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The National Bank of India Vs. the National Bank of Indore - Court Judgment

LegalCrystal Citation
SubjectIntellectual Property Rights
CourtMumbai
Decided On
Case NumberO.C.J. Suit No. 2042 of 1920
Judge
Reported inAIR1923Bom119; (1922)24BOMLR1181
AppellantThe National Bank of India
RespondentThe National Bank of Indore
DispositionSuit decreed
Excerpt:
.....of a newly formed company to do ? i should expect them to say: d) in the same way as the plaintiff bank's name was written, would the two names be like each other ? lalji objects on the ground that they were not concerned with any question of trade mark in this case. question-can you think of any name that would be more like the 'national bank of india' than the 'national bank of indore ? answer-'national bank of idar' would be such a name. question-would you adopt the word 'cosmopolitan' which also means all communities ? answer-i do not like that word. further, a bank known as the oriental bank of india had failed. i used the word 'national' in the name of the defendant bank as being representative of the people of indore question-you have selected the word 'national' because the..........of the plaintiffs' name and the defendants' name his evidence is as follows:-question-if your bank's name was written on it (exh. d) in the same way as the plaintiff bank's name was written, would the two names be like each other ?lalji objects on the ground that they were not concerned with any question of trade mark in this case.p.c. objection overruled.answer-both the names would be similar in appearance; but that would be so only in the case of one who does not know how to read and write.question-can you think of any name that would be more like the 'national bank of india' than the 'national bank of indore ?answer-'national bank of idar' would be such a name.question-is indore a nation ?answer-indore is a state.question-indore not being a nation, why did you select the word.....
Judgment:

Mulla, J.

1. This is a suit to restrain the defendants from carrying on business under the name. 'The National Bank of Indore, Limited' or any other name which is a colorable imitation of the name of the plaintiffs.

2. The plaintiffs are a limited company incorporated in the United Kingdom and have for the last fifty years and upwards carried on business of banking in India and other part of the world on a very extensive scale and have during such time obtained a very high reputation and earned the confidence of all classes of the community in India and in other places. The plaintiffs have several branches in India and other places of which a list is given in Ex. G. The plaintiff bank is an Exchange Bank and besides the usual banking business it imports and sells gold bars stamped with the name 'National Bank of India' in English as well as in the vernacular of the place where the branches of the plaintiff bank sell bar gold (see Ex. D). These bars are known as the National Bank bar gold and they are quoted as high as English bar gold and higher than Bombay Mint gold (see Ex. F.)

3. The defendant bank was registered in Bombay in March 1920 as a private limited company having for its objects, amongst other things, the carrying on of all kinds of banking business in Bombay and such other parts of the world as the directors may determine including the buying and selling of bullion and specie, and the buying, selling, melting and refining of metals and manufacturing products thereof for commercial purposes (see Ex. B). The office of the defendant bank is within the Fort of Bombay. The defendant bank has not hitherto a single pie in cash by way of capital nor has it commenced its business. The defendants are awaiting the decision of this suit, as stated by Mr. Parekh, one of the directors of the defendant bank, for starting their business.

4. The plaintiffs' case is that the name of the defendants is a colorable imitation of the plaintiffs' name and is calculated to deceive ordinary persons and to induce them to do business with the defendants under the supposition that they were dealing with the plaintiffs and that serious injury will result to the plaintiffs if the defendants are allowed to use the name adopted by them and they claim that the defendants may be restrained by an injunction from carrying on business under the name under which the defendants have been registered or under any other name which is a colorable imitation of the name of the plaintiffs.

5. The defendants have put in their written statement in which they deny that the name adopted by them is a colorable imitation of the plaintiffs' name or that it is calculated to deceive ordinary persons as alleged in the plaint. They say that there was a large internal trade in cotton seeds, piece-goods and other commodities in Indore, and that the defendant company was formed principally with a view to finance merchants carrying on business in Indore, and that they adopted their name as a descriptive name. They deny that any serious injury or any injury at all will result to the plaintiff bank if they are allowed to use the name adopted by them.

