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Mohd. Rafiq Mohd. Shafiq Vs. Modi Sugar Mills Ltd., Modinagar - Court Judgment

LegalCrystal Citation
SubjectIntellectual Property Rights
CourtDelhi High Court
Decided On
Case NumberCivil Revision Appeal No. 407 of 1968
Judge
Reported inILR1970Delhi246
ActsTrade and Merchandise Marks Act, 1958 - Sections 111; Code of Civil Procedure (CPC), 1908 - Sections 151
AppellantMohd. Rafiq Mohd. Shafiq
RespondentModi Sugar Mills Ltd., Modinagar
Advocates: D.D. Chawla and; N.K. Anand, Advs
Excerpt:
.....act (1958) - section 111--rectification proceedings--initiation of--action for infringement of trade mark--stay of infringement proceedings--when to be ordered--civil p.c. s. 151. ; that policy of law is that proceedings for rectification must be decided by the high court in separate proceedings and the action for infringement of trade mark based on the claim of a registered trade mark being borne on the trade mark register must necessarily be dependent on the result of rectification proceedings and for this reason, an elaborate procedure has been prescribed for granting stay of the suit in the event of the pendency or anticipation of the institution of proceedings for rectification. however, the statutory provisions have taken a good care to see that the claim for rectification..........the suit, for injunction and other reliefs arising out of an alleged infrigngement of a registered trade mark of the plaintiffs respondents under section 111 of the trade and merchandise marks act of 1958. (hereinafter referred to as the trade marks act).(2) the brief facts of the case are that on 26th march, 1962, the plaintiffs instituted a suit in the court of the district judge, delhi against the defendants for a permanent injunction, rendition of accounts and damages on the allegations that the plaintiffs were manufacturing and selling lanterns and torches under their trade mark 'sun brand' which was registered as no. 164198 on 19th may, 1961 onwards and that the defendants had started manufactur may 1954 and it had been renewed for a further period from 19th ing and selling.....
Judgment:

B.C. Misra, J.

(1) This revision petition under section 115 of the Code of Civil Procedure has been filed by the defendants and is directed against the order of the Additional District Judge dated 1st of August, 1968 by which the learned Judge declined to stay the suit, for injunction and other reliefs arising out of an alleged infrigngement of a registered trade mark of the plaintiffs respondents under section 111 of the Trade and Merchandise Marks Act of 1958. (hereinafter referred to as the Trade Marks Act).

(2) The brief facts of the case are that on 26th March, 1962, the plaintiffs instituted a suit in the Court of the District Judge, Delhi against the defendants for a permanent injunction, rendition of accounts and damages on the allegations that the plaintiffs were manufacturing and selling lanterns and torches under their trade mark 'SUN BRAND' which was registered as No. 164198 on 19th May, 1961 onwards and that the defendants had started manufactur May 1954 and it had been renewed for a further period from 19th ing and selling lanterns under the trade mark 'SUNSHINE' which was a colourable immitation of the plaintiffs' registered trade mark and the plaintiffs alleged that the defendants had infringed their trade mark and were also passing off their good as those of the plaintiffs and thereby causing loss and injury to the plaintiffs.

(3) The defendants contested the suit of the plaintiffs on merits and raised a number of objections and they denied their liability in the action. It is, however, significant that the defendants did not raise any plea to the effect that the registered trade mark of the plaintiffs had been borne on the register wrongly and that the same had to be expunged under section 56 of the Trade Marks Act.

(4) After the replication had been filed, the Court on 18th December, 1962 framed issues on the merits of the case, but no issue had been framed with regard to the validity of the plaintiffs' trade mark on the register.

(5) On 21st January, 1963 the defendants moved an application under section 111 of the Trade Marks Act read with Order 14, Rule 5 of the Code Civil Procedure. In this application, the defendants challenged the validity of the plaintiffs' trade mark and intimated to the Court their intention to institute rectification proceedings with regard to the trade mark in dispute in the High Court under sections 107 and 108 of the Act and they prayed that an issue may be framed and the proceedings be stayed for three months to enable the defendants to move the High Court. This application was opposed by the plaintiffs. Ultimately, by order dated 11th April, 1963, the learned District Judge held that there was no prima jacie tenable case for stay of the proceedings under section 111 of the Act to enable the defendants to challenge the validity of the trade mark and the learned Judge declined to frame an issue. The learned District Judge adjurned the case for recording of the evidence on 25th September, 1963.

