THE HON’BLE SRI JUSTICE B. CHANDRA KUMAR Appeal Suit No. 321 of 2003 Judgment: This appeal is directed against the judgment and decree dated 31.12.2002 passed in O.S. No.2 of 1997 by the Principal District Judge, Ranga Reddy District, at L.B. Nagar. The appellant herein is the plaintiff and the respondent herein is the defendant in the suit. The parties hereinafter will be referred to as they are arrayed before the trial Court for the sake of convenience. The plaintiff M/s. Shree Balaji Bajrang Mithai Bhandar, a proprietary concern represented by its Proprietor Srinivas Panwar, filed the suit against the defendant M/s. Sri Balaji Bajrang Mithai Bhandar, R.K. Nagar, Malkajgiri, for the relief of perpetual injunction and rendition of accounts for passing off its trade mark. The plaintiff’s specific case is that it is a registered firm carrying on business in manufacture and sale of sweet meets and savories of all types and descriptions. It has been using a trade name of business “Shree Balaji Bajrang Mithai Bhandar” extensively, intensively and continuously since 07.07.1970 in respect of the goods prepared by it. The plaintiff has applied for registration under the provisions of the Trade and Merchandise Marks Act, 1958 (for brevity ‘the Act’) and the Rules made thereunder. The further case of the plaintiff is that by virtue of its extensive sale of goods under the aforesaid trade name of business, the said trading style has become distinctive of the goods on which it is used and has subsequently come to connote and denote to the consuming public that the goods sold through the said trade mark are the goods of the plaintiff alone and no one else. The goods so sold have acquired wide reputation and goodwill among the consumers. The goods sold by the plaintiff under the said trade name of business are identified by the purchasers and intending purchasers as the goods of the plaintiff and the buyers include illiterate or semi-illiterate who identify the goods by appearance of the aforesaid outlet, sign boards, packing material and other implements used by the plaintiff for conducting their day to day business. The plaintiff gained popularity and the same can be gauged by the amount of business done by it for the past 27 years. The plaintiff has also expended huge sums of money and efforts in popularizing the goods sold under the trade name of business “Shree Balaji Bajrang Mithai Bhandar” by distributing free gifts, calendars and mementos and other sales promotional schemes and also by extensively advertising through souvenirs, hoardings, cinema slides etc. Thus, the plaintiff’s outlet has come to be exclusively identified by its trade name. The further case of the plaintiff is that in the month of November 1996 they were delivered with summons for settlement of issues issued by the Munsif Magistrate Court, R.R. District, by which they came to know that a joint selling sweets and savories shop has been opened by the defendant under the name and style of “Sri Balaji Bajrang Mithai Bhandar”. Then the plaintiff conducted a personal search and having confirmed the same they approached the defendant and suggested them to withdraw all the material including sign boards, bill books and packing material carrying the expressions “Sri Balaji Bajrang Mithai Bhandar”. The defendant, though agreed orally, but did not comply with the request of the plaintiff. Then the plaintiff visited the shop of the defendant on 05.04.1997 and discovered that the defendant were still carrying on business by selling sweets and savories under the trade name “Sri Balaji Bajrang Mithai Bhandar”. Then the plaintiff purchased sweet meets and savories from the defendant worth of Rs.78-50 ps., under receipt No.257, dated 05.04.1997. The defendant used an identical slogan “No branches in twin cities” as has been done by the plaintiff for the past 27 years. The defendant has been dishonestly taking undue advantage of the reputation and goodwill built up by the plaintiff over the years and passing off their goods for those of the plaintiff’s goods and creating confusion and deception in the minds of the purchasers of an average intelligence and imperfect recollection. The defendant is misleading and inducing the buyers to purchase their goods as the goods of the plaintiff and making the buyers to believe that the plaintiff has opened a branch in Malkajgiri. It is further alleged that the defendant has purposefully and fraudulently adopted the trade name of business identical in all respects to that of the plaintiff and passing off their goods as those of the plaintiff. The trade and the public as well as the consumers will invariably associate the defendant goods with that of the plaintiff’s goods because of the complete similarity of the trade name. The defendant is not likely to suffer any injury or loss if it is restrained from using the trade name “Sri Balaji Bajrang Mithai Bhandar”. The defendant has imitated and continues to imitate the trade name of the plaintiff and passing off goods and therefore the plaintiff is entitled for injunction. Thus, the plaintiff filed the suit seeking injunction restraining the defendant directly or indirectly in any manner using in relation to sweets and savories the expressions “Sri Balaji Bajrang Mithai Bhandar” and for consequential reliefs. The defendant filed a written statement and resisted the suit. The specific case of the defendant is that Section 11 of the Act creates an embargo on registration of certain trade marks and as per Clause (d) of Section 11, the marks such as Ganesh, Lord Narsimha, Lord Krishna, Lord Buddha, Sri Sai Baba, Swamy Vivekananda etc., appears to be common to several trades and the same cannot be registered in view of the embargo created under Section 11 of the