Skip to content


Basha Vs. Shaik Hyder - Court Judgment

LegalCrystal Citation
SubjectIntellectual Property Rights
CourtKarnataka High Court
Decided On
Case NumberM.F.A. No. 1065 of 1982
Judge
Reported inILR1985KAR1093; 1985(1)KarLJ340
AppellantBasha
RespondentShaik Hyder
Appellant AdvocateV. Tarakaram, Adv.
Respondent AdvocateA.R. Srinivasarao, Adv.
DispositionAppeal dismissed
Excerpt:
tort -- passing off -- tort based on economic policy to protect economic asset -- even if trade mark is not registered it is property that needs protection and is basis for action for passing off -- considerations for grant of injunction.;(i) the relevant considerations in a suit of this nature are whether the defendants commodity carries with it an identical mark which resembles the trade mark of the plaintiff's commodity, that it is likely to deceive the customers and the defendant's trade is intended to encash or capitalise the good-will and reputation built up and earned by the plaintiff's commodity. these are the only relevant considerations and if prima facie plaintiff has established these considerations, the court should, by issuing an injunction, restrain the defendant from..........and marketing them in bangalore, anekal and hosur (tamilnadu). it is undisputed that plaintiff's trade mark is not registered.2. in this appeal, mr. tarakaram, made two submissions:(1) since the plaintiff's product is manufactured in anekal and in the body of the plaint be has not asserted about his market in bangalore, he is not entitled for injunction regarding the bangalore market ;(2) that the city civil court, bangalore has no jurisdiction to entertain the suit and grant injunction.3. so far as the question of jurisdiction is concerned, the said issue was not raised before the trial court and the impugned order is silent about this question. however, primafacie since the defendant resides and manufactures the product in bangalore, it cannot be said that court has no jurisdiction......
Judgment:

Murlidher Rao, J.

1. This is defendant's appeal, against the injunction granted in O.S. No. 89 of 1982, by the XI Additional City Civil Judge, Bangalore, vide order dated 3-4-1982.Respondent is a manufacturer of 'Beedi' called by its trade name 'Nehru Beedi' the production is done at Anekal, in Bangalore District, since February 1966. It is claimed that the commodity is very popular and has gained tremendous 'good will'. Plaintiff has obtained the requisite licence from the competent authorities. In January 1982, the plaintiff came across with the 'Beedi' with similar trade name, as his, and in same type of wrapper. On enquiry, he got the information that the commodity is manufactured by the defendent, who was manufacturing Beedies under the trade name 'Maharaja Beedi'. The name, wrapper and size of bundle was very much identical, customers could easily be deceived. The plaintiff therefore instituted the present suit for a passing off action. In the suit, he prayed for injunction, restraining the defendent from marketing his Beedies under the trade name 'Nehru Beedies'. The defendant contested the suit; among other grounds, it is urged that Court has no jurisdiction to try the suit. Defendent also filed hisobjections to the interim order of injunction. Court below, after hearing the parties, has made the injunction absolute. The effect of the injunction order is that the defendant isprohibited from manufacturing Beedies in the trade name of ' Nehru Beedies' and marketing them in Bangalore, Anekal and Hosur (Tamilnadu). It is undisputed that plaintiff's trade mark is not registered.

2. In this appeal, Mr. Tarakaram, made two submissions:

(1) Since the plaintiff's product is manufactured in Anekal and in the body of the plaint be has not asserted about his market in Bangalore, he is not entitled for injunction regarding the Bangalore market ;

(2) That the City Civil Court, Bangalore has no jurisdiction to entertain the suit and grant injunction.

3. So far as the question of jurisdiction is concerned, the said issue was not raised before the Trial Court and the impugned order is silent about this question. However, Primafacie since the defendant resides and manufactures the product in Bangalore, it cannot be said that Court has no jurisdiction. Further plaintiff's suit is for injunction restraining the defendant from manufacturing andmerchandising the 'Nehru Beedi' and the competent Court is the District Court. Plaintiff has a proprietary right in the 'Mark,' the goodwill and reputation of his product is at hake. Therefore the cause of action arises wherever the goods are sold or likely to be sold. Hence it is difficult to accept the contention that the Court below had no jurisdiction.

4. Few facts which are not in dispute are these :

(1) Plaintiff is an earlier manufacturer of 'Nehru Beedi' which is in market since 1966 ;

(2) Defendant has recently started this product :

(3) The name, size and packet, colour of wrapper are very much alike ; and

(4) Anekal is an adjoining taluka to Bangalore, distance being 35 K. Ms.

5. The plaintiff in para 9 of his plant has stated that the cause of action for the suit arose in Anekal taluk and other surrounding areas where the defendant has flooded the market with beedies bearing the impugned trade mark label and wrapper and has been passing off the same and in Bangalore, where the defendant carries on business of manufacturing beedies under the impugned trade name 'Nehru Beedi Works'.