6. The principles by which this case must be decided are well established. The fundamental principal is that a person shall not trade under a name so closely resembling that of the plaintiff as to be mistaken for it by the public: Hendriks v. Montagu (1881) 17 Ch. 638 in other words, that a person shall not carry on his business in such a way as to represent that his business was the business of another person: Merchant Banking Company of London v. Merchants' Joint Stock Bank (1878) 9 Ch. D. 560. The question to be determined in cases of this description is whether there is such a similarity between the two names as that the one is in the ordinary course of human affairs likely to be confounded with the other: Hendriks v. Montagu (1881) 17 Ch. D. 638. It is not necessary to prove that the defendants in taking the name complained of by the plaintiffs had any fraudulent intent Ibid, p. 651. It is enough if the plaintiffs prove that the act of the defendants in assuming the name complained of is an injury to the plaintiffs' rights : North Cheshire and Manchester Brewery Company v. Manchester Brewery Company [1899] A.C. 83 On appeal, from S.C. in [1898] 1 Ch. 539. There is no question in such cases of property or monopoly in the name. The principle upon which the cases on this subject proceed is not that there is property in the word, but that it is a fraud on a person who has established a trade and carries it on under a given name with some other person who assumes the same name or the same name with a slight alteration in such a way as to induce persons to deal with him in the belief that they are dealing with the person who has given a reputation to the name: Lee v. Haley (1869) L.R. 5 Ch. App. 155 Hendriks v. Montagu (1881) 17 Ch. D. 638. The principles enunciated by the Earl of Halsbury L.C. in the North Cheshire Brewery's case, referred to above, have a material bearing on the present case. In that case the Manchester Brewery Company was the plaintiff. The plaintiff company had carried on business under that name for years. The defendant company bought an old business called 'The North Cheshire Brewery Ltd.' and then got themselves incorporated and registered under the name of 'The North Cheshire and Manchester Brewery Co. Limited.' The plaintiff company complained that the name of the defendant company was calculated to induce the belief that the plaintiff company had ceased to carry on business as a separate company and that the defendant company was an amalgamation of the plaintiff company and the North Cheshire Brewery Limited, and it sued the defendant company for an injunction. Byrne J. refused the injunction, but the Court of Appeal reversed the judgment and granted the injunction. The judgment of the Court of Appeal was upheld by the House of Lords. In the course of his speech the Lord Chancellor said: [1899] A.C. 83.

I have no complaint to make of their (counsel) being too long or too elaborate; but the truth is, that when one comes to see what the real question is, it is in a single sentence. Is this name so nearly resembling the name of another firm as to be likely to deceive That is a question upon which evidence of course might be given, as to whether or not there was another brewery either in the one place or in the other, or whether there were several breweries nearly resembling it in name; what the state of the trade was, and whether there was any trade name: all those are matters which are proper to be dealt with upon evidence; but upon the one question which your Lordships have to decide, whether the one name is so nearly resembling another as to be calculated to deceive, I am of opinion that no witness would be entitled to say that, and for this reason : that that is the very question which your Lordships have to decide.

7. Much to the same effect are the observations of Lord Cozens-Hardy M.R. in Ewing v. Buttercup Margarine Company, Limited [1917] 2 Ch. 1. In that case the plaintiff carried on business under the name of 'The Buttercup Dairy Company.' The plaintiffs' business Consisted in selling butter, margarine, cream, condensed milk etc. After some years the defendant company-The Buttercup Margarine Company Limited-was incorporated as a private company. The memorandum of association of the defendant Company authorized trade in milk, cream, butter, margarine, etc. In confirming the injunction granted by Astbury J. the Master of the Rolls said (p. 10):

