IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE P.R.RAMAN & THE HONOURABLE MR. JUSTICE P.BHAVADASAN FRIDAY, THE 18TH SEPTEMBER 2009 / 27TH BHADRA 1931 AFA.No. 63 of 1991() -------------------- AGAINST THE JUDGEMENTIN AS.174/1989 IN OS.2/1987 of D.C. & SESSIONS COURT,KOZHIKODE .................... APPELLANT(S)/APPELLANT/PLAINTIFF: -------------------------------------------------------- M/S. MAHAVIR RICE & PULSE MILLS, BAREJA, AHAMEDABAD, GUJARAT – 382 425, REPRESENTED BY ITS MANAGING PARTNER, BABU BHAI N. PATEL. BY ADV. SRI.P.N.KRISHNANKUTTY ACHAN, SENIOR ADVOCATE RESPONDENT(S)/RESPONDENTS/DEFENDANTS: ------------------------------------------------------------------- 1. JAIKRISHNAN TRADING COMPANY, MIROLI, DISTRICT DASKROI, AHAMMEDABAD, GUJARAT. 2. BHAVESH TRADING COMPANY, MIROLI, AHAMEDABAD, DASKROI DISTRICT, GUJARAT. 3. ASHOK, C/O. SOUTH TRADERS, KABOOTHAR KHANA, AHAMEDABAD, GUJARAT. 4. ANWAR RICE TRADING COMPANY, BIG BAZAR, CALICUT – 1. 5. ROSHNI TRADERS, BIG BAZAR, CALICUT-1. 6. SAIMMU ASSOCIATES, 12/934, BIG BAZAR, CALICUT – 1. 7. SHYSHA TRADERS, 13/682, BIG BAZAR, CALICUT – 1. ADV. SRI.M.C.SEN, SENIOR ADVOCATE FOR R1 TO R3. SRI.V.V.SURENDRAN FOR R4 TO R7. THIS APPEAL FROM FIRST APPEAL HAVING BEEN FINALLY HEARD ON 18/08/2009, THE COURT ON 18/09/2009 DELIVERED THE FOLLOWING: P.R. RAMAN & P. BHAVADASAN, JJ. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - A.F.A. No. 63 of 1991 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Dated this the 18th day of September, 2009. JUDGMENT Bhavadasan, J, The plaintiff, who failed to secure any relief against the defendants in an action for passing off is the appellant. 2. The plaintiff claims to be carrying on business of manufacturing, processing and sale of rice in the State of Gujarat at Bareja, Dascroi Taluk in Ahamedabad Dstrict since 1982. He claims to be a leading manufacturer and seller of raw rice under the trade mark 'Taj Mahal' brand Surati, Superfine No.1. The trade mark consists of the pictorial representation of “Taj Mahal” and the words written “King of Rice, Mahavir Rice Mills” in Devanagari script at the top of the bags containing rice. The plaintiff has applied for registration of copyright and the said application is pending under the Copyright Act. The plaintiff has been using the trade AFA.63/1991. 2 name and the logo from 1984 onwards and his business in rice has earned a reputation under that name. The superior quality of raw rice sold under the above trade mark has gained wide reputation and the rice so sold is identified with the plaintiff's firm. There is a distinctiveness and the plaintiff has acquired a right to use it exclusively. The allegation is that defendants 1 to 3 who are selling low quality rice are passing off their goods adopting the trade mark of the plaintiff. The get up, lay out and arrangement adopted by defendants 1 to 3 are intended and sufficient to cause confusion and deception in the mind of the traders and public and with a view to pass of inferior quality rice as that of the plaintiff. Defendants are not entitled to do so. Various other facts are also stated, which are not very relevant for the present. It is claimed that on account of long continuous uninterrupted and exclusive use of the trade mark Taj Mahal in relation to the goods (rice) manufactured and marketed by the plaintiff, the said trade mark is understood to denote the rice sold by the plaintiff. The plaintiff AFA.63/1991. 3 applied for registration of trade mark as early as in 1985 and the application is pending. On completion of the formalities, the plaintiff is likely to get the trade mark registered with effect from 11.1.1985 and the plaintiff came to know that the defendants are passing off their goods using the trade mark of the plaintiff. They are thereby earning unlawful and illicit profits. Defendants 4 to 7 are sellers of goods despatched by defendants 1 to 3 in bags containing deceptively similar trade mark as that of the plaintiff. On the basis of these allegations, the suit was laid. 3. Defendants 1 to 3 resisted the suit. They denied the allegation in the plaint. According to them the suit is not maintainable under Section 69 of the Indian Partnership Act. The third defendant denied that he is a manufacturer, stockist or dealer of rice. Third defendant is only a broker. Defendants 1 and 2 are only sister concerns. Defendants 1 and 2 have been manufacturing and selling fine quality rice and it was started under the name and style of the first defendant, namely, Bhavesh Trading Company, AFA.63/1991. 