A suit for passing off can continue even when suit for infringement was liable to be stayed: High Court of Delhi

CM428 2021 IN THE HIGH COURT OF DELHI AT NEW DELHI % Reserved on: 14th July 2021 Pronounced on: 6th August 2021 + CM428 2021 CM APPL.20526 2021PARVEEN KUMAR GUPTA .....Petitioner Through: Mr. S.K. Bansal and Mr. Ajay Amitabh Suman Advocates Versus RAVI CHADHA AND ORS. .....Respondents Through: Mr. Ashish Deep Verma Ms. Kamya Ritu Verma Mr. Vijay Singh and Ms. Bharti Sharma Advocates CORAM: HON BLE MS. JUSTICE ASHA MENON JUDGMENT 1. This petition has been filed under Article 227 of the Constitution of India seeking an order to quash and set aside the impugned order dated 6th April 2021 passed by the learned ADJ 02 Central Delhi Tis Hazari Courts Delhi allow the application under Section 5 of the Limitation Act 1963 dated 30th December 2020 filed by the petitioner and further allow the Review Petition under Section 114 of the Code of Civil Procedure 1908dated 22nd January 2018 filed by the CM428 2021 petitioner in Suit bearing CS No.312 2015 titled “Parveen Kumar Gupta v. Mr. Ravi Chadha & Ors.” pending before the learned Trial Court. 2. The petitioner is aggrieved on account of the fact that his suit which he had filed against the defendants for infringement of his proprietary trade mark “RACER” as also passing off their goods as that of the petitioner and other reliefs was stayed by the learned Trial Court vide order dated 6th March 2017. This order he challenged by way of CM737 2017 which was disposed of vide order dated 6th December 2017 permitting the petitioner to withdraw that petition and granting liberty to approach the Tribunalby Review Petition. Thereafter the petitioner filed a Review Petition but the learned Trial Court was of the view that the application for review had been filed beyond the period of limitation. As a result the petitioner filed an application under Section 5 of the Limitation Act for condonation of delay on the ground that time had been spent before the Hon’ble High Court in pursuing the CMpetition. However the learned Trial Court rejected the application under Section 5 of the Limitation Act and observed that since the High Court while disposing of the CMhad not commented on limitation no ground for condonation of delay was made out. As a result thereof the Review Petition was also dismissed. 3. Mr. S.K. Bansal learned counsel for the petitioner has relied upon the judgment of this court in J. K. Oil Industries v. Adani Wilmar Limited 2018 SCC OnLine Del 9367 to submit that when a suit was filed for infringement of trade mark as also for passing off the filing of a rectification petition before the Intellectual Property Rights Board CM428 2021 would result in the stay of the suit as far as infringement of trade mark was concerned under Section 124 of the Trade Marks Act 1999 but that suit with regard to passing off was to continue. Hence it was prayed that the review of the order dated 6th March 2017 be allowed and the suit be directed to be continued qua the passing off. 4. Mr. Ashish Deep Verma learned counsel for the respondents on the other hand submitted that the court was empowered even without objections being taken to satisfy itself regarding limitation when any suit or application or appeal is filed before it. Therefore merely because the respondents had not raised such an objection would not prevent the court from looking into the issue of limitation. Further it was submitted that the application for condonation of delay was filed three years after the order dated 6th March 2017 and the filing of the application for review. There was no explanation whatsoever for not filing the application for condonation of delay during this entire time. Therefore the learned Trial Court was justified in not condoning the delay. 5. With regard to the prayer of the petitioner for continuing the suit for passing off the learned counsel submitted that since an injunction was already in force against the respondents and the respondents were not using the trade mark “RACER” no prejudice was being caused to the petitioner if the suit waited for the disposal of the rectification petition filed by the respondents before the IPRB. Thus the learned counsel submitted that the present petition deserved to be dismissed. 6. In response learned counsel for the petitioner submitted that since the High Court had allowed the petitioner to file an application for review filing of the application for condonation of delay was over CM428 2021 looked. The cause shown for not immediately filing the review application after the impugned order dated 6th March 2017 had been passed was clearly explained. The application under Section 5 of the Limitation Act was no doubt filed on 30th December 2020 but that was only because the review application remained pending since it was filed in February 2018 and no one had raised this issue of limitation till the learned Trial Court did so. In the circumstances it was prayed that the delay be condoned and directions be issued for revival of the suit qua the reliefs relating to passing off etc.. 7. A perusal of the order dated 6th March 2017 passed by the Trial Court would reveal that an application under Section 124 of the Trade Marks Act had been filed by the present respondents seeking stay of the proceedings due to initiation of rectification proceedings filed by them before the IPRB. The learned Trial Court has noted in para 3 that it was submitted on behalf of the petitioner plaintiff that as the suit was a composite suit for infringement and passing off the suit could proceed. However the learned Trial Court relied upon the judgment of this court in Data Infosys Ltd. & Ors v. Infosys Technologies Ltd. 2016PTC 209[FB] and Micolube India Ltd. v. Maggon Auto Centre & Anr. 2010PTC 462and stayed the suit under Section 124 of the Trade Marks Act. It adjourned the case sine die. 8. This order was challenged as noticed hereinabove by the petitioner which petition CM737 2017 was disposed of by this court on 6th December 2017. The following order was passed: “1. After some hearing the counsel for the petitioner submitted that he may be allowed to withdraw the CM428 2021 present petition and the applications filed therewith as according to him there is an error apparent on the face of the impugned order wherein the fact that the suit seeks not only the relief of permanent injunction to restrain the opposite party against infringement of trade mark but also reliefs in the nature of passing off delivery etc. which are not covered by the provision contained in Section 124(1) of Trade Marks Act 1999 which has been invoked was overlooked. The petitioner seeks liberty to approach the Tribunal by review petition. 