6. The defendant had not denied this assertion. He con-tended that the plaintiff's trade mark is not registered with the Registrar of Trade Marks and as such the plaintiff cannot claim absolute right over the trade mark.

7. The plaintiff has brought this suit for an injunction restraining the defendant from passing off or enabling others to pass off and from selling beedies in the trade name 'Nehru Beedies'. The relevant consideration in a suit of this nature are whether the defendant's commodity carries with it an identical mark which resembles the trade mark of the plaintiff's commodity, that it is likely to deceive thecustomers and the defendant's trade is intended to encash or capitalise the good-will and reputation built up and earned by the plaintiff's commodity. These are the only relevantconsiderations and if prima facie plaintiff has established these considerations, the Court should, by issuing an injunction, restrain the defendant from effecting his sales in the market.

8.Mr. Tarakaram appearing for the appellant cited the decision in Firm Bhagwan Das Ramji Lai and another-v.-Watkins Major and Company, wherein the principle of passing off action is stated thus :

'.... As the trade mark for the protection of which the suit was brought has not been registered, the suit was in the nature of a passing off action, such as may be brought to assert the right of a person who uses a particular mark to prevent others using the same in such manner that there is a likelihood of the public being deceived into thinking that the goods sold by such others are goods made by the plaintiff In such a case, it is not necessary for the plaintiff to show that any member of the public has actually been deceived on account of the alleged infringement of his exclusive right in relation to the trade mark in question; it is sufficient that there is a strong probability of confusion occurring in the normal course of trade. Nor is it necessary that an actual attempt should he alleged on thedefendant's part to sell goods as those of the plaintiff; it is sufficient that the defendant should be shown to be selling goods which are of so similar a nature to those of the plaintiff that a purchaser might infer a common origin, and where goods such as chaff-cutting knives which are otherwise in all respects similar, also bear trade marks which are in material respects similar, the possibility of such an inference or of deception is obviously very clear. It is well settled that an action for passing off lies against a manufacturer who sends out goods which are liable to deceive.'

9. Though the said decision was cited in support of the contention as to the jurisdiction of the Court to try such a suit, since in the foregoing paragraphs, I have held that the Court below has the jurisdiction, the said ruling is of no assistance to the appellant. On the contrary, the abovequoted passage very much supports the plaintiff - respondent. The above decision clearly lays down the principle underlying an action for passing off.

10. The next ruling cited by Mr. Tarakaram was that of Chandra Bhan Dembla Trading, Delhi-v.- Bharat Sewing Machine Company, Bikaner. There, the case was regarding1. A.I.R 1947 Lahore 2892. ( : AIR1982Delhi230 )an infringement of trade mark and the grant of injunction. Since this is not a suit for infringement of trade mark, the said ruling is of no assistance to the appellant. The question still remains as to whether the plaintiff is entitled for an in-junction and if so, what are the relevant considerations that should prevail for grant of such an injunction.

11 The gist of passing off action has been explained by this Court in Nilgiri Dairy Farm-v.- S. A. Rathnasabhapathy At paragraphs 15 and 16, Nesargi, J. who spoke for the Bench has stated thus :

'The gist of a passing off action is that a person who has no right to pass off his goods as the goods of somebody else. An action for passing of is thus a generalised action and is enforceable in respect of registered as well as unregistered trade marks. One of the main questions would be whether the defendant's mark is identical with or shows deceptive resemblance to the plaintiff's mark. It is to be decided whether the mark used by the defendants on their goods is likely to deceive the customers into buying the defendant's goods as if they were the plaintiff's goods, because, the principle is that nobody is entitled to represent his goods as the goods of somebody else. This principle is solely based on deception and in order to succeed, deception, or a likelihood of deception, must be established. The issue in matters of passing off can be expressed as follows : Would the user of the defendants either the actual user proved in evidence or the proposed user conceded for the purposes of action, be likely to lead persons, either members of the trade or of the public, to suppose that the goods so sold were the product of the plaintiff's or that the business concerned in their production was the plaintiff's or was associated with the plaintiff's business ?

It is well settled that the identity of the plaintiff need not be known to the public in order to entitle him to an action for passing off. An action for passing off will lie where the public accepts the goods as the manufacture of another person other than the seller, though they do not know that other person by name at all.'

12. The trade mark used by a manufacturer is a property and it has got to be protected. This position is well 3. 1975(2) KLJ 505 stated by Shah J., in Consolidated Foods Corporation -v.-Brandon and Co., Private Ltd. In para 27, Learned Judge, after summarising the various aspects of the matter, has stated as follows :

'To summarise, therefore, a trader acquires a right of property in a distinctive mark merely by using it upon or in connection with his goods irrespective of the length of such user and extent of his trade. The trader who adopts such a mark is entitled to protection directly the article having assumed a vendible character is launched upon the market. As between the two competitors who are desirous of adopting such a mark, 'it is, to use familiar language, entirely a question of who gets there first.' ....Registration under the statute does not confer any new right to the mark claimed or any greater right than what already existed at common law and at equity without registration. It does, however, facilitate a remedy which may be enforced and obtained throughout the State and it established the record of facts affecting the right to the mark. Registration itself does not create a trade mark. The trade mark exists independently of the registration which merely affords further protection under the statute. Common law rights are left wholly un-affected. Priority in adoption and use of a trade-mark is superior to priority in registration.'