In a case like that, where the plaintiff is the owner of a business which has been established since 1904 and has a turnover of half a million a year, and must be regarded as an old-established business none the less because its actual sphere of operations is mainly in Scotland and the North of England, What should I expect the defendants as honest men or honest representatives of a newly formed company to do I should expect them to say: 'We are very sorry; we were not aware of your existence in Scotland, but as you object to our name we will change it so as not in any way to interfere with you,' Instead of doing that they assert their right to use the name and file a mass of affidavits in support of their claim to do what they have threatensd and continued to do; and they seek to justify their name on the ground that the arm of the Court is not long enough to reach a defendant who takes a name similar to that of the plaintiff, unless it can be shown that such name is calculated to deceive in the sense that a person desiring to be a customer of the plaintiff is induced thereby to become a customer of the defendant. And they say that there can be no deception here because they are wholesale people while the plaintiff is a retailer, that it is true that they have the fullest possible power under the memorandum and articles of association to carry on a retail business, but that at the present moment they have no such intention. I should be very sorry indeed if the jurisdiction of the Court should be regarded as so limited... I know of no authority, and I can see no principle, which withholds us from preventing injury to the plaintiff in his business as a trader by a confusion Which will lead people to conclude that the defendants are really connected in some way with the plaintiff or are carrying on a branch of the plaintiff's business.

8. Having stated the principles by which the decision of this case must be governed, I proceed to ascertain their bearing on the particular facts of this case. The defendant company was registered in March 1920. On June 14, 1920, the plaintiffs wrote to V.I. Parekh, Vasanji Bhagwandas and Abubakar Jusub, the three signatories to the Memorandum of Association of the defendant company, complaining that the name adopted by the defendant company was calculated to deceive, and demanding an immediate undertaking not to do any business in that name. To the said letter Parekh replied on June 19, in which he denied that the two names were similar and said that the bank intended to carry on business in vernacular and to locate the head office outside the Fort of Bombay 'more especially to avoid the ambiguity erroneously originated and the meaning of which is misconstrued by you.' This was followed by another letter from Parekh on June 24, in which he stated that he was prepared to have the head office of the company outside Bombay. It seems that thereafter there was an interview between the plaintiffs' attorneys and Parekh at which the plaintiffs insisted upon the name of the defendant company being changed. On July 10, Parekh wrote to the plaintiffs' attorneys stating that the words 'National' and 'Indore' were both indispensable and that it was extremely inconvenient to change the name. He stated that the company was primarily floated in the interests of the residents of all classes of the Indore State, and that any change in the name was likely to lessen the importance and usefulness of the concern, The plaintiffs then brought the present suit on August 6.

9. The following issues were raised at the trial of the suit :-

(1) Whether the defendants' name is a colorable imitation of the plaintiffs' name and is calculated to deceive as alleged in para 3 of the plaint; and

(2) whether the plaintiffs are entitled to any relief, and, if so, what ?

10. On behalf of the plaintiffs evidence was given by brokers all in a large way of business. They deposed to the confusion likely to arise from the similarity of the two names; likelihood of the letters meant for one bank being received by the other, and the gold bars of the defendant bank being mistaken for those of the plaintiff bank. They also said that the plaintiff bank was known as National Bank and that the bar gold sold by the plaintiff bank was known as the National Bank bar gold. They all said that the similarity of the two names was so great that the use by the defendants of the name 'National Bank of Indore' would have the effect of misleading people into supposing, when they were in truth dealing with the defendants, that they were dealing with the plaintiffs. The plaintiffs also exhibited several letters addressed to them as 'National Bank' (Exh. E). Exh. D is a specimen of gold bars sold by the plaintiff bank.

