1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION ORDINARY ORIGINAL CIVIL JURISDICTION NOTICE OF MOTION NO. 682 OF 2003 IN SUIT NO. 667 OF 2003 Shri H.M. Saraiya & Ors. .. Plaintiffs. vs. Ajanta India Ltd,. & Anr. .. Defendants. Dr. V.V. Tulzapurkar, Sr. Adv. with Shyam Diwan, Sr. Adv. Rahul Kadam and Nikhil Bodade i/by H.W. Kane for plaintiffs to support the n/m. Shri Aspi Chinai, Sr. Adv. with Janak Dwarkadas, Sr. Adv. with V.R. Dhond, S. Jagtiani & Manish Saurastri, Utkarsh Tewari, i/by Shantilal & Co. for Defendants to show cause. CORAM : S.U.KAMDAR, J. CORAM : S.U.KAMDAR, J. CORAM : S.U.KAMDAR, J. DATE : 7th March, 2006. DATE : 7th March, 2006. DATE : 7th March, 2006. ORAL JUDGMENT : 2 . The present notice of motion is taken out by the plaintiffs seeking reliefs that the defendants should be restrained from using the trade mark ’Ajanta’ in respect of the non-medicated toilet preparations including tooth paste, soaps, shaving cream, shampoo and allied goods. The said injunction is sought by them on grounds of both infringement of "trade mark" and "passing off". However, the learned counsel appearing for the plaintiffs has fairly stated that he is pressing relief only on the basis of a "passing off" action in view of the fact that the defendants mark ’’Ajanta’’ is already registered for the tooth paste. He has further submitted that though the reliefs in the motion are sought in respect of various non-medicated tiolet preparations including soaps, shaving cream, shampoo, cosmetics and allied goods, for the purpose of the present notice of motion he is restricting his claim to passing off only in respect of tooth paste. 2. Some of the material facts of the present case, briefly enumerated, are as under :- 3. In the year 1950 a company known as Bombay Brush Co. which was a partnership firm adopted a trade mark ’’Ajanta’’ in respect of tooth brushes. 3 In 1958, a company known as Bombay Brush Co. Pvt. Ltd., was incorporated by the erstwhile partners of the partnership firm Bombay Brush Company who took over the business of the said partnership firm. It is the case of the plaintiff that during the period 1958 to 1987 the Bombay Brush Co. Pvt. Ltd., and its licensee Bombay Brush Baroda Pvt. Ltd., and Bombay Brush Belgaum Pvt. Ltd., used extensively the trade mark in respect of tooth brushes and shaving brushes. On 3.9.1959 the trade mark ’Ajanta’ was registered under Registration No. 191915 in respect of brushes falling in Class 21 in favour of the said Bombay Brush Co. Pvt. Ltd. On 19.2.1964 one Mahipal V. Saraiya obtained registration of the word mark ’Ajanta’ in respect of non-medicated toiletry preparations, cosmetics and perfumes falling in Class 03 of the schedule to the Trade and Mercandise Marks Act, 1958. 4. In the year 1971 a company known as Ajanta Transistor Clock Co., being the 2nd defendant herein conceived a trade mark Ajanta in respect of clocks, wrist watches, time pieces under Class 14 of the Schedule to the Trade and Mercandise Marks Act, 1958. 5. On 28.12.1978 the Bombay Brush Co. Pvt. Ltd., assigned the said trade mark ’Ajanta’ registered under Class 21 to R.S. Champalal 4 Vijaychand Saraiya, HUF. The said HUF was represented by Mahipal V. Saraiya. On 14.10.1987 the mark ’’Ajanta’’ which was also registered under Class 3 under registration No. 220724-B was also assigned to R.S. Champalal Vijaychand Saraiya by the said Bombay Brush Co. Pvt. Ltd., On 14.10.1987, a registered user agreement was entered into between the said HUF of R.S. Champalal Vijaychand Saraiya and Bombay Brush (Indore) Pvt. Ltd., Bombay Brush (Vidarbha) Pvt. Ltd., Bombay Brush (Belgaum) Pvt. Ltd., and Bombay Brush (Baroda) Pvt. Ltd.. On 29.10.1987, two applications were made to bring on record the said HUF as subsequent proprietors of registered trade mark in Class 21 and 3. On 25.1.1988 and 10.8.1988 Registrar allowed both the said applications and thus the said R.S. Champalal Vijay Saraiya, HUF has come on record as a proprietor of the registered trade mark in respect of the mark ’Ajanta’ both falling in Class 3 and Class 21. 6. in or about 1989 Ajanta Watch Pvt. Ltd., was incorporated. However, the said name of Ajanta Watch Pvt. Ltd., was subsequently changed in 1994 to Ajanta Watch Ltd., and in April 2002 to Ajanta India Ltd,. 