IN THE HIGH COURT OF GUJARAT AT AHMEDABAD APPEAL FROM ORDER No.113 of 2003 WITH APPEAL FROM ORDER No.130 of 2003 AND APPEAL FROM ORDER No.131 of 2003 For Approval and Signature: Hon'ble MR.JUSTICE D.A.MEHTA Sd/- ============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements? 2. To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the concerned : NO Magistrate/Magistrates,Judge/Judges,Tribunal/Tribunals? -------------------------------------------------------------- ARVINDBHAI RAMBHAI PATEL Versus RAMDEV FOOD PRODUCTS PVT. LTD. -------------------------------------------------------------- Appearance: 1. Appeal from Order No. 113 of 2003 MR MIHIR THAKORE for MR JR SHAH for Appellant Nos. 1-8 MR BJ SHELAT for MR RM CHHAYA for Respondent No. 1 2. Appeal from Order No. 130 of 2003 MR BJ SHELAT for MR RM CHHAYA for Appellant No. 1 MR MIHIR THAKORE for MR JR SHAH for Respondent Nos. 1-8 3. Appeal from Order No. 131 of 2003 MR BJ SHELAT for MR RM CHHAYA for Appellant No. 1 MR MIHIR THAKORE for MR JR SHAH for Respondent Nos. 1-8 -------------------------------------------------------------- CORAM : MR.JUSTICE D.A.MEHTA Date of Order: 08/05/2003 COMMON CAV JUDGMENT On 17-03-2003 the City Civil Court, Court No.13 at Ahmedabad passed a common order below Notice of Motion Exhs.6 and 34 in Civil Suit No.828 of 2000. Being aggrieved by the said order the aforesaid three appeals have been filed. The appellants in Appeal from Order No.113 of 2003 are the original defendants in the suit, while the appellant in Appeals from Order Nos.130 and 131 of 2003 is the original plaintiff in the civil suit. For the sake of convenience, hereinafter, the parties shall be referred to as the plaintiff and the defendants as described in the suit. 2. In the impugned order the trial Court has summarized its findings at paragraph 41 and thereafter passed the final operative order in paragraph 42 as under: " 41. Considering above all facts and circumstances, I summarize my findings as under:- (i) The defendant No.1 and consequently all defendants are entitled to use trade mark "Ramdev" for the retail business of spices in 7 outlets as mentioned in M.O.U.. It is not mandatory for the defendants to purchase goods from the plaintiff for retail sale in the said outlets. The defendants are at liberty to manufacture spices in their factory and carry on retail business in 7 outlets by using trade-mark "Ramdev" bearing registration No.44770. (ii) The defendant No.1 is at liberty to run business under the trade name "Ramdev Masala" for retail and wholesale business of spices, instant mix and other articles. However, he should not use trade-mark "Ramdev" except 7 outlets as mentioned in M.O.U.. (iii) Label and packing adopted by the defendants for their goods under the trade-name "Swad" containing word "Ramdev Masala" is creating infringement of the trade-mark of the plaintiff as it is deceptively similar. Therefore, the defendants should be prevented in using the word "Ramdev Masala" on their label and packing in any manner. However, the defendants are at liberty to manufacture and market spices in any trade name without using the word "Ramdev" or "Ramdev Masala". 42. Considering above all facts and circumstances, I pass following Order:- O R D E R Application exh.6 is allowed. The defendants, their servants, agents, partners or any other person, are hereby restrained by temporary injunction by using registered trademark, logo "Ramdev" or any other trade-mark, which is identical and deceptively similar to the trade-mark of the plaintiff, in respect of label and packing material of their goods except in seven outlets mentioned in M.O.U., till final disposal of the suit. 2. Application, exh.34 stands rejected. The defendants are at liberty to run business of spices under the trade name "Ramdev Masala" without using the registered trade-mark "Ramdev" except in seven outlets." 3. In Appeal from Order No.113 of 2003, the defendants have challenged the findings as summarized in para 41(iii) of the impugned order and prayed that the said direction restraining the defendants from using words "Ramdev Masala" on their label and packing should be quashed or in the alternative suitably modified. 4. In Appeal from Order No.130 of 2003, the plaintiff has prayed that findings recorded in para 41(i) and 41(ii) be quashed and set aside by granting relief as prayed for in application Exh.6. 5. In Appeal from Order No.131 of 2003 vide paragraph 12-A, a prayer is made to the effect that the impugned order be quashed and set aside to the extent, it rejects application Exh.34 and grant relief as prayed in application Exh.34 restraining the defendants from opening any branch / outlet under the name of Ramdev Masala, Ramdev Export or any other shop bearing the word "RAMDEV". 