigh up the

merits in deciding whether to grant interim

relief."

Thus, when a prima facie case is made out and balance of

convenience is in favour of the appellant, it may not be necessary to show

more than loss of goodwill and reputation to fulfil the condition of

irreparable injury. In fact, if the first two pre-requisites are fulfilled, in

trade mark actions irreparable loss can be presumed to have taken place.

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The expression "irreparable injury" in that sense would have

established injury which the plaintiff is likely to suffer.

In Mahendra & Mahendra Paper Mills Ltd. v. Mahindra & Mahindra

Ltd. [(2002) 2 SCC 147], this Court observed:

"23. The Bombay High Court in the case of

Kirloskar Diesel Recon (P) Ltd. v. Kirloskar

Proprietary Ltd. considered the scope of granting

injunction in a suit for infringement of a trade

mark under Section 106 of the Act by the use of

the mark "Kirloskar", held:

"The principle of balance of convenience applies

when the scales are evenly balanced. The existence

of the 1st appellant in each appeal is very recent

whereas the existence of the respondents belonging

to 'Kirloskar Group of Companies' has been for

over a period of 50 years. On their own showing,

the appellants are not using the word 'Kirloskar' as

trade mark but as part of trading style whereas the

respondents have not only acquired distinctiveness

and goodwill in the word 'Kirloskar' but it is even

the registered trade mark of the 1st respondent.

There is sufficient evidence on record to show that

the huge business is carried by 'Kirloskar Group of

Companies'.

There is nothing on record to show the extent of

the business of the appellants. The 2nd appellant

has throughout been aware about the business

reputation of the respondents and efforts of the

respondents in protecting their rights in the trade

marks as also of preventing others to use the word

'Kirloskar' as a part of the trading name or trading

style. By grant of the interim injunction in favour

of the respondents, the appellants are not prevented

from carrying on business without the word

'Kirloskar' forming part of the corporate name of

the 1st appellant in each appeal. In the facts of the

case, the respondents' reputation is likely to be

adversely affected if the appellants are not

prevented from using name of the 1st appellant in

each appeal. In the facts of the case, the balance of

convenience is not in favour of the appellants.

* * *

The real question in each case is whether there is

as a result of misrepresentation a real likelihood of

confusion or deception of the public and

consequent damage to the plaintiff. The focus is

shifted from the external objective test of making

comparison of activities of parties to the state of

mind of public in deciding whether it will be

confused. With the passage of time and reputation

acquired, the trade mark 'Kirloskar' has acquired

the secondary meaning and has become almost a

household word. The judgments relied upon by Mr

Kane pertain to the cases of one type of business

and not where variety of businesses have been

carried by the plaintiff and the defendant as in the

instant case. The business activities of the

respondents vary from pin to piano as borne out

from the object clauses of the memorandums of

association of the respondents. The appellants have

still to commence their business activities but as

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mentioned in the memorandums of association of

the 1st appellant in each appeal, some of the object

clauses therein overlap with the activities of

respondents and more particularly of Respondents

6 and 7."

APPELLATE COURT'S JURISDICTION TO INTERFERE WITH

ORDERS OF THE TRIAL JUDGE

We are not oblivious that normally the appellate court would be

slow to interfere with the discretionary jurisdiction of the trial court.

The grant of an interlocutory injunction is in exercise of

discretionary power and hence, the appellate courts will usually not

interfere with it. However, appellate courts will substitute their discretion

if they find that discretion has been exercised arbitrarily, capriciously,

perversely, or where the court has ignored settled principles of law

regulating the grant or refusal of interlocutory injunctions. This principle

has been stated by this court time and time again. [See for example

Wander Ltd. v. Antox India P. Ltd (1990) Supp SCC 727, Lakshmikant V.

Patel v. ChetanBhai Shah (2002) 3 SCC 65 and Seema Arshad Zaheer v.

MC of Greater Mumbai (2006) 5 SCALE 263]

The appellate court may not reassess the material and seek to reach a

conclusion different from the one reached by the court blow 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

exercise 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.

However, in this case the courts below proceeded on a prima facie

misconstruction of documents. They adopted and applied wrong

standards. We, therefore, are of the opinion that a case for interference has

been made out.

CONCLUSION

Our findings aforementioned, it goes without saying, are prima facie

in nature. We place on record that Mr. Nariman contended that there is

evidence to show the contrary intention of the parties in respect whereof a

large number of documents are available. Evidently respondents may

prove. No such document is, however, before us. If the respondents, at the

trial, could bring the same on record, evidently the court would be entitled

to draw its own inference.

We have differed with the findings of the courts below primarily on

the interpretation of the MOU. In that view of the matter, we are of the

opinion that in this case this Court would be justified to interfere with the

said findings. We are, however, not oblivious of the damages which may

have to be suffered by respondents herein in the event the suit of the

appellant is to be ultimately dismissed. We intend to protect the same also.

For the said purpose, we would take into consideration the terms of

the injunction granted by the Trial Judge that the respondents were entitled

to sell their products in the name of M/s. Ram Dev Masala only from the

seven outlets. The modification made by the High Court has already been

noticed by us.

We, in view of our findings aforementioned, direct:

(i) The respondents be restrained from using the trade mark

including the trade name 'Ramdev Masala' in any of their

products.

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(ii) They may, however, carry on their business in any other name

insofar as manufacturing of spices is concerned.

(iii) The appellant shall, as and when demands are made, supply

spices produced by it for retail sale thereof to seven outlets

belonging to respondents on usual terms, and in respect of such

articles on the labels/pouches, on the reverse thereof, the

following shall be mentioned in the minimum permissible size in

terms of the provisions of Weights and Measures Act and

Prevention of Food Adulteration Act:

"This product is manufactured and marketed by M/s. Ramdev

Masala (Arvindbhai Group) (Or M/s. Ramdev Exports

Arvindbhai Group) having no relationship whatsoever with

Ramdev Food Products Pvt. Ltd."

(iv) The appellant shall deposit a sum of Rs. 50 lakhs before the Trial

Court or furnish a bank guarantee for the said sum by way of

security.

(v) Despite pending applications for rectification before the Registrar

of Trade Marks, the final hearing of Civil Suit No. 828 of 2000

shall be expedited and the learned Trial Judge is hereby directed

to complete the hearing as expeditiously as possible preferably

within a period of six months from the date of communication of

this order.

For the reasons aforementioned, these appeals are allowed. The

respondents shall pay and bear the costs of the appellant of these appeals.

Counsel's fee assessed at Rs. 25,000/-.