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CASE NO.: Appeal (civil)  8815-8816 of 2003

PETITIONER: Ramdev Food Products Pvt. Ltd.

RESPONDENT: Arvindbhai Rambhai Patel & Ors.

DATE OF JUDGMENT: 29/08/2006

BENCH: S.B. Sinha & P.P. Naolekar

JUDGMENT: J U D G M E N T W I T H  CIVIL APPEAL NO.8817 OF 2003

S.B.SINHA, J :

       Interpretation of the provisions of the Trade and Merchandise Marks  Act, 1958 (for short "the 1958 Act") arises for consideration in these  appeals arising out of a judgment and order dated 08.05.2003 passed by the  High Court of Gujarat at Ahmedabad.

FACTS

       The appellant is a company incorporated under the Companies Act,  1956.  The other parties to these appeals were/are its Directors.   

       In the year 1965, one Rambhai Patel started a business of grinding  and selling spices under the name and style of ’Ramdev’.  He had three  sons and two daughters, Arvindbhai, Hasmukhbhai and Pravinbhai were his  sons.  A partnership firm was constituted in the year 1975.  It applied for  registration of the trademark ’Ramdev’, which was granted on 03.01.1986  being Trademark No.447700. Another partnership deed was executed in  supersession of the earlier partnership deed wherein new partners were  inducted.  On 06.01.1989, the appellant company was incorporated  whereby and whereunder the pattern of shareholding amongst the three  brothers was : Arvindbhai Group (40%); Hasmukhbhai Group (30%); and  Pravinbhai Group (30%). The registered trademark was assigned by   ’Ramdev Masala Stores’ in favour of the appellant by a deed dated  20.05.1990. However, by the said deed the goodwill was not assigned. The  trademark together with the goodwill was assigned in favour of the  appellant company by another deed of assignment dated 20.05.1992.  A  ’user’ agreement was also entered into by the same parties permitting the  firm ’M/s. Ramdev Masala Stores’ to use the said trademark subject to the  terms and conditions stipulated therein.  Another partnership firm being  ’Ramdev Masala’ was started on 01.04.1991 for carrying on the trade of  grinding and trading of masalas.   A user agreement was also entered into  by and between the appellant company and the said firm permitting the  latter to use the registered trade mark for seven years i.e. from 01.04.1991  to 31.03.1998 in terms whereof it was stipulated :

"3.     AND WHEREAS the User is a firm  registered under the Indian Partnership Act and  wishes to use in the city of Ahmedabad except the  area of Naroda City of Ahmedabad and district  Mehsana, Gujarat State (India) registered  proprietors aforesaid registered Trade Mark  (hereinafter referred to as "the said Trade Mark")  in respect of the said goods."User restricted to the

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cities of Ahmedabad and Mehsana;

4(C)    That the User will continue to use the said  mark only so long as he manufactures his goods in  accordance with the terms and specifications  devised by the Registered Proprietor.          4(E)    That within the terms of this agreement and  thereafter the User will not acquire any right to the  said mark by any means whatsoever except in  accordance with law.          4(G)    That the User covenants not to use the said  Trade Mark in the advertisement, journal label  and/ or other documents in such a manner that the  said Trade Mark may in any way be diluted in  respect of distinctiveness of validity if necessary  and indication either usually, phonetically may be  given to the purchasing public to the extent that the  User uses the said mark by way of permitted use  only."    

       Indisputably, the firm ’Ramdev Masala Stores’ was dissolved on  04.11.1991. Yet again a new partnership firm came into being under the  name and style of ’Ramdev Exports’.   The said partnership firm was  constituted for the purpose of export of spices manufactured by the  appellant company.   

It is not in dispute that the business of manufacturing and selling of  spices under the trade name of ’Ramdev’ was being run by the three  brothers through the appellant company.   

Another partnership firm being ’Ramdev Masala’ was being run  through seven outlets for retail sale of the products of the Company.

