1 pps IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION CHAMBER SUMMONS NO.1783 OF 2008 IN SUIT NO.1729 OF 1987. The Scotch Whisky Association ..Plaintiffs. Vs. Khoday India Limited ..Defendants. Dr.Virendra Tulzapurkar with Mr.Amit Jamsandekar i/b.Sr.Counsel Little & Co. for the Plaintiffs. Mr.F.DeVitre, Sr.Counsel a/w. Mr.Zubin Behram Kamdin, Mr.Sagar Divekar i/b. Wadia Gandhy for the Applicant in Chamber Summons/Defendants. CORAM: S.J. VAZIFDAR, J. DATED: 7 th OCTOBER, 2009 JUDGMENT. 1. This is the defendant s chamber summons seeking an order rejecting the plaint and dismissing the suit as covered and concluded by the judgment of the Supreme Court dated 27.5.2008 reported in (2008) 10 SCC 723 in an appeal filed by the defendant against the plaintiff from the order and judgment of the Division Bench of the Madras High Court and for 2 a declaration that the above suit does not survive in view of the said judgment. 2. This is an action for passing off. The plaintiff filed the suit inter alia for the following reliefs: a) that it be declared that by using in respect of whisky not distilled and matured in Scotland the impugned label (being Exhibit M) and the impugned carton (being Exhibit O) containing the word SCOT and/or the crest of a lion rampant and the description Distilled from the Finest Malt and Blended with the Choicest Whiskies by Scotch Experts under Government Supervision or the word SCOT or the device of the lion rampant or the said description in respect of the defendant s whisky manufactured in India, the defendant is passing off its whisky as Scotch Whisky ; b) that the defendant by itself, its servants and agents be restrained by a perpetual order and injunction of this Hon ble Court from advertising or offering for sale or selling or distributing in any country whisky which is not Scotch Whisky under the word 3 SCOT or the device of the lion rampant or the said description or with the label (being Exhibit M) or the carton (being Exhibit O) containing the word SCOT or the device of a lion rampant and/or the description Distilled from the Finest Malt and Blended with the Choicest Whiskies by Scotch Experts under Government Supervision , or any other label or carton containing any description material or any other thing in respect of whisky which is not Scotch Whisky by using the impugned label (being Exhibit M) and/or the carton (being Exhibit O) containing the impugned material, so as to pass of or enable to pass off its whisky as Scotch Whisky ; C) that the defendant by itself, its servants and agents be restrained from exporting its said whisky to Japan or Abu Dhabi under the mark PETER SCOT or the device of a lion rampant or the said description or using the impugned label or carton being Exhibits  M and  O hereto containing the word SCOT or the device of a lion rampant or the description Distilled from the Finest Malt and Blended with the Choicest Whiskies by Scotch Experts under 4 Government Supervision or any other description or device or words suggesting Scottish origin in respect of the defendant s Whisky or from placing in the hands of traders or middlemen in Japan or Abu Dhabi labels or cartons containing the aforesaid material so as to enable the traders and/or middlemen in Japan or Abu Dhabi to pass off the Defendant s whisky as Scotch Whisky; 3. Mr. DeVitre submitted that the cause of action in this suit does not survive in view of the judgment of the Supreme Court. He submitted that the cause of action, if any is barred by the principles analogous to res judicata as the cause of action in the suit and in the original proceedings from which the matter reached the Supreme Court is the same. According to him the issues of acquiescence and waiver raised by the defendant and the issue whether the defendants marks, devices and labels are deceptively similar to the plaintiffs marks or are likely to cause confusion have been decided by the Supreme Court in the said judgment. Thus, he submits the suit is liable to be dismissed 5 on the ground of issue estoppel. The decision of the Registrar in rectification proceedings is binding between the parties in all proceedings including the present suit. It is not permissible for the parties to lead additional evidence in this suit in view of the judgment of the Supreme Court which was delivered in the proceeding for rectification commenced before the Registrar of Trade Marks. In the circumstances, Mr. DeVitre submitted that the suit is liable to be rejected under Order VII Rule 11 read with Section 151 of the Code of Civil Procedure. 4. Considering the nature of the Chamber Summons it is not necessary to deal with the disputes between the parties on merits. The question that arises is whether the suit is liable, in effect, to be dismissed in view of the said judgment of the Supreme Court. It is therefore necessary to refer to the facts only in so far as they are relevant for this purpose. 5.