11. The only witness called for the defendants was Mr. Parekh Assistant Manager of the Bombay branch of the Bank of Morvi, at Pydhowni. In his examination-in-chief he said that he had been to Indore and that he had ascertained that wheat seeds and cotton were exported from Indore, and that the object of assuming the name 'National Bank of Indore' was to finance the export trade of Indore. He also said that Vasanji Bhagwandas was doing some work in Bombay for H.H. the Maharajah of Indore, the work being to send articles which His Highness privately wanted, and that he knew some merchants at Indore. He further said that the defendants had no present intention of dealing in gold bars as the capital of the company was rupees five lacs only, but that if the capital increased the defendants would deal in gold bars.

12. In his cross-examination it turned out that Parekh was in the employ of the Indian Specie Bank as inspector, and that in that capacity he had been to Indore to inspect the work of the branch of that Bank at Indore once in 1911 and again in 1916. He said that those were the only two occasions on which he went to Indore. He also admitted in his cross-examination that Vasanji Bhagwandas had ceased to do any work for H.H. the Maharajah of Indore about a year ago. As regards the similarity of the plaintiffs' name and the defendants' name his evidence is as follows:-

Question-If your bank's name was written on it (Exh. D) in the same way as the plaintiff bank's name was written, would the two names be like each other ?

Lalji objects on the ground that they were not concerned with any question of trade mark in this case.

P.C. objection overruled.

Answer-Both the names would be similar in appearance; but that would be so only in the case of one who does not know how to read and write.

Question-Can you think of any name that would be more like the 'National Bank of India' than the 'National Bank of Indore ?

Answer-'National Bank of Idar' would be such a name.

Question-Is Indore a nation ?

Answer-Indore is a State.

Question-Indore not being a nation, why did you select the word 'National'?

Answer-Because the word 'National' represents all communities, Hindus, Parsis, Mahomedans etc.

Question-Would you adopt the word 'Cosmopolitan' which also means all communities ?

Answer-I do not like that word.

Question-What about the word 'Oriental'? Would you accept it ?

Answer-No. The expression 'Oriental' does not include all races. Besides, the expression 'Oriental' savours of something old. Further, a bank known as the Oriental Bank of India had failed. I used the word 'National' in the name of the defendant bank as being representative of the people of Indore

Question-You have selected the word 'National' because the National Bank is an extremely well known Bank in Bombay.

Answer-It is not so. I know that gold bars are sold in small bits by dealers.

Question-Assume a gold bar bearing the name of National Bank of Indore is sold by the defendant bank. Assume further that a dealer who buys the bar from you cuts off the piece bearing the letters 'ore'; there is nothing then to prevent you from showing the rest of the bar and selling it as the bar of the National Bank of India; is there ?

Answer-No merchant would practise such a fraud. If he wanted to commit a fraud, he could.

A person who buys a piece of gold would get itassay ed before it is bought. He would do it if he was not satisfied with the name.

No man would ever buy gold without assaying it.

Question-Do you mean to say that any man buying gold would get it assayed before buying it ?

Answer-Not necessarily.

If the words 'ore' were cut off and the rest of the piece sold, it is possible that the piece sold might be passed off as a piece of the gold bar of the National Bank of India.

13. Mr. Parekh also said that the defendant bank had not done any business and the reason which he gave was that as the plaintiffs had taken objection to the defendants' name he thought that the name of the defendant company might have to be altered and he did not therefore get any papers printed and no progress was made.