It is also not in dispute that both the firms ’Ramdev Masala’ and  ’Ramdev Exports’ had distinct and separate existence.  Their areas of  operation were also different.  The respective roles assigned to each of the  partnership firm had clearly been specified in their respective partnership  deeds.   Whereas M/s. Ramdev Masala was allowed to manufacture and  trade in spices, the business of M/s. Ramdev Exports was limited to export  of the spices manufactured by the appellant company. Yet again, the  partnership deed of Ramdev Masala was amended on 01.04.1995; in terms  whereof the business of the said firm was confined only to trading in spices  manufactured by the appellant company.  In other words, the respective  businesses under the partnership deeds of the said firms are stated to be as  under :

a.      Type of business of Ramdev Masala under the first partnership deed  was grinding and selling of spices. b.      Type of business of M/s. Ramdev Masala under the second  partnership deed was trading in spices. c.      The business of M/s. Ramdev Exports was exporting the goods  manufactured by the appellant company.

DISPUTES

Disputes and differences having arisen between the members of the  family and in particular between the three brothers, the same was settled by  their well-wishers, pursuant whereto and in furtherance whereof a  Memorandum of Understanding (MOU) was executed by and between the  parties, to which we would advert to a little later.

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LEGAL PROCEEDINGS

On the premise that the respondents had been infringing its rights,  trade name and logo, the appellant company filed a suit in the City Civil  Court, Ahmedabad, which was numbered as CS No.828 of 2000, inter alia,  for the following reliefs :

"A)     The defendants by themselves, their  servants, agents, partners and all persons claiming  through or under them be restrained by a perpetual  order of this Hon’ble Court from, in any manner,  using the trade mark ’RAMDEV’ in their label,  packing materials, advertising materials, business  materials etc., in respect of goods which are  covered under registration of the plaintiff’s mark  and/or any mark which may be identical and/or  deceptively similar to the plaintiff’s registered  trade mark and thereby restrain them from  infringing the plaintiff’s registered trade mark  bearing No. 447700 and  other marks bearing  No.531084, 531085, 545253, 545253, 545255,  545257 and 545258."    

An application for injunction was also filed wherein the following  interim prayers were made :

"(A)    The defendants by themselves, their  servants, agents, partners and all persons claiming  through or under them be restrained by an order of  temporary injunction of this Hon’ble Court from,  in any manner, using the trademark ’RAMDEV’ in  their label, packing materials, advertising  materials, business materials etc. in respect of  goods which are covered under registration of the  plaintiff’s mark and/or any mark which may be  identical and/or deceptively similar to the  plaintiff’s registered trade mark and thereby  restrain them from infringing the plaintiff’s  registered trade mark bearing No.447700 and other  marks bearing No.531084, 531085, 545253,  545255. 545257 and 545258, till the hearing and  final disposal of the suit.

(B)     The defendants by themselves, their  servants, agents, partners and all persons claiming  through or under them be restrained by an order of  temporary injunction of this Hon’ble Court from  using in relation to any spices, masala bearing the  name ’RAMDEV’ as produced with separate list  or any label or packing material or advertising  material containing the trade mark ’RAMDEV’  and/or any mark which is identical and/or mark  containing word ’RAMDEV’ either on label or in  trading style or trading name, so as to pass off the  defendants goods and/or business as that of the  plaintiff, till the hearing and final disposal of the  suit."   

An application was also filed for appointment of a Court  Commissioner.

DEFENCES OF THE RESPONDENTS      

       The principal defences raised by the respondents in the said suit are  as under:

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(i)     The appellant has no exclusive statutory right to use ’Ramdev’  apart from the label as a whole.   (Sections 15 and 17 issue)

(ii)    The first respondent has a right to use the mark as concurrent  user; (Section 29 issue)

(iii)   That the use complained of is protected, as bona fide user and  furthermore the appellant is not entitled to the reliefs sought for as  the same were barred under the principles of estoppel,  acquiescence, etc.

ORDER ON THE APPLICATION FOR INJUNCTION

       By a judgment and order dated 17.03.2000, the learned Trial Judge  opined that the plaintiff company was the owner of the trademark.  It was  further held that the defendants had started manufacturing and marketing  the same business which is deceptively similar to the trademark of the  plaintiff which created confusion in the mind of public.  However, the  defendants were given liberty to manufacture spices in their factory and sell  the same in seven outlets under the trademark ’Ramdev Masala’.  