(A) Plaintiff No.1 is incorporated with the object inter-alia of protecting and promoting the 6 interests of the scotch whisky trade in the United Kingdom and abroad which it does inter-alia by prosecuting and defending legal proceedings in any territory in the world. Plaintiff No.2, John Walker & Sons Ltd., is a company incorporated in the United Kingdom carrying on business as distillers, blenders and dealers of scotch whisky. Plaintiff No.3 is a company incorporated under the laws of the Netherland. Plaintiff Nos.2 and 3 are members of plaintiff No.1. The scotch whisky brands of plaintiff No.2 stand transferred to plaintiff No.3. (B) According to the plaintiff, whisky distilled and matured in Scotland is known throughout the world as Scotch Whisky. The description Scotch Whisky means whisky which is distilled and matured in Scotland and nowhere else. Any whisky sold under any description, name and label, device, mark, ticket, get up or emblem which is evocative of Scotland is likely to be taken as Scotch Whisky by members of the trade and public. Accordingly, whisky which is not Scotch Whisky if dealt with by bearing such name or description is bound to mislead the public and members of the trade 7 all over the world including India. The members of plaintiff No.1 use words and devices evocative of Scotland. A number of members of plaintiff no.1 use brand names including the word SCOT , SCOTT , SCOTS such as Captain Scott, Golden Scot, Royal Scot, Northern Scot, Grand Scot, Scot Royal and Queen of Scots. Thus, the use of any such device or description of brand names by any one in respect of whisky so as to suggest that such whisky emanates from Scotland, when in fact it does not, would mislead and is likely to mislead people in general, and in any event would put them in a state of confusion. (C) The details of sales of Scotch Whisky by the members of plaintiff no.1 and the advertisements issued by them are referred to, to indicate that they have acquired an enormous and enviable reputation and goodwill all over the world including India. The plaintiffs have also furnished details of action taken by them, including legal proceedings, all over the world to prevent attempts by various traders to pass off their products as Scotch Whisky. 8 (D) The plaint then refers to the device of the Lion Rampant stating the same to be particularly evocative of Scotland as the Lion Rampant in red as well as the yellow background indicates the Royal Standard of Scotland. 6. The defendant has adopted the mark PETER SCOT and uses it on its labels. Further, the defendant has also adopted the crest of lion rampant which is a copy of the Scottish Royal Standard. The crest is in red and on a yellow background, the same colours as in the standard. The label also bears the words Distilled from Finest Malt and Blended With the Choicest Whiskies by Scotch Experts under Government Supervision . 7. It is averred in the plaint that the defendant is exporting its product under the brand name PETER SCOT to Japan where it is sometimes sold in retail stores among Scotch Whiskies and that by using the word SCOT , the crest of the Lion Rampant and the descriptive words, the defendant has committed the tort by passing off in India, which is completed in India upon export of the said goods for 9 sale in Japan. The law in Japan being a question of fact is also set out. Similar averments are made in respect of exports to Abu Dhabi. 8. The suit, therefore was filed inter alia on the ground that the trade and good will of the members of the first plaintiff including plaintiff nos.2 and 3 are being affected by the use of the impugned label and the impugned carton containing the impugned mark, device and description as the same suggest that the defendant s whisky is scotch whisky. 9. It is important to note that the plaint proceeds on the basis that the three factors viz. the word mark, the crest, and the descriptive words each independently and together are evocative of Scotland and are therefore causing damage to the trade and goodwill of the members of plaintiff No.1 and that the defendant is deliberately misleading the traders and members of the public into believing that its whisky is Scotch Whisky. 10. The plaint thereafter refers to the search reports and information received from their trade 10 mark agents. The first plaintiff admitted receipt of notice of the advertisements of the said mark PETER SCOT in the trade mark journal on 20.9.1974. It is stated that regrettably no objection was lodged by the first plaintiff through inadvertance but that the plaintiff vigorously opposed the other deceptive trade marks which were applied for registration of Indian distilleries including the defendant. The action taken by the plaintiff in respect of the defendants proposed mark HOGMANY and OLD ANGUS is referred to. 11. According to Mr. DeVitre the entire cause of action pleaded in the plaint has been dealt with and decided in the rectification proceedings which ultimately resulted in the said judgment of the Supreme Court. It is necessary therefore to refer to the judgment of the Supreme Court in considerable detail. This is for the obvious reason that the judgment is relied upon not merely as a precedent but essentially in support of the defendant s Chamber Summons to have the plaint rejected and the suit dismissed under Order VII Rule 11 read with Section 151 of the CPC on the ground that the cause 11 of action in the suit does not survive. 12. Before considering the judgment of the Supreme Court it is necessary to deal with certain preliminary issues raised by Counsel. 