4 from 1981onwards. They have been marketing and selling their products under different brands, namely, Lakshmi brand and Taj Mahal brand in several parts of India and Calicut. Plaintiff and its partners are fully aware of the said fact. Plaintiff is known to be a manufacturer alone. The rice manufactured by the plaintiff is being sold under different brand names, namely, Lakshmi brand and Madholi brand. They did not market rice under the trade name Taj Mahal. The allegation against these defendants are without basis and foundation. The defendants pointed out that even according to the plaintiff the trade mark claimed by the plaintiff is not yet registered. The allegation of adoption by the defendants of a similar trade mark as that of the plaintiff with the intention to make illegal gains was also denied. They pointed out that there is no similarity between the trade mark of the plaintiff and defendants 1 and 2. No deception is caused by the trade mark adopted by the defendants. There is no infringement of trade mark or passing off is alleged. There are several traders both in Calicut and outside AFA.63/1991. 5 who use the trade name Taj Mahal. According to the information of these defendants several other persons have also applied for registration of the trade mark Taj Mahal before the registering authority under the Trade and Merchadise Marks Act. The plaintiff cannot claim it to be his exclusive trade mark. No loss or damage has been caused to the plaintiff by the acts of these defendants. They pointed out that the plaintiff is not entitled to any relief. 4. Defendants 4, 6 and 7 filed separate written statements, in which they took up similar contentions like defendants 1, 2 and 3. The written statement by the fifth defendant is also almost identical. 5. Later plaint was amended and thereafter defendants 1 to 3 filed additional written statement. 6. Based on the pleadings, the court below raised necessary issues for consideration. The evidence consists of the testimony of P.Ws. 1 and 2 and Exts. A1 to A58. The defendants had D.Ws. 1 to 3 examined and Exts. B1 to B18 marked. Exts.X1 AFA.63/1991. 6 to X103 are third party exhibits. On an evaluation of the evidence in the case, the court below came to the conclusion that the plaintiff has miserably failed to establish its case and they are not entitled to any relief. The suit was therefore dismissed. 7. Plaintiff carried the matter in appeal as A.S. 174 of 1989 before this court. The learned Single Judge, after an elaborate reconsideration of the entire evidence and facts in the case, concurred with the trial court in its conclusion and therefore dismissed the appeal. This appeal is directed against the said judgment and decree. 8. It is seen from the records that at the time of admission three questions of law are seen to arise for consideration. They are: “1. Whether the trade mark Taj Mahal and even the pictorial representation are marks of Communis Juris firms, and whether without registration under the Trade and Merchandise Marks Act a passing off action is maintainable? AFA.63/1991. 7 2. Whether the marketing of rice through the sister concerns of the plaintiff, disentitles the plaintiff's firm from maintaining the action? 3. Whether the plea put forwards by the defendants, disentitles them from challenging the merits of the claim of the plaintiffs?” 9. As the facts and evidence are same, three questions of law would be considered together. 10. As already noticed, the suit relates to the allegation of passing off. The plaintiff claims that it manufactures and sells Surati, Superfine No.1 rice in bags containing the trade mark Taj Mahal depicted in a particular manner. The complaint is that defendants 1 to 3, who are selling inferior quality rice, have adopted a deceptively similar looking trade mark like the one used by the plaintiff and therefore are causing loss to the plaintiff. 11. The main contesting respondents are defendants 1 and 2. They denied the allegation and pointed out that several traders are seen using the words Taj Mahal and the plaintiff has no AFA.63/1991. 8 exclusive right to use the same as its trade mark. The trial court as well as the first appellate court found that there were nothing to show that the socalled words, namely, Taj Mahal was infact being used by the plaintiff only and he had exclusive right to use the same. It is also found that the claim of the plaintiff that he has been using the said trade mark from 1984 does not appear to be true. 12. We may first consider as to what is meant by 'passing off'. It means, as Lord Halsbury put in, 'nobody has any right to represent his goods as the goods of somebody else'. The law protects through a passing off action the goodwill between a trader and its customers, which to them are help to sustain. In normal case of passing off, the plaintiff has to prove a reputation sufficient for members of the public to be misled by the defendant's conduct into thinking that they are securing the goods or services of the plaintiff. It may not be enough for the public simply to be confused about whether it is getting the plaintiff's or the AFA.63/1991. 