On an interpretation of the said MOU dated 30.05.1998, it was, inter  alia, held :

"\005Therefore, if there is agreement between the  parties that the defendant No.1 should purchase  spices from the plaintiff for the purpose of retail- sale in 7 outlets, it must have been mentioned in  the MOU. No such condition is mentioned. If that  be so, it cannot be presumed that the defendants  should purchase spices from the plaintiff for the  purpose of retail-sale in 7 outlets. In case of  written-agreement between the parties, it should be  taken as it is. It should be read as it is. No  additional terms and conditions or agreement can  be presumed.  Therefore, in absence of any  specific condition that the defendants should sell  spices by using trade-mark "Ramdev" in 7 outlets  by purchasing the goods from the plaintiff is not  believable.

13.     This condition also does not seem to be  possible\005                14.     \005The defendants have arranged for the  packing material bearing regd. trade-mark  "Ramdev" and used the same for the purpose of  retail business.  These facts clearly suggest that  there was no restriction on the defendants to  purchase spices from the plaintiff for the purpose  of retail business in 7 outlets.  On the contrary, the  defendant was at liberty to manufacture in their  factory and sell the same in 7 outlets for the  purpose of retail business.

15.     Relevant portion of MOU is reproduced  earlier.  Accordingly, the defendants are permitted  to use the trade-mark or logo  "Ramdev" for the  purpose of retail-sale in 7 outlets.  The words used  suggest that the defendants were entitled to use the  trade-mark "Ramdev" without any restriction for  the purpose of retail sale of spices.  It was not  compulsory on the part of the defendants to

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purchase spices from the plaintiff.  They can  arrange or manufacture in their way and sell the  same in 7 retail outlets under the trade-mark  "Ramdev".

21.     \005Therefore, he cannot sell spices in other  shops under the trade-mark "Ramdev".  He can run  spices’ business and other business in his shop  Ramdev Masala.  The plaintiff cannot restrict  him."

The respondents had been selling a large variety of spices under the  trade name "Swad".  However, the packings and labels adopted by them  were also held to be deceptively similar to the trade-mark "Ramdev" of the  appellant.  Although they had been manufacturing and marketing spices  under the trade name ’swad’, the respondents had been writing the words  "Ramdev Masala" in such a manner that it creates confusion in the minds  of customers.  It was, therefore, opined that the respondents had been  passing off their goods as if it was manufactured by the appellant.  The  learned Judge, however, opined that as per the provisions of the Prevention  of Food Adulteration Act, 1955, it was mandatory to disclose the name and  address of the manufacturer they have been writing their name "Ramdev  Masala" as manufacturer which does not create any deception or confusion.   Noticing that the appellant got it entered in the records of the Registrar of  Trade Mark by following due procedure and acknowledging that the  appellant company is the registered proprietor of trade name bearing logo  of "Ramdev", it was held that as the respondents had started manufacturing  and marketing spices under the trade name "swad" and they had been  selling spices in small packets and in view of the averments made by the  appellant that the labels and packings adopted by the respondents were  deceptively similar to the registered trademark ’Ramdev’ and, therefore,  passing off goods as it is manufactured by the plaintiff.  The learned Judge  further observed :

"\005Comparing the packing material and label of  both the parties, it is clear that the label of the  defendants is phonetically and visibly similar with  the label of the plaintiff.  It is deceptively similar  with the label of the plaintiff.  It creates deception  as well as confusion in the minds of customers  who are literate, illiterate, male or female, who  used to purchase in retail market from small shops  as well as big departmental stores.  Therefore,  there is every likelihood of passing off the goods  of the defendants as if it is manufactured by the  plaintiff."

It was opined :

"As stated earlier, it is proved that the  plaintiff is the regd. proprietor of trade-mark  "Ramdev" bearing registration No.44770.  The  plaintiff has acquired goodwill and reputation of  the trade mark "Ramdev Masala" in the market.   Packing and label adopted by the defendants for  their products "Swad" containing the word  "Ramdev Masala" on the front page of the label in  larger size, in first alphabet definitely creates  deception and confusion.  It is deceptively similar  with the trade-mark of the plaintiff.  Therefore, the  plaintiff has proved prima facie case on this point.   As regards the balance of convenience and

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irreparable injury, it is settled legal position that in  case of deception public at large is affected.   Unvaried customers are likely to be deceived.   When prima facie case is proved, it is necessary in  the interest of justice to maintain status quo.   Considering above all facts and circumstances,  injunction should be granted against the  defendants."

       The learned Judge summarised his findings as under :

"Para 41\005 (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".