7. On 2.1.1989 the defendants also applied for registration of Ajanta trade mark in Class 14 for 5 the purpose of clocks and time pieces. On 25.7.1990, the defendants made an application for registration of their trade mark Ajanta in classes 4, 13, 15, 17, 20, 22, 27 and 33. On 27.8.1990, the 2nd defendant made an application for registration of the mark Ajanta in respect of cosmetics, dentrifices, tooth paste, depilatory, shaving preparations, talcum powder, make up, hair dye, perfumes under Class 3. The said application inter alia indicated that mark ’Ajanta’ is not in use but is proposed to be used. Thus, the mark Ajanta was not used by the defendants upto 27.8.1990 in relation to the items which are falling under class 3 which includes dentrifices and tooth paste. In 1990-91 the defendants also applied for registration of trade mark ’Ajanta’ in classes 7, 8, 10, 16, 19, 21 and 25. 8. It is the further case of the plaintiffs that during the period 1987 to 1995 the two registered trade marks bearing Nos. 191915 and 344242 both in class 21 were extensively used in relation to tooth brushes. In so far as the sale and advertisement expenses are concerned the details thereof are set out in the plaint. There is no dispute that the plaintiffs were in the market since 1958 with trade mark ’Ajanta’ in relation to the tooth brushes and was selling the same extensively. There is also no dispute that the plaintiffs have 6 acquired a reputation in the mark ’Ajanta’ so far as the tooth brushes are concerned. The figures of sales and advertisements which are given at Exhibits C-1 to C-4 and C-5 to C-8 to the plaint in relation to tooth brushes are also not much disputed. 9. Sometime in or about the year 1994, Registrar raised a preliminary objection to the application of the defendants for registration of mark ’Ajanta’ in class 3 for tooth paste stating inter alia that there is already an existent mark "Ajanta" belonging to the plaintiffs under No. 220724-B in Class 3 of the said schedule to the said Act. 10. On 1.11.1994 the Karta of the said HUF namely, R.S. Champalal Vijaychand Saraiya expired. On 9.10.1995, the plaintiffs permitted Bombay Brush Vidarbha Pvt. Ltd.,, Bombay Brush Indore Pvt. Ltd., and Vidarbha Hygiene Products Pvt. Ltd., and Indore Hygiene Products Pvt. Ltd., to use its registered trade mark "Ajanta" during the period 1995 to 2002. The said four registered users who were the licensees under agreement extensively used the said trade mark "Ajanta" in respect of tooth brushes and even in respect of sales and advertisements expenses pertaining to tooth brushes by the said users there is no much dispute between the parties. On 18.12.1995 an application was made 7 by the plaintiffs to the Registrar of Trade Marks to bring on record the name of the plaintiffs as the subsequent proprietor of the mark "’Ajanta’" since the previous Karta of the HUF has expired. 11. On 1.1.1996 the trade mark "Ajanta" of the defendant no. 2 pertaining to the application in class 3 was advertised in the Trade Mark Journal. In view of the fact that there was no objection of the plaintiffs to the said trade mark, the said trade mark "Ajanta" has been duly registered under Class 3. 12. On 27.7.1996, an application was made for registration of the mark by the various licensees of the plaintiffs as the registered users of the mark. On 28.1.1997 Bombay Brush (Indore) Pvt. Ltd., was registered as a user of the plaintiffs’ mark. 13. On 15.5.1997, the 2nd defendant made an application under the mark "’Ajanta’" which was registered on 27.8.1990 in Class 3 of the Schedule to the said Act. 14. In May, 1998, the Registrar of Trade Marks allowed the request to bring on record the plaintiffs’ name as the subsequent proprietors of the trade mark "’Ajanta’" on the death of the previous Karta. On 19.3.1999 the plaintiffs’ trade 8 mark in the mark "Ajanta" in Class 3 was renewed. On 7.4.2000 the plaintiffs’ trade mark "Ajanta" in Class 21 was also renewed. 15. On 5.5.2000, the defendant no. 1 decided to manufacture consumer goods products such as tooth paste, shampoo, soaps and like items. A Board Meeting was called on 5.5.2000 and the Board Resolution was passed to that effect. In January, 2002 defendants started construction of the manufacturing unit for their Fast Moving Consumer Goods, hereinafter referred to as "FMCG products" to be produced under the trade mark ’Ajanta’ at Morbi, Gujarat. On 15.2.2002, the objects clause of the defendant company was altered to include buying, selling and manufacturing the FMCG products. On 22.3.2002, an Extra Ordinary General Body meeting of the 1st defendant was held to amend their name to Ajanta India Ltd. and one of the explanatory statement thereto explained that the company plans to venture into the field of tioletries, cosmetics and its allied products and that it had placed an order for purchase of machineries for toiletries. On 9.4.2002 the name of the defendant no. 1 was changed from Ajanta Watch Ltd., to Ajanta India Ltd. It is the case of the defendants that the name was changed keeping in mind the diversification undertaken by the defendants to manufacture and sell various FMCG products. 