Act. The case of the plaintiff that it has applied for registration is only a device and an after thought to harass the defendant. The plaintiff cannot register its trade name “Shree Balaji Bajrang Mithai Bhandar”. The plaintiff’s contention and praising high of its business is a fallacy. The sign boards, packing material and other supplements used by the defendant are entirely different from that of the plaintiff and therefore no prejudice is caused to the plaintiff’s business. The further case of the defendant is that the plaintiff’s shop is situated at Narayanaguda, Hyderabad and the defendant’s shop is situated at Malkajgiri, Secunderabad, which is far from the place of the plaintiff’s shop and there is no similarity in the trade mark and it is a common practice to use the name of Hindu God for many people for their business and therefore the suit filed by the plaintiff is not maintainable. Since both the shops are situated at different places and the shop of the plaintiff is far from the shop of the defendant there is every scope for the general public to distinguish both the shops. The plaintiff’s shop bears “shree” and the defendant’s shop bears “sri” in the title of the shop and the name of the plaintiff’s shop is mentioned in a square and the emblem on the top with the name “B.B. House of Sweets” and the name of the defendant’s shop is in a circle and emblem is altogether different. The packing material of the defendant can be distinguished with the words “visit”, whereas the plaintiff’s packing material does not bear the same words. The plaintiff’s address is mentioned at the bottom of the packing material, whereas the defendant’s address is mentioned at the top. The colour, background and get up used by the defendant is entirely different from that of the plaintiff. The wordings and general appearance cannot by any stretch of imagination be said that the defendant is using the trade name of the plaintiff’s shop. The further case of the defendant is that the plaintiff in connivance with the local police came to the shop of the defendant on 19.09.1996 and informed that they lodged a report to the police contending that it has got registered “Shree Balaji Bajrang Mithai Bhandar” under the Copy Rights Act and that the defendant has infringed the rights and required the defendant to remove the sign board and surrender all materials. The further case of the defendant is that when their advocate went to the police station and demanded for supply of the report along with the documents said to have been filed therewith and contended that the Copy Rights Act has no application, the police retreated. The attitude of the plaintiff forced the defendant to file a suit in O.S. No. 600 of 1996 on the file of the Principal District Munsif, East and North and obtained status quo orders in I.A. No.4126 of 1996 on 17.10.1996, which order is still subsisting. The said suit operates as res judicata to the present relief sought by the plaintiff. The contention of the plaintiff that they have visited the shop of the defendant on 05.04.1996 is a concocted story. The plaintiff filed the suit only to harass the defendant with all incorrect pleas and therefore the same is liable to be dismissed. The following issues were framed by the lower Court for trial. 1. Whether the trade mark of the defendant is deceptively similar to the trade mark of the plaintiff? 2. Whether the plaintiff is entitled to the perpetual injunction restraining the defendant from using the trademark “Sri Balaji Bajrang Mithai Bhandar” or any other expression or words which are similar to the same either as part of its trading style/trade name of business or as to pass off as being associated with or having any trade nexus or trade connection with the plaintiff? 3. To what relief? On behalf of the plaintiff PWs.1 to 3 were examined and Exs.A1 to A54 were marked. On behalf of the defendant DWs.1 and 2 were examined and Exs.B1 to B5 were marked. The learned Principal District Judge, on appreciation of the entire oral and documentary evidence, came to the conclusion that the plaintiff could not prove that the trade name has been registered and after referring the decisions reported in Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd (2001 (3) Supreme Court 1), Sri Sai Agencies Pvt.Ltd., Hyderabad v. Chintala Rama Rao (1997(5) ALT 545) and M. Mahender Shah v. Tiruchy Flour Mills, Trichy (1997 (2) ALT 391) observed that in respect of trade marks not registered yet, when the product of one party sought to be sold as product of other party a passing off action is maintainable. The lower Court also came to the conclusion that since the business of the defendant is commenced at a subsequent point of time to that of the plaintiff, the plaintiff is competent to maintain the suit for passing off action. Further, the learned District Judge came to the conclusion that the shops of the plaintiff and the defendant are situated in different places at a distance of 15 KMs from one another and that there is another shop by name “Sri Balaji Mithai Bhandar” at Chikkadpally and another shop in the name and style “Sri Balaji Jagadish Mithai Bhandar” at Amberpet and therefore the plaintiff should establish that the defendant played deception and making the people drawn towards it and causing loss to the plaintiff. It is further observed that the shop of the defendant is at one corner of the city and whereas the plaintiff’s shop is in the middle of the city and that nobody will go to the nook and corner of the city to purchase the sweets in the shop of the defendant though it is named almost phonetically sounding the plaintiff’s shop. The lower Court also held that there is difference in the logos as well as the material that is printed on the plastic covers