       The respondents were, thus, restrained by temporary injunction from  using registered trademark, logo ’Ramdev’ or any other trademark, which  is identical and deceptively similar to the trademark of the appellant in  respect of label and packing material of their goods except in seven outlets  mentioned in MOU till final disposal of the suit.   They were held to be at  liberty to run business of spices under the trade name ’Ramdev Masala’  without using the registered trademark ’Ramdev Masala’ except in seven  outlets.

HIGH COURT JUDGMENT

       Both the parties preferred appeals thereagainst before the High  Court.  The High Court by reason of its judgment opined:

(i)     The chain of events goes to show that the business of grinding  spices by using the words "Ramdev" and "Masala" in the  formation of firm name continued all throughout and, thus, the

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respondents could be restrained from carrying on business of  manufacturing and selling of spices.   

(ii)    The respondents were permitted users in view of the registered  user agreement executed between the parties.   (iii)   The effect of the MOU could not be wholly determined as the  deeds of retirement had not been produced.

(iv)    Even if the MOU is kept out of consideration in view of the Rules  framed under Prevention of Food Adulteration Act and Standards  of Weights and Measures Act, the manufacturer is duty bound to  display its name and address in the manner, size and placement as  prescribed, on the packets.  Thus, once a statute prescribes an  obligation on manufacturer and stipulates the minimum standards  of measurement, the manufacturer is bound to act in accordance  with law and cannot be restrained from complying with specific  statutory provisions.

       It, while upholding the findings of the learned trial Judge contained  in paragraphs 41(i) and 41(ii); in respect of the directions contained in Para  41(iii), opined:      "42.3 However, finding in paragraph 41(iii) of the  impugned judgment requires to be modified.  The  trial court was in error for the aforestated reasons  when it held that printing and publication of the  principal display panel was creating infringement  of trade mark as it was deceptively similar.  The  defendants cannot be prevented from using the  words "Ramdev" and "Masala" on their label and  packing in light of the statutory requirements as  stated hereinbefore.  However, the defendants shall  print the name of the manufacturer using only the  minimum standard prescribed, depending upon the  nature of the packing and the placement of the  principal display panel shall be only at the bottom  on the reverse side of the packing and the front  portion of the packing shall not carry any principal  display panel except for its own brand name  "SWAD".

SUBMISSIONS:

       Mr. C.A. Sundaram and Mr. Ashok Desai, learned Senior Counsel  appearing on behalf of the appellant, in support of these appeals submitted :

(i)     The appellant was entitled to an order of injunction in view of the  well-settled principles of law that in case of a registered trade  mark, the use thereof by any other person would constitute an  infringement thereof.

(ii)    As there can be only one mark, one source and one proprietor and  in particular having regard to the public interest, it was  impermissible for the Trial Judge as also the High Court to allow  the respondents to use the registered trade mark of the appellant  either in the seven outlets or the goods manufactured by them  independently.   

(iii)   The trade mark ’Ramdev Masala’ used by the respondents being  deceptively similar with that of the registered trade mark, the  same would interfere with the quality control product of the  appellant and, thus, an order of injunction as was prayed for  should have been passed.

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(iv)    The learned Trial Judge as also the High Court misconstrued and  misinterpreted the provisions of the 1958 Act vis-‘-vis Prevention  of Food Adulteration Act and Standards of Weights and Measures  Act, as in a case of such nature, a mandatory injunction could be  issued directing change of the corporate name of the respondent  No.1; as the appellant’s right to protect its trade mark is absolute.

(v)     By reason of the MOU, the respondents were only allowed to  carry on the existing trade and thereby the respondents were not  permitted to start manufacturing spices under the name and style  of ’Ramdev Masala’ as would be evident from the fact that they  were only entitled to carry on retail business from the seven  outlets for the purpose of selling only the end products upon  printing the words "not for resale" which is a clear pointer to the  fact that merely a right to trade therefrom and not manufacture of  spices in the said name had been granted in terms thereof.

       Mr. F.S. Nariman, learned Senior Counsel appearing on behalf of the  respondents, on the other hand, submitted: (i)     The appellant could exercise their right only for the purpose of  implementing the MOU which must be read with the deed of  retirement dated 1st June, 1998, the remedies under the Trade  Marks Act are not available against the respondents who were  members of the family.