2. The petition and the applications are disposed of as withdrawn with liberty as prayed granted.” 9. It is apparent from this order that this court had noted the submissions to the effect that the suit was also one for passing off delivery etc. which was not covered under Section 124(1) of the Trade Marks Act and which fact had been overlooked in the orders of the learned Trial Court. It was in the light of these submissions that when the petitioner sought liberty to approach the Trial Court with a Review Petition the prayer was allowed. It does appear that the question of limitation had not been agitated before this court during those proceedings. The learned Trial Court appears to have fallen into error in rejecting the application under Section 5 of the Limitation Act by observing that it was taking a ‘holistic reading’ of the order dated 6th December 2017. In our view a ‘holistic reading’ would have pointed out to the learned Trial Court that permission to file a review petition had been granted in the backdrop of the submission that while a suit for infringement could be stayed under Section 124 of the Trade Marks Act CM428 2021 the suit for passing off could continue. 10. This court was dealing with a similar issue in J. K. Oil Industrieswhere it referred to several decisions including those that have been relied upon by the learned Trial Court in its order dated 6th March 2017 to stay the suit namely Data Infosys Ltd.and Micolube India Ltd.as also the judgments of the Division Bench of this court in Puma Stationer P. Ltd. v. Hindustan Pencils Ltd. 2010PTC 479and Formica International Ltd. v. CaprihansPvt. Ltd. AIR 1966 Cal 247 to hold that a suit for passing off can continue even when the suit for infringement of trade mark was liable to be stayed under Section 124 of the Trade Marks Act. 11. The settled law is thus that Section 124 of the Trade Marks Act does not provide for stay of action against passing off and is applicable only where a rectification application cancellation has been sought against the registered trade mark that a plaintiff claims to be exclusively its own. This is intended to avoid conflicting decisions by the Civil Courts and the Tribunal. There is no such occasion arising in a suit for passing off. It is only when clever drafting discloses the intent of the plaintiff to get over the statutory bar being aware of the rectification proceedings commenced against the trade mark that it claims is exclusively its own as observed in Formica International Ltd.that the entire suit would have to be stayed till the rectification proceedings are completed. No such plea has been taken in the present case. In fact such a plea cannot be taken as it is after the institution of the suit that the defendants respondents have filed an application for rectification. CM428 2021 12. It is therefore more than apparent that learned Trial Court has misread the judgments of this court in Micolube India Ltd.and Data Infosys Ltd.and there is an error apparent on the face of the impugned order. The learned Trial Court ought not to have directed that the entire suit be stayed though this court including in J. K. Oil Industrieshas consistently held that while the suit for infringement of trade mark has to be stayed under Section 124 of the Trade Marks Act when a rectification petition is filed before the IPRB an action for passing off could continue. 13. The petition is accordingly allowed. The order dated 6th March 2017 passed by the learned Trial Court is modified to read that the Civil Suit No.577 2016shall remain stayed under Section 124 of the Trade Marks Act qua the action for infringement of trade mark but shall continue qua the relief sought against passing off and connected reliefs. The pending application also stands disposed of. 14. The judgment be uploaded on the website forthwith. A copy of this judgment be sent electronically to the learned Trial Court. JUDGE AUGUST 06 2021 s ms 

Summary: A lawsuit filed for passing off to protect an unregistered trademark can continue even when the trademark infringement suit was liable to be stayed under Section 124 of the Trade Marks Act. This was upheld in the judgement passed by a bench of the High Court of Delhi consisting of Justice Asha Menon in the case of Parveen Kumar Gupta v Ravi Chadha &amp; others [CM (M) 428/2021, CM APPL 20526/2021] pronounced on 6th August 2021. The petitioner, Parveen Kumar Gupta was first aggrieved over the fact that a lawsuit he filed against the defendants for trademark infringement and passing off their goods as his was stayed by the Trial Court. The order which was passed by ADJ-02 Central Delhi, permitted the petitioner to withdraw his petition and granted him liberty to approach the Tribunal by review petition. Upon filing a review petition, the Trial Court held that the review petition had been filed beyond the period of limitation and refused to accept the petitioner’s application under Section 5 of the Limitation Act. As a result of this the petitioner’s Review Petition was also dismissed. He filed the present petition under Article 227 of the constitution praying that the High court of Delhi quashes the impugned order, allows for the application under Section 5 of the Limitation Act and finally allows for the Review Petition dated 22nd January 2018 filed by the petitioner under Section 144 of the Code of Civil Procedure 1908. The petitioner’s counsel cited the case of J.K. Oil Industries v. Adani Wilmar Limited [2018 SCC OnLine Del 9367] to contend that when a suit is filed for infringement of trade mark as also for passing off, the filing of a rectification petition before the Intellectual Property Rights Board would result in the stay of the suit as far as infringement of trademark was concerned under the Act, however the suit should be allowed by the court. The court noted that it was settled law that Section 124 of the Trade Marks Act does not provide for stay of action in cases of passing off and is furthermore applicable only if an application for rectification or cancellation has been sought against the registered trademark and the plaintiff contends exclusively belongs to himself.