and that the selling of sweets will depend upon the quality maintained by each sweet shop and that the customers will not be led by the name of the shop and that the plaintiff has not made out the case and accordingly dismissed the suit. Aggrieved by the same, the plaintiff preferred the present appeal. The points that arise for consideration are; (1) Whether the plaintiff is the prior user of the trade name and whether there is any possibility of customers being misled in view of similarity in the trade name of the plaintiff and the defendant? (2) When logos and covers are different whether the suit for passing off is maintainable? (3) Whether the distance between the shops can make any difference? Point Nos.1 and 2: Learned counsel for the appellant/plaintiff submitted that the lower Court failed to consider that the plaintiff has been using the trade name since 1970, whereas the defendant started using the name from 1996 and that the name being used by the defendant is phonetically similar to that of the plaintiff’s trade name and that the customers, who include illiterates, would be carried by the name and title of the shop and not by logo. His main contention is that the name of defendant’s shop is deceptively similar to the shop of the plaintiff and both of them are doing business in the same goods and that the plaintiff has gained popularity and that the defendant has been passing off his goods in the name of the plaintiff. It is also submitted that the plaintiff has spent huge amounts in popularizing its products and the name of its trade mark. It is also submitted that the lower Court has failed to appreciate the evidence in proper perspective and failed to consider the admissions made by the witnesses of the defendant. It is also submitted that there is no pleading in the written statement to the effect that the defendant consulted and named its shop or that the name of its partner is Bajarang. It is further submitted that the evidence of PWs.2 and 3 and the admissions made by DW.1 himself shows that the trade name is the same and the same will cause deception and the customers will be misled. In support of his contention he has relied on the decisions reported in M. Mahender Shah v. Tiruchy Flour Mills, Trichy[1] and Cadila Health Care Ltd., v. Cadila Pharmaceuticals Ltd.[2]. He has also relied on the decisions reported in Ramdev Food Products (P) Ltd., v. Arvindbhai Rambhai Patel[3], Heinz Italia v. Dabur India Ltd.[4], Khoday Distilleries Limited (Now known as Khoday India Limited) v. Scotch Whisky Association[5] and T.V. Venugopal v. Ushodaya Enterprises Limited[6]. It is also submitted that DW.2 himself admitted that he can change the name of the shop of the defendant and the said admission was not taken into consideration by the lower Court. He further submitted that though the trade mark is not registered, the suit for passing off is maintainable under Section 27(2) read with Sections 105 and 106 of the Act. On the other hand, learned counsel for the respondent/defendant submitted that merely because the trade name is same, it cannot be said that the defendant’s shop is opened with a view to cheat the plaintiff. His main submission is that the words “Balaji” and “Bajarang” are the names of Hindu Gods which are commonly used. It is also his submission that since the trade mark is not registered the suit does not lie under Section 105 of the Act. His main submission is that the plaintiff must show that the defendant has caused some loss to it and unless there is evidence to show that the plaintiff has sustained any loss the suit is not maintainable. It is also submitted that the logos and printing material on the covers are different and so the goods of the plaintiff and the defendant can easily be distinguished. It is also his submission that in case of generic name no party can claim any exclusive right. In support of his contentions, he has relied on the following decisions. Wander Ltd. v. Antox India P.Ltd.[7], Sri Sai Agencies Pvt. Ltd., v. Chintala Rama Rao[8], Uniply Industries Ltd., v. Unicorn Plywood Pvt. Ltd.[9], Cadila Health Care Ltd., v. Cadila Pharmaceuticals Ltd. (2 supra), Dhodha House v. S.K. Maingi[10], K. Narayanan v. S. Murali[11] and Skyline Education Institute (Pvt.) Ltd., v. S.L. Vaswani[12]. In Heinz Italia v. Dabur India Ltd. (5 supra), the Apex Court observed as follows. “……….in an action for passing off, the plaintiff has to establish prior user to secure an injunction and that the registration of the mark or similar mark in point of time, is irrelevant. Modern tort of passing off has five elements i.e. (1) a misrepresentation, (2) made by a trader in the course of trade, (3) to prospective customers of his or ultimate consumers of goods or services supplied by him, (4) which is calculated to injure the business or goodwill of another trade (in the sense that this is a reasonably foreseeable consequence), and (5) 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. Further, before the use of a particular mark can be appropriated it is for the plaintiff to prove that the product that he is representing had earned a reputation in the market and that this reputation had been sought to be violated by the opposite party. Furthermore, the principle of similarity could not to be very rigidly applied and that if it could be prima facie shown that there was a dishonest intention on the part of the defendant in passing off goods, an injunction should ordinarily follow and the mere delay in bringing the matter to Court was not a ground to defeat the case of the plaintiff. Lastly, in the case of a passing off action the similarities rather than the dissimilarities have to be taken note of by the Court and the principle of phonetic "similarity" cannot be ignored