9 16. In or about April 2002, the plaintiffs requested Alps Containers Pvt. Ltd., to manufacture tooth paste, shaving cream and shampoo on their behalf. On 4.4.2002, the plaintiffs requested Alps Containers Pvt. Ltd,. to obtain a Food and Drug Licence to manufacture tooth paste. On 11.4.2002 the plaintiffs made an application for rectification of the 2nd defendant’s trade mark "Ajanta" under application for rectification No. AMD-60931. The said application was made inter alia on the ground that there was no bonafide intention of the defendants to use the mark nor was there any actual user and that the registration of the said trade mark was prohibited under section 12 (1) of the Trade and Mercandise Marks Act, 1958. On 25.4.2002 it is the case of the plaintiffs that they made advance payment to Alps Containers Pvt. Ltd., by cheque for the purpose of manufacturing tooth paste. On 29.4.2002 the plaintiffs claim to have placed a confirmed order on Alps Containers Pvt. Ltd., for manufacturing the tooth paste under brand ’Ajanta’ for the purpose of sale and distribution thereof in the market by the plaintiffs. On 2.5.2002 an agreement was entered into under which Alps Containers Pvt. Ltd., has been permitted to use the mark ’Ajanta’ for the goods which are manufactured by them for the plaintiffs. On 1.6.2002, according to the plaintiffs, Alps Containers Pvt. Ltd, 10 produced the goods and delivered the same to the plaintiffs for the purpose of sale in the market and paid excise duty in respect of the said goods. On 3.6.2002, on account payment was made by the plaintiffs to Alps Containers Pvt. Ltd., for manufacturing the said tooth paste for and on behalf of the plaintiffs. On 16.7.2002 they made final payment to Alps Containers Pvt. Ltd., for manufacturing the tooth paste on their behalf. On 5.8.2002, a letter was addressed by the Registrar to the Defendants attorney regarding rectification application filed by the plaintiffs and a copy thereof was sent to the 2nd defendant. Thus, according to the plaintiffs the defendants were aware as far back as on 5.8.2002 that the plaintiffs are objecting to their mark being used in respect of tooth paste and an application for rectification has been filed. 17. On 19.9.2002, an assignment of the mark ’’Ajanta’’ was executed by the 2nd defendant in favour of the 1st defendant. The said mark was assigned to the 1st defendant in respect of all items except the items of clock and time pieces. According to the plaintiffs they have been using the said mark ’Ajanta’ in respect of tooth paste since June 2002. The defendants commenced the sale of tooth paste under the trade mark ’Ajanta’ with effect from 20.12.2002 and by the time the suit was 11 filed in February 2003, according to the defendants, the sales figures of the defendants were almost 3,00,000 tubes per day and had effected sales in excess of Rs. 100 lacs. 18. On 6.1.2003, an application was filed by the defendants for rectification of the plaintiffs’ mark in respect of class 3. On 8.1.2003 the defendant no. 1 issued a caution notice regarding trade mark ’Ajanta’ in Mid Day, Mumbai. However according to the plaintiffs between 6.6.2002 to 11.1.2003 they have already sold the said tooth paste under their name ’Ajanta’ and have furnished sales figures and invoices indicating the said sale. It is thus the case of the plaintiffs that the plaintiffs are prior users of the mark ’Ajanta’ in relation to tooth paste. The plaintiffs further contend that being the prior user of the said mark, they are entitled to an injunction of passing off as against the defendants who have admittedly started using the said mark only from 20.12.2002 and not before. On 18.1.2003, the defendants filed a suit being Suit No. 163 of 2003 for infringement and passing off against the plaintiffs’ predecessors and others in Ahmedabad City Civil Court in the State of Gujarat. Ad interim application was made. The said ad-interim application was refused. On 21.1.2003 the plaintiffs entered their appearance in Ahmedabad suit and have opposed the application for interim 12 injunction. The said application for interim reliefs is still pending. 19. On 1.4.2003 a meeting took place between one Mr. H.M. Sariya of the plaintiffs and one Mr. Ashok Patel of the defendants and according to the defendants in the said meeting Mr. H.M. Sariya demanded a payment of Rs. 3 crores failing which he has threatened that he will file a suit against the defendant no. 1 restraining them from using the brand ’Ajanta’. 