9 defendant's goods. The plaintiff will have to demonstrate the volume of sales and to supplement this by evidence from traders and public of the meaning that they attach to the distinguishing features of the plaintiff's goods. The plaintiff must have some badge of recognition upon which to found his reputation. It is the plaintiff's reputation as a source of goods or services that is in issue. The starting point for deciding whether there has been a misrepresentation amounting to passing off is the understanding that the plaintiff has built up with the public. In the decision reported in Laxmikant V. Patel v. Chetanbhai Shah (2002 (Vol.110) Company Cases 518) it was held that the three elements of passing off action are the reputation of goods, the possibility of deception and the likelihood of damage to the plaintiff. It is also held that the same principle which apply to trade marks apply to trade names also. In the decision reported in Heinz Italia v. Dabur India Ltd. ((2007) 6 SCC 1) it was held that in an action for passing off, the plaintiff has to establish prior user to secure AFA.63/1991. 10 relief. There are five elements to be proved. They are i) misrepresentation, ii) made by a trader in the course of a trade, iii) prospective customers of his or ultimate consumers of goods or services supplied by him, iv) which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable consequence) and v) which causes actual damage to a business or goodwill of the trader by whom the action is brought or (in a quia timet action) will probably do so. 13. An action for infringement of a trade mark and passing off have a common origin. But passing off action is common law remedy, while infringement of trade mark is a statutory remedy. In passing off action, the plaintiff should prove that the defendants' activities must involve a false representation causing damage to goodwill acquired by the plaintiff. The point that arises in such matters for consideration is the use by the defendants in respect of their goods of mark, name or get up in question leads to the public to believe or does it represent such AFA.63/1991. 11 goods would be the goods of the plaintiff or of a particular class or quality and is usually put is it calculated to deceive the public. It is essential to the success of any claim in respect of passing off to prove that the mark used by the defendants is possibly similar to the one which belong to the plaintiff. The essential ingredients in case of passing off is the extent of reputation the plaintiff has established with reference to his mark or trade name. 14. Being an intra court appeal, the scope of interference is limited more so because two courts have concurrently found that the plaintiff is not entitled to any relief. 15. The plaintiff claims that since 1984 he has been selling Surati Superfine No.1 rice under the trade name Taj Mahal brand with a descriptive logo. In fact the definite claim of the plaintiff is that the three sister concerns of the plaintiff are using the said name. However, the trial court found that there were no averments in the plaint to that effect. In the plaint even though it is claimed that the plaintiff is using the trade name, at the time of AFA.63/1991. 12 evidence that case was given up and the case was altered to one that the three sister concerns of the plaintiff were using the said name. The first appellate court was not in complete concurrence with the said finding. But that may not be of such consequence at all. Exts.X1 to X94 are the bills relied on by the plaintiff to show that the Taj Mahal brand rice manufactured by the plaintiff is marketed by the plaintiff through the three sister concerns. But the trial court found that when P.W.1 was examined it was admitted that the three firms are distinct and independent firms and they have separate accounts and balance sheet. The trial court found that the said accounts and the documents were not produced for the reasons best known to the plaintiff and what were produced were only Exts.X1 to X94 bills. The trial court also came to the conclusion that Ext.A13 document seems to have been cooked up for the purpose of the case. 16. Even according to the plaintiff he began to use the trade mark from June, 1984 onwards. But the evidence showed AFA.63/1991. 