13. Mr. DeVitre submitted that although the judgment of the Supreme Court is subsequent to the filing of this suit, the application for the dismissal thereof is maintainable under Order VII Rule 11 read with Section 151 of the C.P.C. In other words according to him an application of this nature may be based on events subsequent to the filing of the suit. 14. If indeed the judgment operates as an issue estoppel or res judicata the fact that it was delivered after the suit was filed would not bar the court from granting the reliefs sought in the Chamber Summons. Subsequent facts even in this regard can and indeed must be considered by the Court. This is well established by a series of judgments. It is sufficient to refer to the judgment of the Supreme Court in Shipping Corporation of India v. Machado Brothers (2004) 12 11 SCC 168. The Supreme Court held that by the subsequent event if the original proceedings has become infructuous it would be the duty of the Court to take such action as is necessary in the interest of justice which includes disposing off infructuous litigations. It is further held that for this purpose it would be open to the parties to make an application under Section 151 of the CPC. 15. Mr. DeVitre further submitted that the finding in a previous proceeding is conclusive in subsequent proceedings. He relied upon the judgment of a learned Single Judge of this Court in Rama Maruti v. Mallappa Krishna [AIR 1942 Bom. 309]. In this case the plaintiff filed the suit to recover certain properties on the strength of the adoption made by a widow to her husband Krishna who was the owner. After her death the plaintiff s natural mother acting as his guardian leased the land to defendant no.3 for ten years after the adoption. Defendant no.3 in collusion with defendant nos.1 and 2 made over possession to them alleging that he was a tenant of defendant no.1. The plaintiff therefore filed the suit to recover the land. Defendant no.1 13 admitted that the lands belonged to the adoptive father but disputed the plaintiffs adoption by him. The plaintiff relied upon the decision in previous execution proceedings which were also taken out against defendant no.1 in which it was held that the plaintiff had been adopted as contended. It was held that the principal of res judicata would apply even though the subject matter of the two proceedings may be different provided the issue is the same. It was therefore held that the defendants contention that the plaintiff was not validly adopted was barred by res judicata. 16. The judgment supports the submission that for a plea of res judicata it is not necessary that the subject matter of the two proceedings is the same. The decision in the execution proceeding was not merely a finding of fact in support of the issue, but was a decision upon the issues itself. It is sufficient if the issue is the same. The question therefore before me is whether the issues raised in the present suit were decided by the Supreme Court in the said judgment. 14 17. Mr. DeVitre submitted that even if the causes of action are different, if the issue is the same the finding in a previous proceeding will constitute an issue estoppel in subsequent proceedings. He submitted therefore that although the causes of action in the proceeding before the Registrar of Trade Marks which ultimately reached the Supreme Court may be different from the causes of action in the present suit, the finding regarding acquiescence and waiver as well as whether the defendants use of the three factors are deceptive or likely to cause confusion in those proceedings bar the present suit on the principle of issue estoppel. He submitted that the evidence and the case in the present matter is identical to the evidence, pleadings and the case in its entirety in the rectification proceedings. 18. The submission on the point of laws is well founded and finds support in the judgment of a Division Bench of this Court in Chiranjilal vs. L.I. Corporation [AIR 1959 Bom 396]. It was held: (7) But the real and substantial point 15 that has been urged by Mr. Laud is that the cause of action in Suit No.438 of 1934 and in the present suit are different and therefore S.11 of the Civil Procedure Code has no application. Now, what S. 11 requires is not that the causes of action in the two suits must be identical, but that the matter directly and substantially in issued in the subsequent suit should also be directly and substantially in issue in the former suit It will be noticed that under S.11, not only the suit itself may be barred but also an issue, and therefore what we have to consider is whether a particular issue which the plaintiffs seek to be tried in the suit was directly and substantially the same in the earlier suit, and in this connect what is said is that in the present suit the plaintiffs are seeking a relief on the basis of a customary right enjoyed by the Hindu community and it is pointed out that in the earlier suit the claim was made on the basis of a dedication made by Putlibai and therefore it is said that the metters in issue in the two suits were different and the decision in the earlier suit cannot operate as res judicata. When one analyses the matter a little more closely it becomes clear that the rights that the plaintiffs were claiming on behalf of the Hindu Community in Suit No.438 of 16 1984 were the same as are now being claimed in the present suit. It is true that there was a contention in the earlier suit that there was a public charitable trust. There had to be such a contention because the suit was under S.92. It is also true that reliance was placed upon a dedication by Putlibai. But what is significant is that the plaintiffs in the suit did not rely upon any written trust. What they relied upon was a long and continuous user of certain rights by members of the Hindu Community and what was in issue in that suit was whether the members of the Hindu community had used as a matter of right the property in suit for the purpose of religious ceremonies. Now, that is the exact issue which arises in the present suit. What is in the present suit is whether the Hindu community had performed these religious ceremonies for a long and continuous period so that they have become entitled to these rights as customary rights. In our opinion, what we have to look at is not the legal for which is given to the right claimed by the plaintiffs, but what is the real and substantial