20. On 25.1.2003 the Assistant Registrar of Trade Marks confirmed to M/s Ajanta India Ltd,. that tooth paste is covered by the head "dentifrices" and is not covered by the head "non medicated toilet preparations" as appearing in class 3 of the Schedule to the said Act. 21. On 20.2.2003, present suit is filed by the plaintiffs against the defendants for action of infringement and passing off in respect of the said mark ’’Ajanta’’, in relation to the ’tooth paste’ product. 22. On 9.4.2003, an ad interim injunction was granted by this Court in the present suit. However, the said order was stayed in an appeal preferred by the defendants. The appeal was finally dismissed 13 but stay was continued to enable the defendants to file a special leave petition in the Supreme Court. On 26.7.2003 the special leave petition filed by the defendants has been disposed off with a direction to the learned Single Judge to decide the Notice of Motion finally and the ad-interim order was stayed till the hearing and disposal of the Notice of Motion. 23. The learned counsel Dr. Tulzapurkar appearing for the plaintiffs has contended before me two fold proposition. Firstly it has been contended that admittedly the plaintiffs have entered in the market with tooth paste under the brand ’Ajanta’ prior to the defendants coming to the market and thus, they are entitled to injunction on the ground of passing off since they are prior users. According to the learned counsel it is not disputed that the sales of the plaintiffs for the ’Ajanta’ brand tooth paste commenced in June 2002 whereas the defendants started their sale only in December 2002 and thus the plaintiffs were in market for almost six months prior to the defendants and, therefore, the defendants are entitled to injunction on the basis of a passing off action. It has been contended that the adoption of the mark ’Ajanta’ by the defendants is not bonafide and is with an intention to use the good will earned by the plaintiffs. He has further contended that the defendants have deliberately 14 adopted the mark even after they were put to the notice by letter dated 5.8.2002 from the trade mark registry which was communicated to the defendants inter alia pointing out therein that the mark "Ajanta" is being used by the plaintiffs in relation to their product of tooth paste and in spite of the said notice still the defendants purportedly proceeded to commence sale in December, 2002 under the Trade mark "’Ajanta’" for tooth paste. It is thus contended that the defendants deliberately with full knowledge that the plaintiffs’ mark ’Ajanta’ is registered in respect of tooth paste still adopted the said mark in December, 2002 and thus the adoption of the mark is not bonafide and is solely to create a confusion in the minds of the people that their goods of tooth paste under the word ’Ajanta’ is manufactured by the plaintiffs. It is thus contended that the defendants’ adoption of the mark not being bonafide the plaintiffs are entitled to injunction. It has been further contended by the learned counsel Mr. Tulzapurkar that even on 6.1.2003, the defendants were well aware that the plaintiffs have applied for rectification of the defendants mark on the ground that the plaintiffs are a prior registered holder of the mark ’Ajanta’ in relation to tooth paste but inspite of the same the defendants continued to use the mark ’Ajanta’ in relation to tooth paste. It is his case that the defendants having entered in the market only in 15 December 2002 they should have stopped the user of the mark in January, 2003. Thus it is contended by Dr. Tulzapurkar that it cannot be said that the defendants are a bonafide user of the said mark ’Ajanta’ in relation to their product tooth paste. 24. In the alternative, the learned counsel has contended that even on the assumption that the plaintiffs are not entitled to an injunction on the ground that the plaintiffs are prior users of the said mark in relation to tooth paste still it can not be disputed that the plaintiffs have acquired a tremendous reputation under the brand name ’Ajanta’ in so far as tooth brushes are concerned and that their tooth brushes under the brand name ’Ajanta’ are in the market since 1958. It has been contended that so far as sales figures and reputation of the brand ’Ajanta’ in respect of tooth brushes manufactured by the plaintiffs is concerned there is no dispute that the plaintiffs have acquired an unchallengeable reputation and thus by virtue thereof plaintiffs are entitled to restrain the defendants from using the said brand ’Ajanta’ even in relation to their product tooth paste. It has been contended by the learned counsel for the plaintiffs that though the said goods are not similar still they are cognate and complementary or associated goods and/or in any event the goods both fall in common field of activity and, thus, the 16 plaintiffs are entitled to injunction as against the defendants from using the said mark Ajanta in so far as their product tooth paste is concerned. 