13 that the mark as such was designed only in July, 1984. The trial court as well as the first appellate court found that as on 10.5.1984, that is the date of Ext.A13, it could not be said that the plaintiff was using the alleged trade mark. 17. The first appellate court found that going by the pleadings, the plaintiff's claim that they have been manufacturing, processing and selling rice in the State of Gujarat since 1982. According to the plaintiff they are marketing the rice under the trade name Taj Mahal brand Surati Superfine No.1 rice. 18. The plaintiff makes a claim that the plaintiff has established the reputation under the trade name for the sale of rice, which they are manufacturing and processing. The issue is whether the superior quality of raw rice processed and sold in bags containing the claimed trade mark has gained wide reputation so that the raw rice bags bearing any such or similar mark are liable to be treated as those belonging to the plaintiff. The plaintiff accused the defendants for selling low quality rice adopting their trade AFA.63/1991. 14 mark. 19. The first issue that needs to be considered is whether the plaintiff has established the goodwill and reputation as claimed by him. It is to be seen whether the plaintiff has established the goodwill with such distinctiveness that the trade mark becomes the secondary name for their superior quality rice. True that is a pictorial representation of the trade mark name of the plaintiff. From the records it is seen that the plaintiff has applied for registration both under the earlier Trade and Merchandise Marks Act as well as the Copyright Act. There is no case for the plaintiff that the registrations have been obtained. Since the plaint says that the trade mark had been used from 1984, the trial court as well as the first appellate court found that from the bills produced by the plaintiff it is not possible to find out whether the sales were conducted on the basis of the trade mark alone particularly on the basis of the lay out, get up and the pictorial representation of Taj Mahal. Ext.A44 is the letter from Raja AFA.63/1991. 15 Exports, Kannur pointing out that they had seen the advertisement in the Hindu newspaper about Taj Mahal Surati Superfine No.1 rice and they are interested in purchasing rice from the plaintiff. But both the courts have found that from Ext.A44 the purchaser had sought for sample of the rice before entering into an agreement. Even though this is claimed by the plaintiff as a circumstance in his favour, it is evident that it was not based on the brand name that the purchaser had sought for the rice, but in fact he wanted a sample to be sent to him. It could be seen that the documents produced by the plaintiff are insufficient to establish the case of the plaintiff that by virtue of the lay out, get up and pictorial representation, the plaintiff has acquired a distinctiveness about the rice sold by him. 20. P.W.2 was examined on behalf of the plaintiff. He is a partner of Kiran Enterprises. As per his evidence, the three sister concerns, namely, Sreelaxmi Trading Company, Dhanalaxmi Trading Company and Bhaghyalaxmi Trading Company are the AFA.63/1991. 16 sister concerns of the plaintiff. The trial court was not inclined to accept the said version and came to the conclusion that there were no evidence to show that the three were sister concerns of the plaintiff. The issue is not whether the three were sister concerns of the plaintiff, but whether the purchasers have identified the goods without anything else on the basis of the mark said to have been adopted by the plaintiff. Both the courts below have found that the scrutiny of the records available in this behalf is totally insufficient. In fact P.W.2, a loyal witness of the plaintiff has stated that they have not purchased rice or any other material from the plaintiff. In fact P.W.2 speaks about the manner and method of purchase of rice. According to him, the rice is purchased after verifying the samples. His evidence is insufficient to show that the rice is usually purchased on the basis of the brand name. According to him, a wholesale dealer keep samples of rice in his shop in small containers for examination of the intending purchasers. The intending purchasers examine these samples and AFA.63/1991. 