14. I was not at all impressed with the demeanour of Mr. Parekh in the witness box. In the course of his cross-examination he fenced with several questions and he did not give direct answers to the questions put to him until pressed by Mr. Binning. I decline to believe that the reason why he selected the name 'National Bank of Indore' was to finance the export trade of Indore. I also decline to believe that either he or Vasanji Bhagwandas has any such connection with the merchants of Indore as it was sought to make out. It is significant that Vasanji Bhagwandas was not called as a witness to depose to his alleged connection with the merchants of Indore. Mr. Parekh was long connected with the Indian Specie Bank which dealt in gold bars. He is now connected with the Bank of Morvi which as the succcessor of the National Financing Corporation deals in bar gold. Abubakar Jusub, another promoter of the defendant bank, deals in bar gold. It seems to me that the defendant company has been formed with the object principally of dealing in gold bars. No doubt its capital is only rupees five lacs and the business may not at first be large, but it may increase with the increase of capital (see as to this, The Standard Bank of South Africa Limited v. The Standard Bank, Limited (1909) 25 T.L.R. 420. I am also inclined to think that the object of the defendants in selecting the name 'National Bank of Indore' was to attract and appropriate as much of the business of the plaintiff company which the defendants could lay hold of. The conclusion to which I have come is that the name adopted by the defendant bank is so similar to that of the plaintiff bank that it is calculated to deceive ordinary persons and to induce them to do business with the defendant company under the supposition that they were dealing with the plaintiffs.

15. It was contended for the defendants that the evidence of the plaintiffs' witnesses showed that there was no likelihood of deception as regards intelligent persons and persons who knew how to read and write and that therefore the plaintiffs were not entitled to any relief. But the question in this class of cases is not whether the intelligent section of the public is likely to be deceived but whether the public at large is likely to be deceived. Further, as observed by Sir George Jessell in The Guardian Fire and Life Assurance Company v. The Guardian and General Insurance Company (Limited) (1880) 50 L.J. Ch. 253the public are careless, and it is no use supposing that if they paid a very moderate attention to names they would see they were not the same, but only similar.' The plaintiffs have branches in several parts of India outside the Presidency towns. It may be that the chances of deception in Presidency towns are not great, but this cannot be said of other places. Again, the plaintiffs have no branches in places like Surat, Broach, Ahmedabad etc. If the defendants opened branches in those places, it was, I think, highly probable that the public of those places would be deceived having regard to the close similarity between the two names.

16. It was also argued for the defendants that the Court had no power in this suit to enquire whether, if the defendant company sold gold bars bearing its name on them, they were likely to be confounded with the gold bars of the plaintiff bank, the reason given being that to allow such an enquiry would be to convert the suit into a trade-mark suit. But as stated by Lord Justice James in Levy v. Walker (1879) 10 Ch. D. 436 'the sole right to restrain anybody from using any name that he likes in the course of any business he chooses to carry on is a right in the nature of a trade-mark'. Moreover, such an enquiry was deemed to be quite legitimate in the North Cheshire Brewery's case referred to above. In fact, Byrne J. who first tried that case based his judgment on the fact that there was no evidence before him that any customer of the plaintiff company had bought beer of the defendant company under the impression that it was beer made by the plaintiff company, and refused to grant the injunction prayed for [1898] 1 Ch. 539 540. Dealing with this Lindley M.R. said that that was only one method of deception, and that Byrne J. ought not to have rested his judgment on that aspect of the case alone [1898] 1 Ch. 539. But it was nowhere suggested that the Court should not in a case of that description deal with the question whether the goods of the defendant company were likely to be passed off as the goods of the plaintiff company. Further, the enquiry held in the present case as to the likelihood of the defendants, gold bars when put upon the market being passed off as the National Bank bar gold was not outside the scope of the issues raised in the case. But even if it was, I have no hesitation in holding that the two names are so similar as to be calculated to deceive the public even as regards the other departments of the business of the plaintiff bank.

17. Lastly, it was urged that there Were several banks in India whose name included the words 'National Bank' (Ex. No. 2) and that the plaintiffs had never objected to those names. But none of those banks deal in gold bars; in any event no evidence was given that they do so though the attention of the defendants' counsel was specifically directed to this point.

18. I do not entertain any doubt that the names of the plaintiff bank and the defendant bank are so similar as to be calculated to deceive, and I pass judgment for the plaintiffs restraining the defendants from carrying on business under the name 'The National Bank of Indore, Limited' or under any other name which is a colorable imitation of the name of the plaintiffs. The defendants must pay the plaintiffs' costs of this suit.


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