(ii)    The Company, although was not a party to the MOU, but having  been represented by the Directors therein must be held to be  bound thereby and the parties to the MOU having not filed any  special leave petition in their individual capacities, these appeals  are liable to be dismissed.

(iii)   As a distinction exists between a lis based on infringement of a  registered trade mark and passing off, the principles which are  applicable for grant of injunction in an action for passing off are  applicable in the instant case.   

(iv)    The claim of the appellant to obtain an order of injunction is  clearly barred by Sections 15(1) and 15(2) of the 1958 Act insofar  as a distinctive label having been registered as a whole, no order  can be passed restraining the defendants from using a part thereof,  as has been held in The Registrar of Trade Marks v. Ashok  Chandra Rakhit Ltd. [(1955) 2 SCR 252] and Re Cadbury  Brothers’ Application [1915 (2) Ch. 307].

(v)     The appellant itself having applied for ’Ramdev’ as a separate  trade mark as would appear from a public document, viz., the  Trade Mark Journal No. 6 dated 25.11.2003 and the said trade  mark having not yet been registered in its favour, no order of  injunction as had been prayed for can be passed in its favour.   

(vi)    In any event, if an order of injunction is passed, against the  respondents, they would have to be completely dependent upon  the appellant for carrying on business which would lead to  discord between the members of the family, which was sought to  be avoided by the MOU.

(vii)   In view of the stipulations made in the MOU whereby and  whereunder Shri Arvindbhai became the absolute owner of both  ’Ramdev Exports’ and ’Ramdev Masala’ and Hasmukhbhai and  Pravinbhai haing given up their right thereupon, the First  respondent is entitled to carry on the said business in those names  which were not required to be changed by reason of the said  MOU. (viii)  Furthermore, the stipulations made in the MOU clearly do not

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oblige the respondent to buy any product from the appellant-  Company, and in the event, if it be held that the respondent is  bound to sell only the products of the appellant, running of  business by the respondent would clearly depend upon the supply  of the materials by the appellant alone.

(ix)    As by reason of the said MOU, the respondent No.1 became  entitled to use of mark from seven outlets, the same envisages its  right to sell goods having the said mark and not sell of the  plaintiffs’ goods alone.  The MOU must be interpreted in the light  of the deed of retirement dated 1.6.1998, which categorically  contained a stipulation that the continuing partner "have also  decided to continue the said business in the same firm names,  viz., ’Ramdev Exports’ and ’M/s. Ramdev Masala’" and, thus, the  appellant cannot now turn round and contend that the respondent  cannot carry on business of grinding and selling masala.

(x)     In the event the appellant’s contention is accepted, the right of the  respondent to continue the business under the name and style of  or in the firm name of ’M/s. Ramdev Masala’ and ’Ramdev  Exports’ would become inconsistent with the deed of retirement  of Hasmukhbhai and Pravinbhai from ’M/s. Ramdev Masala’ and  ’Ramdev Exports’.

       Dr. A.M. Singhvi, learned senior counsel appearing on behalf of  some of the respondents supplemented Mr. Nariman urging that a  document upon reading contextually may be found to be a family  settlement although the said expression was not used therein.  It was,  therefore, urged that the courts would lean strongly in favour of the family  settlement and the MOU, so read, would operate as estoppel against the  other family members who have taken advantage thereof from denying or  disputing implementation thereof.

STATUTORY PROVISIONS

       It is not in dispute that the lis between the parties would be governed  by the 1958 Act.   

       "Deceptively similar" has been defined in Section 2(d) of the 1958  Act to mean as under:

"A mark shall be deemed to be deceptively similar to  another mark if it so nearly resembles that other mark as  to be likely to deceive or cause confusion."

       Section 2(j) defines "Mark" to include "a device, brand, heading,  label, ticket, name, signature, word, letter or numeral or any combination  thereof".  The expression "registered proprietor" has been defined in  Section 2(q) to mean a person for the time being entered in the register as  proprietor of the trade mark in relation to a trade mark.                  Chapter II provides for appointment of the Controller-General of  Patents, Designs and Trade Marks for the purpose of the said Act.  Sections  15 and 17 read as under: "15. Registration of parts of trade marks and of  trade marks as a series.--(1) Where the  proprietor of a trade mark claims to be entitled to  the exclusive use of any part thereof separately, he  may apply to register the whole and the part as  separate trade marks.  (2) Each such separate trade mark shall satisfy all  the conditions applying to and have all the  incidents of, an independent trade mark.  (3) Where a person claiming to be the proprietor of