and the test is as to whether a particular mark has obtained acceptability in the market so as to confuse a buyer as to the nature of product he was purchasing.” In Cadila Health Care Ltd., v. Cadila Pharmaceuticals Ltd. (2 supra) it was held as follows. “Under S. 28 of the Trade and Merchandise Marks Act on the registration of a trade mark in Part-A or B of the register, a registered proprietor gets an exclusive right to use the trade mark in relation to the goods in respect of which trade mark is registered and to obtain relief in respect of infringement of the trade mark in the manner provided by the Act. In the case of un-registered trade mark, S. 27(1) provides that no person shall be entitled to institute any proceeding to prevent, or to recover damages for, the infringement of an unregistered trade mark. Sub-section (2) of S. 27 provides that the Act shall not be deemed to affect rights of action against any person for passing off goods as the goods of another person or the remedies in respect thereof. In other words in the case of un-registered trade marks, a passing off action is maintainable. The passing off action depends upon the principle that nobody has a right to represent his goods as the goods of some body. In other words a man is not to sell his goods or services under the pretence that they are those of another person.” In the said decision, it was finally held as follows. “Broadly stated in an action for passing off on the basis of unregistered trade mark generally for deciding the question of deceptive similarity the following factors to be considered : a) The nature of the marks i.e. whether the marks are word marks or label marks or composite marks, i.e. both words and label works. b) The degree of resembleness between the marks, phonetically similar and hence similar in idea. c) The nature of the goods in respect of which they are used as trade marks. d) The similarity in the nature, character and performance of the goods of the rival traders. e) The class of purchasers who are likely to buy the goods bearing the marks they require, on their education and intelligence and a degree of care they are likely to exercise in purchasing and/or using the goods. f) The mode of purchasing the goods or placing orders for the goods and g) Any other surrounding circumstances which may be relevant in the extent of dissimilarity between the competing marks.” Therefore, it has to be seen whether the two trade marks are identical and whether the mark used by the defendant so nearly resembles the plaintiff’s trade mark or is likely to deceive or cause confusion in relation to the goods manufactured by the plaintiff, whether the name board used by the plaintiff and defendant by their look and on their sound are similar and whether the customers are likely to be confused. In Laxmikant V. Patel v. Chetanghat Shah (3 supra), it was observed as follows. “A person may sell his goods or deliver his services such as in case of a profession under a trading name or style. With the lapse of time such business or services associated with a person acquired a reputation or goodwill which becomes a property which is protected by Courts. A competitor initiating sale of goods or services in the same name or by imitating that name results in injury to the business of one who has the property in that name. The law does not permit any one to carry on his business in such a way as would persuade the customers or clients in believing that the goods or services belonging to someone else are his or are associated therewith. It does not matter whether the latter person does so fraudulently or otherwise. The reasons are two. Firstly, honesty and fair play are, and ought to be, the basic policies in the world of business. Secondly, when a person adopts or intends to adopt a name in connection with his business or services which already belongs to someone else it results in confusion and has propensity of diverting the customers and clients of someone else to himself and thereby resulting in injury. The three elements of passing off action are the reputation of goods, possibility of deception and likelihood of damages to the plaintiff. The same principle, which applies to trade mark, is applicable to trade name. Passing off cases are often cases of deliberate and intentional misrepresentation, but it is well-settled that fraud is not a necessary element of the right of action, and the absence of an intention to deceive is not a defence though proof of fraudulent intention may materially assist a plaintiff in establishing probability of deception.” So, in the light of the above principles, we have to examine the case of the parties. Section 27 of the Act is as follows. “27. No action for infringement of unregistered trade mark.- (1) No person shall be entitled to institute any proceeding to prevent, or to recover damages for, the infringement of an unregistered trade mark. (2) Nothing in this Act shall be deemed to affect rights of action against any person for passing off goods as the goods of another person or the remedies in respect thereof.” From the above provision, it is clear that when it is alleged that one person is passing off his goods as the goods of another person affecting the rights of the other person a suit is maintainable under Sub-section (2) of Section 27 of the Act. Section 105 of the Act is as follows. “105. Suit for infringement, etc., to be instituted before District Court.- No suit (a) for the infringement of a registered trade mark; or (b) relating to any right in a registered trade mark; or (c) for passing off arising out of the use by the defendant of any trade mark which is identical with or deceptively similar to the plaintiff’s trade mark, whether registered or unregistered; shall be