17 place the orders. He says that usually sale is depended upon the manufacture, reputation and the place from where the rice is manufactured. Going by the evidence of this witness, it is also seen that till 1987 apart from defendants 1 and 2 atleast the rice sold by two other manufacturers were under the brand name Taj Mahal. The evidence of those witnesses is totally insufficient to show that the mark adopted by the sister concerns of the plaintiff earn the required reputation as a consequence of which the plaintiff had acquired the goodwill, which is the subject matter of infringement in the suit. 21. The plaintiff has no case that the defendants are dealers of Surati rice. It is clear from the evidence of P.W.1 that in Calicut Taj Mahal rice is sold only to Kiran Enterprises and the three concerns supplied rice on the basis of the orders placed by Kiran Enterprises. Both the courts have found that there is nothing to indicate that the sale of goods in Calicut is conducted on the basis of the trade mark, but on the other hand the sale is being AFA.63/1991. 18 conducted on the basis of verification of the sample. It is conceded by P.W.1 that the brokers verify the samples before placing orders. True, P.W.1 says that people buy rice on the basis of trade mark also. However, none from the public is examined or any trader is examined to show that what P.W.1 claims is true. In fact, the evidence of P.W.2 is against the stand of the plaintiff in the plaint and also as to what is spoken to by P.W.1. 22. In short, there is absolutely no evidence to prove that the rice is being sold on the basis of the trade mark. In fact, both the court have found that other traders are also using the same name Taj Mahal and the plaintiff was well aware of the same. 23. The evidence adduced by the defendants goes contrary to the case set up by the plaintiff. D.W.1 is a broker in rice, pulses and grains. He claims to have run his business in the name and style South Traders since 1984. He gave evidence about the sale of Taj Mahal brand rice manufactured by Vadoli Rice Mills. According to D.W.2 Vadoli Rice mills has been AFA.63/1991. 19 manufacturing and selling Taj Mahal Brand rice from 1980 onwards. He also claims that New Bharath Rice Mills and Sandhya Trading Company also manufacture, market and sell rice under Taj Mahal Brand. 24. As already noticed, it is for the plaintiff to prove that their goodwill and reputation is being misused by the defendants. On the basis of the evidence on record, it has been found by both the authorities that the plaintiff has miserably failed to satisfy the court that the trade mark belongs exclusively to them and that their reputation is affected. It is unnecessary to consider whether the claim put forward by the defendants is true or sustainable. At the risk of repetition, one may notice that it is for the plaintiff to prove all the ingredients necessary to attract common law remedy against passing off. 25. Surprisingly, the learned counsel appearing for the appellant referred to Section 100 of the Trade Marks Act, 1999 and it reads as follows: AFA.63/1991. 20 “100. Transfer of pending proceedings to Appellate Board.-All cases of appeals against any order or decision of the Registrar and all cases pertaining to rectification of register, pending before any High Court, shall be transferred to the Appellate Board from the date as notified by the Central Government in the Official Gazette and the Appellate Board may proceed with the matter either de novo or from the stage it was so transferred.” Based on the provision it was contended that the matter pending before this court needs to be transferred to the appellate court. 26. A reading of the provision shows that the Section can have no application to the facts of the case. Proceedings contemplated under Section 100 relates to the rectification of register pending before the High Court. In fact Section 159(3) is applicable to the present case. The said Section reads as follows: “159(3). The provisions of this Act shall apply to any application for registration of a trade mark pending at the commencement of this Act and to any proceedings consequent thereon and to any registration AFA.63/1991. 21 granted in pursuance thereof.” It is evident from the above provision that the proceedings have to continue before this court itself. 27. The discussion made above clearly shows that the plaintiff has miserably failed to show that he had been transacting business of rice in Calicut. At best what the evidence shows is that the three sister concerns have been dealing in rice under the name Taj Mahal, that by itself is insufficient to grant relief to the plaintiff.