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several trade marks in respect of the same goods or  description of goods which, while resembling each  other in the material particulars thereof, yet differ  in respect of--  (a) statement of the goods or services in relation to  which they are respectively used or proposed to be  used; or (b) statement of number, price, quality or names of  places; or (c) other matter of a non-distinctive character  which does not substantially affect the identity of  the trade mark; or  (d) colour; seeks to register those trade marks, they may be  registered as a series in one registration. 17. Registration of trade marks subject to  disclaimer.\027If a trade mark  -  (a) contains any part--  (i) which is not the subject of a separate application  by the proprietor for registration as a trade mark; or  (ii) which is not separately registered by the  proprietor as a trade mark; or  (b) contains any matter which is common to the  trade or is otherwise of a non-distinctive character, The tribunal in deciding whether the trade mark  shall be entered or shall remain on the register, may  require, as a condition of its being on the register,  that the proprietor shall either disclaim any right to  the exclusive use of such part or of all or any  portion of such matter, as the case may be, to the  exclusive use of which the tribunal holds him not to  be entitled, or make such other disclaimer as the  tribunal may consider necessary for the purpose of  defining the rights of the proprietor under the  registration: Provided that no disclaimer shall affect any rights  of the proprietor of a trade mark except such as  arise out of the registration of the trade mark in  respect of which the disclaimer is made."

       Chapter III provides for the procedure for and duration of  registration.  The 1958 Act envisages filing of an application (Section 18),  advertisement thereof (Section 20), opposition thereto (Section 21) and  correction and amendment thereof (Section 22).  Registration of a trade  mark is envisaged in Section 23 of the 1958 Act, the effect whereof is  stated in Section 27 thereof.

       The rights which are conferred by registration are stated in Section  28 of the 1958 Act in the following terms: "28. Rights conferred by registration.--(1)  Subject to the other provisions of this Act, the  registration of a trade mark in Part A or Part B of  the register shall, if valid, give to the registered  proprietor of the trade mark the exclusive right to  the use of the trade mark in relation to the goods or  services in respect of which the trade mark is  registered and to obtain relief in respect of  infringement of the trade mark in the manner  provided by this Act. (2) The exclusive right to the use of a trade mark  given under sub-section (1) shall be subject to any  conditions and limitations to which the registration  is subject. (3) Where two or more persons are registered  proprietors of trade marks, which are identical with

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or nearly resemble each other, the exclusive right  to the use of any of those trade marks shall not  (except so far as their respective rights are subject  to any conditions or limitations entered on the  register) be deemed to have been acquired by any  one of those persons as against any other of those  persons merely by registration of the trade marks  but each of those persons has otherwise the same  rights as against other persons (not being  registered users using by way of permitted use) as  he would have if he were the sole registered  proprietor."

       Section 29 provides for the consequences of infringement of trade  marks in the following terms:                  "29. Infringement of registered trade marks.-- (1) A registered trade mark is infringed by a  person who, not being a registered proprietor of  the trade mark or a registered use thereof using by  way of permitted use, uses in the course of trade  mark which is identical with, or deceptively  similar to, the trade mark in relation to any goods  in respect of which the trade mark is registered and  in such manner as to render the use of the mark  likely to be taken as being used as a trade mark.

(2) In an action for infringement of a trade mark  registered in Part B of the register an injunction or  other relief shall not be granted to the plaintiff if  the defendant establishes to the satisfaction of the  court that the use of the mark of which the plaintiff  complains is not likely to deceive or cause  confusion or to be taken as indicating a connection  in the course of trade between the goods in respect  of which the trade mark is registered and some  person having the right, either as registered  proprietor or as registered user, to use the trade  mark."

       Section 33 provides for saving of vested rights.