5.1 While in paragraph 12-B, it is prayed that the defendants be ordered not to proceed further in their pending applications for registration before the Registrar of Trade Marks containing the word "RAMDEV" till the disposal of the suit. 5.2 In relation to the aforesaid prayer at paragraph 12-B, it is required to be noted that the same cannot be granted for the simple reason that it does not arise out of the impugned order, in as much as, the trial Court has recorded in paragraph 4 of the impugned order that Mr.B.J.Shelat, the learned counsel for the plaintiff fairly conceded before the Court that he does not press relief claimed in paragraph No.17(3). This paragraph is paragraph number of application Exh.34 which is identical in terms to prayer 12-B of Appeal from Order No.131 of 2003. Therefore, the plaintiff having given up its claim to the said relief before the trial Court, it is not open to the plaintiff to now claim the said relief in this appeal. 6. The facts, briefly stated, are that the plaintiff is a Company incorporated under the Companies Act, 1956 on 06-01-1989. Defendant No.1, defendant No.3 and defendant No.5, were the directors of the plaintiff company and retired from the Company in 1998. Defendant Nos.2, 4 and 6 are respectively wives of defendant Nos.1, 3 and 5. Defendant Nos.7 and 8 are partnership firms which are constituted by defendant Nos.1 to 6 and / or their relatives. The plaintiff has filed a suit for preventing acts of infringement of trade mark, infringement of copyright and passing off being committed by the defendants by using the registered trade mark of the plaintiff, the art work and the word 'RAMDEV'. 7. In 1950, one Shri Rambhai Patel, since deceased, commenced a business in the name of 'Ramdev Flour Factory'. Rambhai had three sons, namely, Arvindbhai (defendant No.1), Hasmukhbhai and Pravinbhai (at present the directors of the plaintiff company). In or about 1968 late Shri Rambhai along with defendant No.1 commenced business in the name of 'Ramdev Masala Factory'. 7.1 On 01-10-1975 'Ramdev Masala Stores' was constituted as a partnership firm. One of the partners was Shri Arvindbhai Rambhai Patel, representing the firm of 'Ramdev Masala Grinding Factory'. The said Shri Arvindbhai Rambhai Patel joined firm of 'M/s.Ramdev Masala Stores' as an individual partner on 13-12-1977. On the same day Rambhai Chhagandas Patel also joined the said firm and both Shri Arvindbhai and Shri Rambhai joined the said firm of M/s.Ramdev Masala Stores w.e.f. 06-04-1997. Minor Hasmukhbhai Rambhai Patel was admitted to the benefits of partnership w.e.f. 27-04-1979. The said minor Hasmukhbhai attained majority on 14-07-1979 and elected to become a partner in the said firm. Ultimately the said firm of M/s.Ramdev Masala Stores came to be dissolved on 04-11-1991. 8. M/s.Ramdev Masala Stores applied for registration of mark bearing No.447700 which comprised of the word "RAMDEV" in Hexagon shape in Gujarati below which was a small square wherein a picture of Hindu Saint / God 'Ramdev' riding a horse and bearing a long flag pole in right hand, and below that picture was the word "Masala" in Gujarati. Registration was granted to the said mark in 1989. 9. On 06-01-1989, 'Ramdev Food Products Pvt. Ltd.', a Private Limited Company, was incorporated jointly by late Rambhai, Arvindbhai, Hasmukhbhai and Pravinbhai as the original directors, original subscribers and shareholders. 10. On 20-05-1990, a Deed of Assignment dated 20-05-1992 recorded assignment of the registered trade mark bearing registration No.447700 whereunder the assignor, M/s.Ramdev Masala Stores, assigned the said trade mark to the assignee M/s.Ramdev Food Products Pvt. Ltd. 11. On 01-04-1991, a new firm called M/s.Ramdev Masala was established and the business thereof was stated to be sale of various spices like chilly powder, cumin-coriander powder, turmeric powder, and other spices after grinding the same. 11.1 Clause 12 of the said partnership deed stipulates that any partner could retire after giving written notice three months prior to the date of retirement after settling his account. 11.2 While Clause 13 of the partnership deed provides that in the event of retirement, or death or for any other reason if a partner does not continue as such, the partnership is not to be dissolved but the continuing partners are entitled to carry on the partnership firm after inducting the legal heirs of such outgoing partner or without inducting legal heirs as may be mutually agreed upon between the parties. 12. Between 1975 and 1991 the family members started various partnership firms for carrying on various diverse businesses but the word "RAMDEV" formed part of the name of the each firm so as to have the firm name beginning with the word "RAMDEV". 13. A Registered User Agreement was executed on 01-04-1991 for a period of seven years wherein the plaintiff was the registered proprietor and the user was defendant No.7, namely, M/s.Ramdev Masala. However, it is an agreed position between the parties that the said agreement was never got registered. 14. On 19-11-1992, a new partnership firm by the name of M/s.Ramdev Exports came into existence and the principal business was to export the products of the plaintiff. 15. It appears that disputes arose between the members of the family, and more particularly between three brothers, i.e. Arvindbhai, Hasmukhbhai and Pravinbhai and ultimately the said disputes were resolved by intervention of four persons acceptable to the disputing parties by execution of a Memorandum of Understanding dated 30-05-1998. Hereinafter the same shall be referred to as the M.O.U. for the sake of convenience. 16. On 12/15-12-1998, the plaintiff issued a notice for infringement of trade mark. On 23-12-1998, Civil Suit No.6264 of 1998 was filed by defendant No.7 and defendant No.1, namely, M/s.Ramdev Masala and Shri Arvindbhai Rambhai Patel on the basis that there was no complete assignment of the mark. Thereafter, it appears that various proceedings including issuance of public notices, criminal complaints, etc. took place between the parties. Ultimately on 10-02-2000 Civil Suit No.828 of 2000 was instituted by the plaintiff. 17. Mr.M.J.Thakore, the learned senior counsel appearing on behalf of the defendants, submitted that the impugned order restraining the defendants from using the trade mark "RAMDEV" except in seven outlets, and holding that the label and packing adopted by the defendants for their goods under the trade name "Swad" containing the word "Ramdev Masala" was creating infringement of the trade mark of the plaintiff as it was deceptively similar and thus restraining the defendants from using the word "Ramdev Masala" on their label and packing, was bad in law and not warranted on facts and evidence on record. It was contended that if the plaintiff was basing its action for infringement and for passing off without relying upon the M.O.U., the plaintiff should not be permitted to refer to the terms of the M.O.U. and seek any relief on the basis of either compliance or violation of the terms of the M.O.U. That the plaintiff having not made out any prima facie case, was not entitled to interim injunction and the balance of convenience did not lie in favour of the plaintiff and hence, the impugned order should not be allowed to stand. 17.1 "RAMDEV" was the name of god / deity / saint having a strong following in Gujarat and Rajasthan particularly. It has been used as a trade name in various shops and establishments not only in the city of Ahmedabad but elsewhere and hence, the word "RAMDEV" was a public juris and irrespective of the registration of a label mark containing such a word, no one could claim any exclusive right to the use of the said word "RAMDEV". 17.2 The larger family of late Rambhai Chhagandas Patel have faith in Ramdev Pir and accordingly started using the word "RAMDEV" and the mark depicting the Pir in various businesses commenced right since 1950. 17.3 Even if the assignment whereby M/s.Ramdev Masala Stores transferred and assigned the registration mark bearing registration No.447700 was accepted as a valid assignment, yet M/s.Ramdev Masala Stores continued its firm name and business till 04-11-1991 despite the Assignment Deed being made effective from 20-05-1990. 17.4 That the firms M/s.Ramdev Masala and M/s.Ramdev Exports were started on 01-04-1991 and 19-11-1992 respectively. They have run concurrently and used the word "RAMDEV" in Hexagon with the plaintiff company, and the plaintiff company has never objected to such use. That similarly the plaintiff has also not objected to use of the trade names "M/s.Ramdev Masala" and "M/s.Ramdev Exports" despite the fact that Hasmukhbhai and Pravinbhai and their respective family members retired from the said two firms on 01-06-1998. 17.5 Therefore, it was submitted that acquiescence and waiver on part of the plaintiff company stood established and it had no right restraining the firms from using their firm names with whom the plaintiff company had dealt with by way of various business transactions. 17.6 That the present suit having been filed after a period of nine years after the firms commenced business disentitled the plaintiff from seeking any relief and at least no interim injunction could be granted. 18. As against this, Mr.B.J.Shelat, the learned counsel appearing on behalf of the plaintiff, contended that once it was established that a trade mark was registered and duly assigned under the provisions of The Trade and Merchandise Marks Act, 1958 ('the Act of 1958') the plaintiff was entitled to the protection provided by the Act of 1958 with special reference to Section 28 read with Section 29 and Section 32 of the Act of 1958. 18.1 That the registered mark contained the word "Ramdev" as well as the word "Masala" which were prefix and suffix to the figure of Pir Ramdev and hence if the same words were used in any combination so as to cause a deception in the mind of a consumer the plaintiff was entitled to an order of injunction in its favour for infringement and for passing off. 18.2 That the plaintiff was not a party to the M.O.U. and hence the terms of the same could not bind the plaintiff. 18.3 That the plaintiff had not passed any resolution nor permitted the defendants to use the mark and as such the M.O.U. cannot be used as the defence in infringement proceedings. 18.4 That reliance upon Section 33 by the defendants for the purpose of claiming prior user of the word "Ramdev" cannot help the defendants once registered trade mark was assigned by a valid Deed of Assignment and especially when M/s.Ramdev Masala Stores, the assignor firm, having been dissolved. 18.5 That M/s.Ramdev Masala was the firm which came into existence only in 1991 and was carrying on only retail sales outlets and, therefore, the said firm is not a prior user. Similar was the position in relation to the firm M/s.Ramdev Exports which came into existence only in 1992. 18.6 That the defendants could not be permitted to raise defence to the effect that the word "Ramdev" was public juris, in as much as, once it was established that there was a registered mark, a business carried on with reference to the said mark would acquire goodwill in course of time and the Court would always protect such a business. 18.7 That after assignment of 1990 the mark was permitted to be used under a Registered User Agreement or at least under a license. That the defendant nos.7 and 8 have themselves applied for registration vide separate applications and hence, they could not raise a contrary defence that the word "Ramdev" is commonly used. 18.8 In so far as the defence regarding delay was concerned, it was submitted that there was no delay and immediately after a period of seven years of Registered User Agreement was over in December 1998, a notice in the form of letter had been issued. Thus, there was no delay or latches. 18.9 That accordingly the balance of convenience was in favour of the plaintiff and the defendants should be restrained from using the words "Ramdev" and "Masala" on any of its products or in the name of the firm. 19. Mr.Shelat also assailed the portion of the impugned order wherein the trial Court has recorded findings partially against the plaintiff by stating that the defendants could carry on any business including that of spices, and such business could be carried out not only at the seven outlets but also by opening other shops and establishments. The only requirements being that the firm must not use either the word "Ramdev" or the word "Masala" as a firm name or on any of its packing containing the goods sold by the defendants' firms. 20. The position in law is well settled that the grant of an interlocutory injunction during the pendency of legal proceedings is a matter requiring the exercise of discretion of the Court. While exercising the discretion the Court applies the following tests: (i) Whether the plaintiff has a prima facie case; (ii) Whether the balance of convenience is in favour of the plaintiff; and (iii) Whether the plaintiff would suffer an irreparable injury if his prayer for interlocutory injunction is disallowed. The decision whether or not to grant an interlocutory injunction has to be taken at a time when the existence of the legal right assailed by the plaintiff and its alleged violation are both contested and uncertain and remain uncertain till they are established at the trial on evidence. Relief by way of interlocutory injunction is granted to mitigate the risk of injustice to the plaintiff during the period before that uncertainty could be resolved. (Reference - Gujarat Bottling Co. Ltd. Vs. Coca Cola Co. (1995) 5 SCC 545). 21. The Apex Court has in the decision of Colgate Palmolive (India) Ltd. Vs. Hindustan Lever Ltd. (1999) 7 SCC 1 specifically held that there would be various considerations in the matter of grant of interlocutory injunction, but the basic one would be non-expression of opinion as to the merits of the matter by the Court, since the issue of grant of injunction, usually, is at the earliest possible stage so far as the time-frame is concerned. After stating thus, the following seven other factors have been laid down in the said decision: (i) extent of damages being an adequate remedy; (ii) protect the plaintiff's interest for violation of his rights though, however, having regard to the injury that may be suffered by the defendants by reason therefor; (iii) the court while dealing with the matter ought not to ignore the factum of strength of one party's case being stronger than the other's; (iv) no fixed rules or notions ought to be had in the matter of grant of injunction but on the facts and circumstances of each case -- the relief being kept flexible; (v) the issue is to be looked at from the point of view as to whether on refusal of the injunction the plaintiff would suffer irreparable loss and injury keeping in view the strength of the parties' case; (vi) balance of convenience or inconvenience ought to be considered as an important requirement even if there is a serious question or prima facie case in support of the grant; (vii) whether the grant or refusal of injunction will adversely affect the interest of the general public which can or cannot be compensated otherwise. 22. One more important factor which comes into play as per settled legal position is the stage at which the party alleging infringement or passing off against the defendant approaches the Court. In a case where the defendant is yet to commence its business and utilize either the mark or the name or any combination for the purpose of its trade or business and the plaintiff makes out a prima facie case, the plaintiff would become entitled to an order of interim injunction. However, in a situation where the business is a running business, and running not just before institution of the suit, but running since quite some time, it would be open to the Court to exercise discretion in favour of the defendant and refuse injunction taking into consideration the balance of convenience. 23. The role of an appellate Court in such matters has been stated thus by the Apex Court in case of Laxmikant V. Patel Vs. Chetanbhat Shah & Anr., AIR 2002 SC 275 : "17. We are conscious of the law that this Court would not ordinarily interfere with the exercise of discretion in the matter of grant of temporary injunction by the High Court and the trial Court and substitute its own discretion therefore except where the discretion has been shown to have been exercised arbitrarily or capriciously or perversely or where the order of the Court under scrutiny ignores the settled principles of law regulating grant or refusal of interlocutory injunction. An appeal against exercise of discretion is said to be an appeal on principle. Appellate Court will not reassess the material and seek to reach a conclusion different from the one reached by Court below solely on the ground that if it had considered the matter at the trial stage it would have come to a contrary conclusion. If the discretion has been exercised by the trial Court reasonably and in a judicial manner the fact that the appellate Court would have taken a different view may not justify interference with the trial Court's exercise of discretion [(See Wander Ltd. V. Antox India P. Ltd., 1990 (Supp) SCC 727 and N.R.Dongre v. Whirpool Corporation, (1996) 5 SCC 714)]. . . . ." 24. The trial Court has recorded in paragraph 6 of the impugned order that "both the learned senior counsel for the parties have fairly conceded before the Court that they relied on M.O.U. and, therefore, in present case, M.O.U. is the most important document". However, at the time of hearing Mr.Shelat contended that the trial Court has erred in recording such a concession, in as much as, no such concession was given on behalf of the plaintiff. Therefore, at the time of hearing both the sides made elaborate arguments on the basis that the plaintiff had a preliminary objection with regard to the M.O.U. and the terms recorded therein. 25. The facts narrated hereinbefore are not in dispute. What is pertinent to note is that the dissolution deeds of the firms which were carrying on various businesses between 1975 and 1991 have not come on record. The Dissolution Deed of M/s.Ramdev Masala Stores assumes importance in light of the fact that it was dissolved on 04-11-1991 i.e. after the date of assignment i.e. 20-05-1990. However, 20-05-1990 is the effective date. The Deed of Assignment has, in fact, been executed on 20-05-1992. The reason is not far to seek. If M/s.Ramdev Masala Stores, as a firm came to be dissolved on 04-11-1991, it could not have executed the Deed of Assignment on 20-05-1992, as the firm itself, which was registered proprietor of trade mark No.447700, was no longer in existence on the date of execution. Therefore, firstly, whether any person, who was a