25. In support of the aforesaid contentions, the learned counsel appearing for the plaintiffs has relied upon the judgment of the Delhi High Court in the case of Century Traders v. Roshan Lal Duggar & Co. and others, reported in AIR 1978 Delhi 250, particularly para 12 thereof to contend that the registration of the Trade Mark by the plaintiffs under Class 3 in respect of tooth paste would not give him any new right in the mark or any greater rights than what already existed in common law and a person who is a prior user is entitled to maintain a suit for passing off even against the registered trade mark holder. The learned counsel has thereafter relied upon a judgment of the learned Single Judge of this Court in the case of Consolidated Foods Corporation vs. Brandon and Co. Private Ltd., reported in AIR 1965 Bombay 35 which has been reproduced in the judgment of the Delhi High Court in para 12 thereof. He has drawn my attention to para 27 of the said judgment. Thereafter he has relied upon a judgment of the Gujarat High Court in the case of Duncan Agro Industries Ltd,. vs. Somabhai Tea Processors (P) Ltd., reported in 1994 IPLR 249 and he has relied upon para 15 of the said judgment in which it has 17 been held that a prior sale is an important factor for the purpose of determining the issue of passing off. He has thereafter also relied upon a recent judgment of the Apex Court in the case of Dhariwal Industries Ltd, & Anr. vs. M.S.S. Food Products, reported in 2005 (30) PTC 233 (SC) and drawn my attention to the following passage : "8. The principles governing the grant of interim injunction are well settled and do not require to be repeated. The interim injunction has been granted in favour of the plaintiff in this case mainly on the finding that there was prior user of the mark "Malikchand", if not by the plaintiff, by his assignors and the use of the mark "Manikchand" by the defendants in respect of Pan Masala and Gutakha and Supari commenced only at a later point of time. This prima facie finding of prior user was arrived at by the trial court relying on the deeds of assignments produced by the plaintiff and some documents and affidavits produced in support of its claim. Some inconsistencies in the claim of the defendants were also referred to." On the basis of aforesaid judgements the learned counsel has contended that in so far as the tooth 18 paste is concerned, the plaintiffs are admittedly a prior user of mark ’Ajanta’ and the defendants have admittedly entered in the market subsequently. He further submitted that in the present case a classical trinity has been established. Firstly the goods are identical being tooth paste. Secondly, the mark is identical being ’Ajanta’ and thirdly, the class of consumers of the said goods are identical. It has been contended that once it is so then the plaintiffs being the prior user of the said mark ’Ajanta’ in relation to tooth paste the injunction in their favour in respect of passing off action must follow. 26. Alternatively, it has been contended by the learned counsel for the plaintiffs that assuming that the plaintiffs are not entitled to the injunction of passing off by virtue of their prior user in tooth paste still according to the plaintiffs they are entitled to injunction of passing off because they have already acquired a tremendous reputation in respect of mark ’Ajanta’ in relation to the tooth brush and tooth paste being complimentary and/or cognate product, the plaintiffs are entitled to injunction in that behalf. In support of the aforesaid contention, the learned counsel for the plaintiffs has relied upon a plethora of judgments which I have penned down hereinbelow:- 19 First he has relied upon the judgment of the Allahabad High Court in the case of Thomas Bear & Sons (India) v. Prayag Narain, reported in AIR 1935 Allahabad 7, particularly following passage:- "The learned Judges formulated two questions for reference to a third Judge. They are as follows: "(1) Does the plaintiffs’ right in respect of his elephant trade-mark apply only to cigarettes and smoking tobacco or does it extend also to chewing tobacco? (2) Is the defendant’s trade mark a colourable imitation of the plaintiffs’