INTERPRETATION OF DEED \026 PRINCIPLES OF

       MOU, for the purpose of these appeals, may be treated to be a family  settlement.  It is, however, well-known that intention of the parties to an  instrument must be gathered from the terms thereof examined in the light of  the surrounding circumstances.  [See Sohan Lal Naraindas v. Laxmidas  Raghunath Gadit, (1971) 1 SCC 276]

       In Delta International Ltd. v. Shyam Sundar Ganeriwalla [(1999) 4  SCC 545], this Court noticed:

"17. For construction of contracts between the  parties and for the interpretation of such document,  learned Senior Counsel, Mr Desai has rightly  relied upon some paragraphs from The  Interpretation of Contracts by Kim Lewison, Q.C.  as under: "1.03 For the purpose of the construction of  contracts, the intention of the parties is the  meaning of the words they have used. There is no  intention independent of that meaning. 6.09 Where the words of a contract are capable of

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two meanings, one of which is lawful and the other  unlawful, the former construction should be  preferred. Sir Edward Coke [Co. Litt. 42a] expressed the  proposition thus: ’It is a general rule, that whensoever the words of a  deed, or of one of the parties without deed, may  have a double intendment and the one standeth  with law and right, and the other is wrongful and  against law, the intendment that standeth with law  shall be taken.’"

       It is further stated:

"For that purpose, he referred to the following  observations of Buckley, J. from the paragraphs  which are sought to be relied upon from The  Interpretation of Contracts by Kim Lewison, Q.C.: "My first duty is to construe the contract, and for  the purpose of arriving at the true construction of  the contract, I must disregard what would be the  legal consequences of construing it one way or the  other way.""

       Moreover, the document is to be read as a whole.  It is equally well  settled that the deed has to be construed keeping in view the existing law.

       It is now a well-settled principle of law that a document must be  construed having regard to the terms and conditions as well as the nature  thereof. [Union of India v. M/s. Millenium Mumbai Broadcast Pvt. Ltd.  2006 (5) SCALE 44]

MOU      

       We may proceed on the basis that the MOU answers the principles of  family settlement having regard to the fact that the same was actuated by a  desire to resolve the disputes and the courts would not easily disturb them  as has been held in S. Shanmugam Pillai and Others v. K. Shanmugam  Pillai and Others [(1973) 2 SCC 312], Kale and Others v. Deputy Director  of Consolidation and Others [(1976) 3 SCC 119] and Hari Shankar  Singhania & Ors. v. Gaur Hari Singhania & Ors. [JT 2006 (4) SC 251].

       Although at one point of time the appellant-Company had taken a  stand that it being not a party to the MOU, it is not bound by the terms  thereof but the same would not mean that in an action for infringement of  trade mark, when the MOU was put as a shield to its claim, it could not  have taken recourse to proper interpretation thereof for the purpose of  determination of the rights of the parties to use the trade mark in question.   It is not a case where the courts refused to lean in favour of family  arrangement or base its decision on technical or trivial ground.  We have  been taken through the MOU again and again.  It fell for judicial  interpretation.  Interpretation processes were undertaken by the Courts  below.  The same would also be reviewed by us hereafter.

MOU \026 ANALYSIS OF

       The appellant before us is a Company registered and incorporated  under the Companies Act.  Indisputably, the parties to the MOU being  Arvindbhai, Hasmukhbhai and Pravinbhai were its Directors.  They are all  brothers.  All the shares of the Company were held by them and their  family members.  The Company although is a juristic person was not made

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a party thereto.  The effect of the Company being not a party may have to  be considered by the Trial Court in the suit; but, as the parties for the  purpose of disposal of this appeal proceeded on the basis that the MOU was  entered into by and between the parties thereto; an endeavour shall be made  to construe the same as it stands.  We would, however, like to observe that  in the event any other attending circumstances are brought on record by  way of adduction of oral evidences, if permissible in law, warranting a  different interpretation of the said MOU, the learned Trial Judge would be  at liberty to do so.  We may furthermore place on record that we are  construing the said MOU only for the purpose of disposal of an  interlocutory matter which would not, thus, be binding on the courts below  at the final hearing of the suit.

       The broad propositions which are evident from a perusal of the said  MOU appear to be as under:

       Among all the three brothers, Arvindbhai who was the eldest among  them is on one side and Hasmukhbhai and Pravinbhai are on the other.  The  division of the assets is broadly arrived at in that proportion.  The Counsel  appearing before us proceeded on the basis that MOU for all intent and  purport was a family settlement.  Disputes and differences having arisen  between the parties, the said MOU was entered into with a view to resolve  the same as regards the business and property held by them so as to enable  them to be in peace, harmony and understanding in the family.  The said  settlement was arrived at through the mechanism of mediation of the well- wishers of the family.  MOU was, thus, entered into for the purpose of  distribution of the properties and business and the same was given effect to  on and from 1.4.1998.  It stipulates:

(i)     Manufacturing and selling of masala (spices) and instant mix was  being done by the Company.