(6) However, the defendants on their own filed a petition under section 107 of the Trade Marks Act in the Circuit Bench of the High Court at Delhi for rectification of the register and expunging of the registered trade mark of the plaintiffs. This application was filed on 24th September, 1963 and registered as C. O. No. 51-D of 1963. Having filed the rectification proceedings, the defendants moved another application before the learned District Judge on 24th September, 1963, this time under section 151 of the Code of Civil Procedure in which the defendant prayed that the suit may be stayed in exercise of inherent lurisdiction of the Court, since the subject-matter in dispute in the High Court in rectification proceedings was identical with the question at issue before the learned District Judge and the ends of justice warranted stay so as to avoid conflict of decisions and inconvenience and expenses of the parties. This application was opposed by the plaintiffs and was disposed of by the learned District Judge by order dated 11th November. 1963 and the learned Judge held that by his previous order of 11th April, 1963 he had declined stay under section 111 of the Trade Marks Act and the ground urged in the fresh application under section 151 of the Civil Procedure Code were the same and that no fresh ground had been made for re-opening the question of stay and that no identical question had been involved in the two proceedings. The application was accordingly dismissed and the learned Judge also observed that he had held that the plea of invalidity of the trade mark had not been raised by the defendants at the time the issues had been framed. Thereafter, the suit proceeded to trial and some evidence was recorded on behalf of the plaintiff in February, 1964 as well as on behalf of the defendants in June, 1968.

(7) Aggrieved by the order of the learned District Judge dated 11th November, 1963, the defendants filed an appeal (F.A.O. No. 99-D of 1964) in the High Court which came up for hearing before Gurdev Singh J. and was disposed of by his order dated 2nd February, 1965. It may be mentioned that no appeal had been filed against the earlier order of the learned District Judge dated 11th April, 1963 by which he had dismissed the application under section 111 of the Trade Marks Act and the appeal was directed against the later order of the learned District Judge refusing stay under section 151 of the Code of Civil Procedure. The contention of the defendants prevailed in the High Court and Mr. Justice Gurdev Singh held that on a perusal of section 111 of the Trade Marks Act, it appeared that once the court seized of a suit for infringement to trade mark was apprised of the fact that proceedings for rectification of the register in relation to the plaintiff's trade mark had been instituted before the Registrar of the High Court, the District Court was bound to stay the suit pending final disposal of the proceedings for rectification and the learned Judge allowed conversion of the appeal into a revision in exercise of his powers under section 115 of the Code Civil Proceedure, set aside the impugned order of the District Judge and ordered that the suit shall remain stayed till the disposal of the rectification application under section 107 of the Trade Marks Act registered as C.O. 51-D of 1963.

(8) C.O. 51-D of 1963 finally came up for hearing before Jagjit Singh J. who by his order dated 11th December, 1967 dismissed the same and held that the contentions of the defendants (petitioners before his lordship) did not have any substance and that the registered trade mark in dispute was not liable to be expunged and no rectification of the register was called for. The petition was dismissed with costs and the order regarding stay of the proceedings in the suit was vacated.

(9) Aggrieved by the aforesaid judgment, the defendants who are petitioners before me, filed F.A.O. (o.s) No. 32 of 1968 before a Division Bench of this court which had been filed on 12th July, 1968 and was admitted by the Division Bench. With regard to stay which came up for hearing on notice to the opposite party, the learned counsel for the defendants made a statement that he would pursue his application for stay in revision against the order of the learned Additional District Judge, mentioned hereinbelow by which he had refused stay of the proceedings and as such his application for stay in the appeal before the Division Bench was dismissed as incompetent. The said appeal is still pending for hearing.

(10) After the dismissal of the rectification proceedings by the learned single Judge, the defendants again moved the lower court for stay of the proceedings by an application dated 25th July, 1968 moved under section 111 of the Trade Marks Act in which they mainly relied on the order of Gurdev Singh, J. and they submitted that since rectification proceedings were still pending before a Division Bench of the High Court, it could not be said that C.O. 51-D of 1963 had been finally disposed of and as such they were entitled of the grant of stay of the suit. The respondents contested the application and urged that the order of Gurdev Singh J. was only an interim order and the matter had been finally concluded by the judgment of Jagjit Singh, J. who had vacated the stay order. The learned Additional District Judge, by the impugned order, repelled the contentions of the defendants and declined to stay the suit and feeling aggrieved by this order, the defendants have come up in revision before me.