13. The above enunciation makes it clear that not with-standing the fact that a trade mark is not registered, the manufacturer gets a right to the property in the distinctive mark used by him and that can be the basis for action for passing off.

14. In the instant case, the plaintiff has asserted, which fact is denied that his product under the name 'Nehru Beedies' has been in the market since l966 and it has earned good-will reputation. The plaintiff has urged that taking advantage of the good-will and reputation which his product has earned, the defendant has started manufacturing beedies by using said name and thus exploiting the good-will and reputation which he has earned for the last 18 years. Question is whether in such a case, plaintiff had made out a case for grant of an injunction.

15. In this context, it has to be noted that the purpose of tort of passing off is to protect the commercial good-will, to ensure that peoples business reputations are not exploited. Tort in such a case is based on economic policy and what is sought to be protected is an economic asset which the plain-tiff has established. A Learned Single Judge of Delhi High Court had occasion to consider this aspect of the matter and this is how it is summarised by the Single Judge in Ellora Industries, Delhi -v.- Banarasi Dass Geola.

'It is an attempt to climb on another's good-will. Good-will is the result of the persons's owe labour and merit. One trader should not be allowed to usurp the fruits of a competitors's labour. Law will protect against intrusion by the rival upon the goodwill and other business values of another. This is 'reaping without sowing.' The Court will issue injunction in cases where the reaping without sowing elements is most brazen and damaging. One trader should not be expected to stand by and watch another reap the benefit of goodwill thati.e., as built up or expenditure that he has made. It takes years (sometimes generations) of patient and self-abnegating toil and investment to develop and gain the advantage of goodwill. It is the invasion of this property right of goodwill that constitutes passing-off. The true basis of the action is that the passing of injures the right of property being his right to the good-will of the business.

In recent times there have been extensions of passing off . It is an expanding business tort. The Courts have developed the concept of misappropriation. Law has thrown protection around all intangible elements of value ...These are 'property rights' and injunction can be issued against the in fringer. Predatory business practices and piracy of business rights are denounced by commercial morality. So does law confusing customers as to source, as in this case, is an invasion ofanother's property rights. The unfairness arises from the fact the purchasing public are likely to be misled. The protection is afforded not for the deceived customer but the rival trader ...'

16. On the question whether the injunction should be granted or not, a Bench of Delhi High Court in Century Traders -v.- Roshan Lal Duggar & Co., and others, has laid 5. : AIR1978Delhi250 6. : AIR1978Delhi250 down after reproducing the observation of the Supreme Court in Kaviraj Pandit Durga Dutt Sharma-v.- Navarathna Pharmaceutical Laboratories, thus :

'In our view the proof of actual damage or fraud is unnecessary in a passing off action whether the relief asked for his injunction alone or injunction, accounts and damages. If there is likelihood of the offending trade mark invading the proprietary right, a case for injunction is made out. We are fortified in coming to this conclusion by the observations in a bench decision of this Court in Prina Chemical Works-v.- Sukhdayal .'

17. Keeping in view the above legal position and well established principles. I am of the opinion that the plaintiff has made out a case that he is entitled for an injunction rest-raining the defendant from using the mark 'Nehru Beedies' in the markets of Anekal, Hosur and Bangalore.

18. Mr. Tarakaram contended that since the plaintiff is manufacturing his beedies in Anekal and he has not clearly asserted that he has a market in Bangalore, the injunction should be restricted only to Anekal and Hosur, and need not be extended to the market at Bangalore. This arguments has to be rejected for the simple reason that keeping in view the distance between Anekal and Bangalore, and the fact that the plaintiff has earned a reputation and goodwill in Anekal, which is an adjoining taluk of Bangalore. The plaintiff's apprehension that his goodwill and reputation may get spoiled cannot be said to be baseless. Further, the plaintiff being a manufacturer since 18 years, the possibility of his expanding the market to Bangalore, cannot be ruled out. If by action of the defendant, reputation and goodwill of the 'Nehru Beedies' are adversely affected, they not only affect plaintiffs prospective market in Bangalore but they may affect thisestablished market in Anekal and Hosur also. This is a relevant consideration for granting an injunction, since the plaintiff has got proprietary right in the trade mark.

19. For the foregoing reasons, I am of the opinion that the injunction granted by the Court below is quite legal and just and it does not call for interference. Therefore, the contentions raised by the appellant are liable to be rejected. Accordingly, this appeal fails and it is dismissed. The costs in this appeal shall be the costs in the cause and shall abide by the result of the suit.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //