IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated: 12.10.2007 Coram THE HONOURABLE MR. JUSTICE P.K.MISRA AND THE HONOURABLE MR. JUSTICE K.MOHAN RAM Trade Mark Second Appeal (TMSA) No.2 of 1999 and Civil Miscellaneous Petition No.4350 of 1999 Khoday Distilleries Limited, A Company incorporated under the Companies Act, having its Registered Office at No.54, Kannayakana Agrahara, Anekal Taluk, Bangalore District, Karnataka State .... Appellant Vs. 1. The Scotch Whisky Association 20 Atholi Crescent Edinburgh Scotland, United Kingdom 2. John Walker and Sons Limited 83 St. James Street, London SWIA Ind. 3. The Deputy Registrar of Trade Marks, Trade Mark Registry, Shastri Bhavan Shastri Bhavan, No.35 Haddows Road, Chennai - 600 006, Now at Rajaji Bhavan, Besant Nagar, Chennai - 600 090 .... Respondents TMSA filed under Section109 of Trade and Merchandise Marks Act 1958 against the judgment dated 25.09.1998 made in T.M.A.No.3 of 1989. For Appellant : Mr. Vedantham Srinivasan, for Mr. C.Hanumantha Rao For Respondents : Dr. Veerendra Thulza Purkar, Assisted by Mr. Amit Jamsandikan. Mr. Swapail Desan for Mr. N.L.Rajah. https://hcservices.ecourts.gov.in/hcservices/ J U D G M E N T (Judgment of the Court was delivered by K.Mohan Ram, J.) This appeal has been filed under Section 109 of the Trade and Merchandise Marks Act, 1958 (hereinafter referred to as 'the Act') against the order of the learned Single Judge dated 25.09.1998 in T.M.A. No. 3 of 1989 and Cross Objections. The said appeal has been filed against the order dated 12.05.1989 passed by the learned Deputy Registrar of Trade Marks allowing the Rectification application No.MAS-300 and directing the removal of the Registered Trade Mark No.273203 of the appellant from the Register. 2. The rectification application relates to rectification of Registered Trade Mark No.273203 in Class 33 consisting of the words 'PETER SCOT' per se. The said trade mark was registered with effect from 3rd July 1971 by Khoday Distilleries Private Limited, the appellant herein, on the basis of user claimed since May 1968. On 21.04.1986, rectification application was filed by the respondents 1 & 2 seeking expunction of the impugned registered trade mark on the ground: (1) That the registration of impugned trade mark offends Section 9 of the Act on the ground that the mark was neither distinctive nor capable of distinguishing the registered proprietors' goods; (2) That the impugned registration also contravenes Section 11 as the impugned registered trade mark contains the word 'SCOT' which is likely to deceive or cause confusion in as much as the word 'SCOT' indicates Scottish origin for the liquors; (3) That the mark is also disentailed to protection in a Court of law (4) That in all the foregoing premises, the mark shall be removed from the register. 3. The registered proprietors namely the appellants herein filed a counter statement denying all the material averments in the application for rectification and ultimately prayed for the exercise of Registrar's discretion to allow the trade mark to remain on the register. 4. The respondents 1 & 2 filed an affidavit of IAN Glen Barclay in- house solicitor of the first respondent as evidence in support of the application for rectification and also 20 third party affidavits have been filed as evidence. But the appellant herein did not file any evidence in support of registration. 5. The Deputy Registrar of trade Marks, the third respondent herein framed the following five issues; (1) Whether the Applicants are "persons aggrieved" under Section 56; https://hcservices.ecourts.gov.in/hcservices/ (2) Whether the Application for rectification is not maintainable due to any mis-joinder of Applicants; (3) Whether the impugned mark was not distinctive of the goods of the registered proprietors at the commencement of the rectification proceedings; (4)Whether the impugned registration contravenes Section 11 at the commencement of rectification proceedings; and (5) Whether the mark is liable to be rectified and if so, in what manner. 6. On a careful consideration of the materials available on record, the third respondent held that the first respondent association cannot be regarded as a "rival in trade" to the registered proprietors and consequently held that the first respondent cannot be considered to be a person aggrieved and accordingly accepted the contentions of the appellant that the first respondent has no locus standi to maintain the application under Section 56 of the Act. But at the same time, upheld the locus standi of the second respondent. As far as the second issue is concerned, the third respondent held that the mis-joinder of applicants is not fatal. As far as the third issue is concerned, the third respondent held that the respondents 1 & 2 herein have practically admitted that the impugned mark is in use during the last several years and therefore it cannot be held that the impugned mark is not distinctive of the goods of the registered proprietors at the commencement of the proceedings and accordingly, decided the issue against the respondents 1 & 2 and in favour of the appellant herein. So far as the issue No.4 is concerned, the third respondent mainly relying upon the failure on the part of the appellants to adduce any evidence to counter the evidence adduced by the respondents 1 & 2, accepted the case of the respondents 1 & 2 and held that the impugned registration contravenes Section 11 on the date of the rectification proceedings. In the absence of contra evidence on the side of the appellant, the third respondent accepted the plea of deceptive element in the impugned mark and also rejected the plea of acquiescence put forth by the appellant. 7. In the appeal against the order passed by the third respondent, filed by the appellant herein, the learned Single Judge agreed with the findings of the third respondent and dismissed the appeal. 8. In his order the learned Singe Judge in paragraphs 29, 36 and 37 has observed as follows:- "29. The reputation and good will earned by Scotch Whisky has been set out at great length in the affidavit of the solicitor to the Scotch Whisky Association. The appellant did not choose to controvert any of the averments in that affidavit or in the other affidavits nor did it offer any evidence. The objection statement filed by the appellant cannot be treated as evidence. 36. It is unfortunate that the appellant had chosen to refrain from placing any material before the authority to refuse the claim for rectification. Apparently appellant did not have great faith in the validity of the registration and did not consider it worthwhile even to cross-examine the witnesses who had filed the https://hcservices.ecourts.gov.in/hcservices/ affidavits in support of the application for rectification. It is evident that adoption of the mark 'Peter scot' by the appellant was for the reasons mentioned in the affidavit of Peter Jeffery Warren. The mark was adopted apparently with a view to take advantage of the good will associated with Scotch whisky by using the word 'Scot' as part of the trade mark for the whisky manufactured by the appellant. 37. The conduct of the appellant subsequent to the registration is not of much materiality. The appellant has continued to use that mark. The fact that appellant did not do anything more than use the mark does not have the effect of discharging it from the consequences of adopting a mark which should not have been registered." 9. Having observed so and by applying the legal principles applicable for deciding the application for rectification filed under Section 56 of the Act, the learned Single Judge held that the trade mark that was adopted by the appellant 'Peter Scot' was in relation to whisky and when so used, the mark was deceptively similar to 'Scotch' and was likely to lead a consumer of whisky into thinking that the whisky manufactured in this country by the appellant and sold under the trade mark 'Peter Scot' was also scotch whisky. The learned Single Judge also held that the registering authority should have declined to register that mark notwithstanding the fact that no objection had been filed. The learned Single Judge further held that the facts of this case are not such as to warrant the conclusion that there has been acquiescence. 10. The learned Single Judge by applying the legal principle that the statutory standard is not actual confusion and deception but likelihood thereof, held that the term 'Scot' when used in association with whisky of non-Scottish origin is inherently capable of and is likely to cause confusion and deception. The learned single Judge further held that the discretion exercised by the third respondent is not the result of any arbitrary exercise of power but is based upon the material placed before the authorities and does not require interference. The learned Single Judge held that simply because Scotch Whisky Association consists of manufacturers by itself is insufficient to enable the association to maintain the action by itself but however it can do so along with a member who is prejudicially affected by the registration and accordingly allowed the cross-objections. 11. For proper appreciation of the contentions put forth by the learned counsel on either side it will be useful to refer to the following provisions of the Act viz.:- "Section 11: Prohibition of registration of certain marks.: A mark-- (a) the use of which would be likely to deceive or cause confusion; or (b) the use of which would be contrary to any law for the time being in force; or (c) which comprises or contains scandalous or obscene matter; or https://hcservices.ecourts.gov.in/hcservices/ (d) which comprises or contains any matter likely to hurt the religious susceptibilities of any class or section of the citizens of India; or (e) which would otherwise be disentiled to protection in a Court; shall not be registered as a trade mark. Section 32: Registration to be conclusive as to validity after seven years: Subject to the provisions of Section 35 and Section 46, in all legal proceedings relating to a trade mark registered in Part A of the register (including applications under section 56), the original registration of the trade mark shall, after the expiration of seven years from the date of such registration, be taken to be valid in all respects unless it is proved- (a) that the original registration was obtained by fraud; or (b) that the trade mark was registered in contravention of the provisions of Section 11 or offends against the provisions of that Section on the date of commencement of the proceedings; or (c) that the trade mark was not, at the commencement of the proceedings, distinctive of the goods of the registered proprietor." 12. Heard Mr.Vedantham Srinivasan, learned senior counsel for Mr.C.Hanumantha Rao learned counsel for the appellant and Mr.Veerendra Thulza Purkar learned counsel for the respondents. 13. Mr.Vedantham Srinivasan, learned senior counsel for the appellant submitted that respondents 1 and 2 in their rectification application raised the following grounds namely:- (i) the mark is not distinctive; (ii) it was not capable of distinguishing itself as the goods of khodays; (iii) the use of the mark is likely to deceive or confuse; (iv) non-user of the mark; and the third respondent rejected the objections of respondents 1 and 2 on distinctiveness, non-user and locus standi and therefore it is not open to respondents 1 and 2 to plead the same in the above appeal and the issue to be decided in the appeal is whether the mark was likely to deceive and confuse the consumer. (II) Learned senior counsel for the appellant further submitted that the cause of action for filing the rectification petition accrued from the date of knowledge i.e., 20.09.1974 and the application ought to have been made within three years from the date i.e., on or before 19.09.1977 as the period of limitation prescribed under Article 137 of the Limitation Act is three years. Since the rectification application has admittedly not been filed in time, the same is barred by limitation. In support of his contentions, the learned senior counsel based reliance on the decision reported in A.I.R.1977 S.C. 282 = 1976 (4) S.C.C. 634 (Kerala State Electricity Board Vs. T.P.Kunhallumma), wherein it is held that the words "any other application" will include not only any application under Code of Civil Procedure, but it will include applications under any Act and therefore, Article 137 of the Limitation Act applies to the applications filed under any Act. Learned senior counsel also relied upon the https://hcservices.ecourts.gov.in/hcservices/ decisions reported in 1999 (19) P.T.C. 718 and 2002 (6) Bombay CR 796 = 2003 (26) P.T.C. 517 (Bombay) (Rakesh Kumar Gupta Vs. Goresh Domesztic Appliances and others). (III) Regarding the scope of interference by the High Court in an appeal filed under Clause 15 of the Letters Patent, the learned senior counsel for the appellant relied upon the decision of the Apex Court reported in A.I.R. 1974 S.C. 2048 (Smt. Asha Devi Vs. Dukhi Sao and another). In the said decision, it is laid down as follows:- "The first contention urged before us on behalf of the appellant is that the Letters Patent Bench was not authorized in law to reverse the concurrent findings of fact of the Subordinate Judge and the learned Single Judge of the High Court. It is submitted that a Letters Patent Appeal stand on the same footing as a second appeal and it was therefore not open to the Letters Patent Bench to reverse the concurrent findings of fact of the two courts below. We are of opinion that this contention is not correct. A Letters Patent appeal from the judgment of a learned Single Judge in a first appeal to the High Court is not exactly equivalent to a second appeal under Section 100 of the Code of Civil Procedure, and therefore, it cannot be held that a Letters Patent appeal of this kind can only lie on a question of law and not otherwise. The matter would have been different if the Letters Patent appeal was from a decision of a learned Single Judge in a second appeal to the High Court. In these circumstances it will be open to the High Court to review even findings of fact in a Letters Patent Appeal from a first appeal heard by a learned Single Judge, though generally speaking the Letters Patent Bench would be slow to disturb concurrent findings of fact of the two courts below. But there is no doubt that in an appropriate case a Letters Patent Bench hearing an appeal from a learned Single Judge of the High Court in a first appeal heard by him is entitled to review even findings of fact. The contention of the appellant therefore that the Letters Patent Bench was not in law entitled to reverse the concurrent findings of fact must be negatived". (IV) Learned senior counsel for the appellant by pointing out various contradictions in the third party affidavits filed by respondents 1 and 2 submitted that these evidence are not worthy of acceptance. Learned senior counsel further contended that, according to respondents 1 and 2 themselves, 46 brands contain the name of 'Scot' as part of their brand name, but no one has complained about confusion or deceit in respect of these band name, because the universal practice is to demand a particular brand by its full name in the whisky trade; therefore there can be no scope or cause for any sort of confusion or deceit particularly having in mind the kind of customers who consume scotch whisky as also its availability and affordability in India where the import and trade were severely restricted and regulated; the third party affidavits filed in 1986 are to be rejected as false, fabricated, contrived, untrue, unbelievable and contrary to the course of common human conduct. https://hcservices.ecourts.gov.in/hcservices/ (V) The following submissions have been made by the learned senior counsel for the appellant regarding the third party affidavits, namely:- (a) no deponent states that he has been deceived into thinking that "Peter Scot" was a 'Scotch Whisky'; (b) all the stamp papers are purchased by Little and Co., the counsel for respondents and hence, they cannot be treated as independent witnesses; (c) The vital aspect that the affidavits have been procured by M/s.Little and Company, the Solicitors of the respondent had not been considered by the third respondent and by the learned Single Judge; the stamp papers on which the affidavits have been engrossed stand in the name of M/s.Little and Company; this shows that the affidavits have been obtained by respondents 1 and 2 for production before the third respondent and hence they are not independent; (d) Scotch Whiskey is very expensive; it is generally consumed only by rich businessmen, industrialists, well paid executives and successful professionals like Doctors, Chartered Accountants or Lawyers; there is no evidence from any such person; all the deponents are ordinary individuals, some even workers and some waiters and bar attendants; none of them have stated their financial status; it is unbelievable that they could afford to drink scotch whisky, which wold have cost at least Rs.60 per peg in bars in respect of IMFL; (e) most of the bar attendants knowing fully well that PETER SCOT is an Indian Whiskey deliberately mislead their customers that it was Scot Whisky; this kind of misrepresentation could be made with any Indian Whisky bearing a foreign name or work as brand name e.g., Diplomat, Ambassador, McDowell's and so on; their evidence does not prove that a customer without any misrepresentation by them was deceived into thinking that "Peter Scot" was scotch whisky; practically, all the deponents have stated that Peter Scot was an Indian Whisky; none of the deponents refer to the lion device; In Ex/"g" (Price Lists of liquors) exhibited in brand hotels, Indian and Foreign Whiskies are listed separately; generally customers order by brand or after seeking the price list; hence, there is no likelihood of confusion; (f) there is no evidence given by the respondents to show that Peter Scot has been used as a trade mark for scotch whisky; the evidence does not show that the name of any person has been used as a trade mark for scotch whisky; McDonald, MacAndrews are Scottish names used as brand name for Indian Whisky; the respondents did not raise any objection to this trade mark; in the menu cards of bars and restaurants, the Scottish Whisky and Indian brands of whisky are separately listed; (g) the very same persons who have filed evidence before the Registrar have also examined themselves in favour of respondents 1 and 2 in Suit No.1352 of 1986 and that itself will show that the deponents are stock witnesses and therefore no reliance can be placed upon them; that the third respondent himself has come to the conclusion that the evidence of the parties are unsatisfactory and as such the third respondent by invoking the proviso to Section 99 of the Act should have recorded evidence; (h) I.G.Barkley is an In house Solicitor of the first respondent and he cannot file an affidavit on behalf of his client; in support of the said contention, the learned senior counsel relied upon the decision https://hcservices.ecourts.gov.in/hcservices/ reported in A.I.R.2003 AP 445 (Pasupuleti Subba Rao Vs. Nandavarapu Anjaneyulu). (VI) Learned senior counsel for the appellant submitted that though the affidavit of Mr.Jefrey Warran was filed, the same has been overlooked by the third respondent. In the said affidavit in paragraph 3 it is averred as follows:- "... While I was employed by Khoday, the whisky we produced was sold under at least two marks, namely RED KNIGHT and PETER SCOT. The brand name "PETER SCOT" was coined primarily with my father in mind i.e. using his forename "Peter" and his nationality "Scot". Another factor behind coining of this brand name was the internationally known British explorer "Captain Scott", who is widely known as an artist, naturalist and Chariman of the World Wildlife Fund. Although the name "Scott" is spelt with two "t's, it is phonetically the same as "Scot". but the third respondent has not considered the affidavit filed by Mr.Jefrey Warran which will amount to patent non-application of mind. Learned senior counsel submitted that the learned Single Judge has noticed and stated that the name of the employee cannot be a ground to name a brand, overlooking the fact that prior to the employment of Peter Jefrey Warren and his father Peter Warren, Khoday did not make any whisky and therefore the appellant as blender and brewer of this brand ascribed his name to the whisky. (VII) Learned senior counsel for the appellant further submitted that under Section 11 of the Customs Act, imports of goods is prohibited except with the permission upon import license given under the Imports and Exports Control Act, 1947; the distribution and sale of such liquor are restricted only to Five Star Hotels and Tourism Hotels approved by the Department of Tourism, Government of India Embassies, shops and airlines; the price of the goods added with 230% customs duty 50% sales tax put it way above the ordinary consumers of the whisky; the laws show that the goods are not available across the country; Foreign liquors have to be specifically produced for and obtained; therefore, the issue of confusion does not arise at all; in addition, the liquor being difficult to procure, it is way above most of the persons who have filed the affidavits; in fine, the pricing, quality and regulations remove any kind of doubt over the brands; (VIII) Learned senior counsel for the appellant further submitted that the proper time for rectification was after they had knowledge of the publication of the application for registration of the trademark PETER SCOT; no opposition or objection has been taken from 1968 until 1986 by which time, the appellants has established a reputation for the trade name and trade mark; "PETER SCOT" had found acceptance from customers not only in India but throughout the world; the figures from the year 1968 up to date would show the extent of reputation earned by the Indian company; the demand it had created among the discerning liquor customers; nowhere has khoday's claimed PETER SCOT as Scotch Whisky; the lable and the carton clearly indicate then it is a product of India distilled, blended and bottled in India in Bangalore, Karnataka State as required by law; https://hcservices.ecourts.gov.in/hcservices/ this satisfies the requirements of the Trade Marks Rules Part II Schedule 4 Item 43; there is, no likelihood of any confusion or deception as contended by the respondents, since the custom of the trade is to sell goods by description and by brand name only and not by the generic name like scotch or whisky or brandy or gin or rum or beer or vodka. (IX) Learned counsel further submitted that every wine and every spirit, like cigarettes is only sold by the brand name and the customer also asks and demands these goods only by the brand name; this will clearly prove beyond doubt that the affidavits filed by the Scotch Whisky Distillers Association are procured, false, fabricated contrived and obtained for the purpose of this litigation; they do not deserve any credibility and no reliance can be placed on any of them since many of the submissions are self-contradictory and self defeating; the respondents did not establish the allegation of deception or confusion; on the other hand, some of the affidavits would reveal that the deponents are fraudulent persons because by their own admission, they have cheated the public by giving them something other than what was sought by the customers; not one of the affidavits proves the contention of the respondents as to deception or confusion; those affidavits would amount to offences under Section 191 of the Indian Penal Code and action should be taken against the deponents and the persons who relied upon them and filed them into Court for perjury; the filing of perjured affidavits would amount to sharp practice, fraud on court and abuse of process of law. (X) Learned senior counsel for the appellant further submitted that Section 26 of the