(11) The learned counsel for the defendants petitioners has urged that on a true construction of section 111 of the Trade Marks Act, as soon as the Court has been apprised of the. fact that proceedings for rectification of the register had been instituted and were pending, it was bound to grant stay of the suit since the policy of the law was that the progress of the action for infringement of trade mark fundamentally depended on the continuance of the registered trade mark and, thereforee, its removal from the register was necessarily bound to affect the action turn infringement and so the same must be stayed. The second contention of the learned counsel is that the judgment of Gurdev Singh J. dated 2nd of February, 1963 had been delivered between the same parties in the same action and the same had become final and conclusive between them and the same was binding on the Court below and the order therein granting stay till the decision of the rectification proceedings embraced within it is continuance till conclusion of the proceedings at the stage of appeal before the Division Bench.

(12) In reply, the learned counsel for the respondents has contended that the order of the learned District Judge dated 11th April, 1963 passed under clause (ii) of section 111 had become final and so no stay of the proceedings could be granted under section 111. Consequently the case was not covered by clause (J) of the said section. With regard to the second contention, the learned Counsel submits that the order of Gurdev Singh J. was only interlocutory and it came to an end with the decision of C.O. 51-D of 1963 and the same was superseded by the order of Jagjit Singh J. vacating the stay and the said order does not mention or cover F.A.O. 32 of 1968, during the pendency of which the suit is sought to be stayed. The learned' counsel also submits that under the facts and circumstances of the case any discretion in grant of stay ought to be exercised against the defendants.

(13) Section 111 of the trade and Merchandise Marks Act of 1958 reads as follows :-

'111.Stay of proceedings where the validity of registradition of the trade mark is questioned, etc. (1) Where in any suit for the infringement of a trade mark

(A)the defendant pleads that the registration of the plaintiff's trade mark is invalid; or

(B)the defendant raises a defense under clause (d) of sub-section (1) of section 30 and the plaintiff pleads the invalidity of the registration of the defendants' trade mark;

the Court trying the suit (hereinafter referred to as the Court) shall

(I)if any proceedings for rectification of the register in relation to the plaintiff's or defendants trade mark are pending before Registrar or the High Court, stay the suit pending the final disposal of such proceedings;

(II)if no such proceedings are pending and the court is satisfied that the plea regarding the invalidity of the registration of the plaintiff's or defendants's trade mark is prima facie tenable, raise an issue regarding the same and adjour the case for a period of three months from the date of the framing of the issue in order to enable the party concerned to apply to the High Court for rectification of the register.

(2)If the party concerned proves to the court that he has made any such application as is referred to in clause (b) (ii) of sub-section (1) within the time specified therein or within such extended time as the court may for sufficient cause allow, the trial of the suit shall stand stayed until the final disposal of the rectification proceedings.

(3)If no such application as aforesaid has been made within the time so specified or within such extended time as the Court may allow, the issue as to the validity of the registration of the trade mark concerned shall be deemed to have been abandoned and the court shall proceed with the suit in regard to the other issue in the case.

(4)The final order made in any rectification proceedings referred to in sub-section (1) or sub-section (2) shall be binding upon the parties and the court shall dispose of the suit conformably to such order in so far as it relates to the issue as to the validity of the registration of the trade mark.

(5)The stay of a suit for the infringement of a trade mark under this section shall not preclude the court making any interlocutory order (including any order granting an injunction, directing accounts to be kept, appointing a reciever or attaching any property), during the period of the stay of the suit'.

(14) 'SECTION 56 of the Act lays down substantive provisions for rectification of the register and section 107 prescribes the procedure and the jurisdiction of the High Court for the purpose and section 108(3) provides for an appeal to a Division Bench of the High Court against the order of the Single Judge in rectification proceedings.

(15) On a perusal of the aforesaid provisions of law, I am of the view that section 111 of the Act does not apply to the facts and circumstances of this case. It is no doubt true that the policy of the law is that proceedings for rectification must be decided by the High Court in separate proceedings and action for infringement of trade mark based on the claim of a registered trade mark being borne on the trade marks register must necessarily be dependant on the result of the rectification proceedings and for this reason, an. elaborate procedure has been prescribed for granting stay of the suit in the event of the pendency or anticipation of the institution of proceedings for rectification. However, in my opinion, the statutory provisions have taken a good care to see that the claim for rectification, which necessitates stay of the suit, must be prima fade tenable and it is not the obiect of the law that in every action for infringement of trade mark, stay should be .granted, as soon as the defendant raises a howsoever false plea of the invalidity of the trade mark and rectification of the register. Any other construction will lead to the bad result that every defendant would be entitled to obtain stay of action for infringement by simply raising the plea or by in fact subsequently instituting proceedings for rectification, however, frivolous they may be The statute provides for two modes of stay of the suit. In the first place, if the proceedings for rectification are already pending and the plaintiff, during its pendency, institutes a suit for infringement of the registered trade mark, the Court is bound to stay the suit pending final disposal of such proceedings. The word 'pending', where it occurs for the first time, in the relevant provision has reference to the pendency of the rectification proceeding on the date of the institution of the suit and it has no reference to. any future proceedings for rectification under taken during the continuance of the suit. The reason for this provision is not far to seek. If the title of the plaintiff to the registered trade mark is itself in dispute, he cannot be allowed to rush to the Court in anticipation of clearance of the cloud on his title and obtain relief in an action for infringement while his title is in jeopardy. This has however, no reference to the stage when the infringement action has been intiated and rectification proceedings are not pending on the date of the suit but are instituted subsequently. Should the defendant still desire to question the validity of the trade mark during the pendency of the action for infringement of trade mark, clause(ii) requires him to raise an issue by his pleadings and if the Court finds that the plea of the defendant regarding invalidity of the registration of the trade mark in dispute is prima facie tenable, then the Court adjourns the suit for a specified period to enable, the party to institute rectification proceedings and if he fails to do so the issue is deemed to be abandoned and the Court trying the infrigement action, presumes the trade mark to be valid and does not pronouce upon its validity but in case the rectification proceedings re- suit in an order in favor of the party, he is entitled to have the infringement action decided accordingly. Ample safeguard is also provided for passing interlocoutory orders during the period the infringement action remains stayed. In my opinion the defendant in an infringement action can obtain stay of the suit only either by having rectification proceedings initiated prior to the institution of the suit under clause (i) or by moving the Court in infringement action under clause (ii) and going through the procedure prescribed therein. Under the scheme of section 111 and other provisions of the Trade Marks Act, the defendant to an infringement action is otherwise not entitled to grant of stay as of right. It is entirely a different matter if the trial Court, in exercise of its powers under section 151 of the Civil Procedure Code, or the High Court dealing with the rectification proceedings should think fit for grant stay of the action, but the defendant does not have any statutory right of his own to obtain it.

(16) On the facts of this case, I find that the rectification proceedings of the defendants were not pending on the date of the institution of the suit and so they were not covered under clause (i) and were not entitled to grant of stay. So far as clause (ii) is concerned, the defendants actually moved the trial Court which rejected their application for stay holding that their plea was prima facie not tenable and this order of the trial Court dated 11th April, 1963 has become final and binding on the parties. As a result, I have to repel the first contention of the learned counsel for the defendants-petitioners.

(17) The second contention of the learned counsel for the petitioners is of great weight. Gurdev Singh J., by his order dated 2nd February 1965 held that the institution of rectification proceedings in the High Court on 24th September, 1963 entitled the defendants to obtain stay of the suit till the disposal of the said proceedings. The said order has again become final between the parties and would have to be given effect to. I agree with the learned counsel for the petitioners that derision of C.O. 51-D of 1963 is not finally concluded by the order of Jagjit Singh J. but the appeal there from is a continuation of the, proceedings and the proceedings cannot be said to have ended so long as the order is under challenge in appeal. The order of Gurdev Singh J. would, thereforee, ensure during the pendency of the appeal as well and the same is not completely surperseded by the order of Jagjit Singh J. which is under appeal.

(18) So far as the impugned order of the trial court is concerned, I am inclined to agree with it that the defendants are not entitled to grant of stay under section 111 of the Trade Marks Act, However. they are entitled to stay under section 151 of the Code of Civil procedure since Gurdev Singh J. in exercise of his revisional jurisdiction granted it and set aside the order of the trial court dated 11th November, 1963, while the previous order of the District Judge dated 11th April, 1963 had become final. I find that the judgment of Gurdev Singh, J. is binding on the parties, although left to myself, with respect, I might entertain different views.

(19) Nevertheless I also find that inspire of the aforesaid order, the suit has not remained at initial stage and considerable advance has been made in the matter of recording evidence and it would not be in the interests of justice to stop its further progress.

(20) Under the circumstances of the case, I order that the trial of the suit will continue but the passing of the decree by the trial court is stayed till the decision of F.A.O. (o.s) 32 of 1968. In case the plaintiffs should claim a decree from. the trial court conditional upon its variation in accordance with the final judgment in F.A.O. (o.s) 32 of 1968, it will be open to the respondents-plaintiffs to apply to this court in this revision for variation of this order of stay. It will also be open to the learned lower court to pass any orders under subsection (4) of section 111 of the Trade Marks Act it thinks fit. The revision is accordingly disposed of with no order as to costs.


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