right claimed. Whether a dedication in law can be inferred from a long and continuous user by the Hindu community or a customary right can be inferred; the real matter in issue was the user by the members of the Hindu 17 community. That is what the plaintiffs contended and that is what the defendants disputed, and the result was a compromise. In the present suit the plaintiffs are putting forward the same contention and the defendants are contesting the plaintiff s claim. Therefore, in our opinion, there is no substance in the contention that the matters in issue in the two suits are not the same. - Mr. DeVitre submitted that although it was not necessary for the Supreme Court to decide the issues that arise in this suit, the Supreme Court did deal with and answer the same. I do not agree. I have come to the conclusion that the judgment of the Supreme Court did not decide the issues which arise in the suit for reasons I will indicate later while analysing the judgment. 19. Mr. DeVitre submitted that these principles would apply although the reliefs claimed in the two proceedings may be different so long as the issue was the same. The submission finds support from the judgment of the Supreme Court in case of Pandit Ishwardas vs. State of M.P. (1979) 4 SCC 163. In para 7 the Supreme Court held as under: 18 7. The plaintiff in both the suits was the same. The contesting defendant was also the same, namely the State of Madhya Pradesh. In the present suit Melaram and the Chief Conservator of Forests were also im-pleaded as parties whereas in the other suit some other person was a party. We do not see that it makes any difference. In order to sustain the plea of res judicata it is not necessary that all the parties to the two litigations must be common. All that is necessary is that the issue should be between the same parties or between parties under whom they or any of them claim. The issue in the present suit and the issue in the Dewas suit were between the same parties namely the appellant and the State of Madhya Pradesh. The submission that the subject-matters of the two suits were different because the present suit was for a declaration and the other suit was for damages is equally without substance since the issue between the parties was identical in both the suits. The question at issue in both the suits was whether the agreement between Melaram and the Government and the surety bond executed by the plaintiff were not enforceable because of the failure to comply with Article 299 of the Constitution. The ground on which the agreement and the surety bond were sustained in the Dewas suit was that 19 the Raj Pramukh had ratified the same. The fact that the ratification by the Raj Pramukh was not expressly mentioned in the present suit does not make any difference to the plea of res judicata. Once the questions at issue in the two suits are found to be the same, the fact that the material which led to the decision in the earlier suit was not again placed before the Court in the second suit cannot make the slightest difference. The plea of res judicata may be sustained without anything more, if the questions at issue and the parties are the same, subject of course to the other conditions prescribed by Section 11 Civil Procedure Code. The submission of the learned counsel that the decision of the Dewas Court and the High Court in the other suit were non est because they upheld an illegal contract has only to be noticed to be rejected. 20. Dr. Tulzapurkar submitted that the 1958 and the 1999 Act specifically preserved and recognized the right to pursue the common law remedy of passing off. He submitted therefore that any decision in a rectification proceeding which is adopted under the Act cannot affect the right to pursue a passing off action. To hold otherwise according to him would 20 negate the right under Section 27(2). 21. There is no dispute that the Act preserves the common law remedy of passing off. It does not follow however that the rule of issue estoppel or res judicata do not apply to a passing off action qua a decision in a rectification proceeding. I find nothing in the language of the Act or the C.P.C. in general and in sections 27 and 11 thereof respectively in particular which excludes the operation of the principles in a passing off action qua other actions. If the issue of passing off is decided the judgment would operate as an issue estoppel or as res judicata in subsequent proceedings. Whether the issue of passing off is decided or not is a different matter altogether. That necessarily must be examined when an action is sought to be defended on the principles of res judicata and issue estoppel. 22. In Indo-Pharma Pharmaceutical Works Pvt. Ltd. vs. Pharmaceuticals Company of India [1977 BLR 73], a learned Single Judge of this Court applied the principle of issue estopped in proceedings under 21 the said Act. It is important to note that the learned Judge followed the judgment of the High Court of Mysore in K.R. Chinnakrishna Shetty vs. Ambalal & Company [AIR 1973 Mysore 74]. The learned Judge applied the principles in a case under the Act in a passing off action. After referring to the commentaries and judgments on issue estoppel and res judicata and principles analogous thereto, the learned judge observed as under: The third decision is of the High Court of Mysore viz. K. R. Chinnakrishna Setty v. Ambal & Co. [(1973) A.I.R. Mys. 74]. This was also a trade mark action in which it was held that the decision given in the earlier proceedings between the same parties with regard to registration of the trade mark operated as res judicata in a proceeding under s. 105. The