(ii)    The goods used to be manufactured in a factory situated in village  Sola.  Another factory was constructed on block No. 527, 542 and  528 at Changodar.  The Joint family, viz., the Partnership  (Ramdev Masala) had been selling goods in retail in the name of  ’Ramdev Masala’ to seven outlets named therein.   

(iii)   The export business in respect of goods, viz., pepper-spices,  instant mix, groceries and other articles was being done in the  name of Ramdev Exports.

       The Trade Mark or trade name which was registered in the name of  the company, viz., Ramdev and its logo of a saint astride on a horse with a  standard went to the Company.  The expression "Ramdev" is written in the  Gujarati language just above the said logo and the word "masala" which is  again in the Gujarati language appears just below the same.      

       Arvindbhai became the exclusive owner of the business Ramdev  Exports (Partnership Firm) and Ramdev Masala (another Partnership Firm).   MOU contained a clarification to the effect that the other two brothers, viz.,  Hasmukhbhai and Pravinbhai became the owners thereof and would carry  on the management of the business of the Company.  The two brothers,  Hasmukhbhai and Pravinbhai were given the right to carry on export  business under the brand name of ’Ramdev’ but in a manner which would  not cause any loss to Arvindbhai or vice-versa.  Whereas the land situated  at Sola went to Arvindbhai along with the building, the machineries  belonging to the company remained with the Company.  The new factory  and machinery also went to the Company.  A right of pre-emption in  respect of the trade mark Ramdev was also created in terms whereof  Hasmukhbhai and Pravinbhai was to offer sale of the said trade mark to  Arvindbhai in the event they intend to do so.  It was, thus, made clear that  the manufacturing activities were to be restricted to the Company through  Hasmukhbhai and Pravinbhai.

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       The two brothers, viz., Hasmukhbhai and Pravinbhai, also had the  right to carry out export business under the brand name of Ramdev but in a  manner which would not cause any loss to the eldest brother or vice-versa.

       We have noticed hereinbefore that the partnership Ramdev Masala  had an user agreement for seven years from 1.4.1991 which lapsed on  31.3.1998.  MOU came into force with effect from 1.4.1998.  By reason of  the said MOU prima facie Arvindbhai had not been given any  manufacturing right through the user agreement.  The trade mark Ramdev,  thus, belonged exclusively to the Company.

       Although several trade marks were registered and belonged to the  Company, we are primarily concerned with the trade mark bearing No.  447700 having the aforementioned description.   

       Both the learned Trial Judge as also the High Court proceeded on the  basis that in terms of the said MOU, the Company acquired an exclusive  right to use the same.

       It is not in dispute that the respondents have been manufacturing  spices under and name and style of ’Swad’.  The said mark is a registered  one.             The Courts below proceeded on the basis that the mark used by the  respondents are deceptively similar to the trade mark registered in favour of  the appellant.  There is no dispute in regard to the said findings.  We would  hereinafter consider the effect thereof.

TRADE MARK-CONCEPT

       The concept of trade mark dates back to ancient times.  Even in the  Harappan Civilization marks of trade with foreign countries such as  Mesopotamia and Babylonia were found embossed on articles.  The law of  trade marks was formalised with the process of registration which gave  exclusivity to a trader right to deal in goods using a symbol or mark of  some sort to distinguish his goods from similar goods sold by other traders.   Even today the grant of a trade mark is an indicator of exclusivity in trade  under that mark and this right cannot be transferred.  Only a limited right of  user can be granted via licence.

In The Modern Law of Trade Marks by Christopher Morcom,  Butterworths 1999, it is stated:

"\005The concept of distinguishing goods or services  of the proprietor from those of others was to be  found in the requirements for a mark to be  registrable.  Essentially, whatever the wording  used, a trade mark or a service mark was an  indication which enabled the goods or services  from a particular source to be indentified and thus  distinguished from goods or services from other  sources.  In adopting a definition of ’trade mark’  which simply describes the function in terms of  capability of ’distinguishing the goods or services  of one undertaking from those of other  undertakings’ the new law is really saying  precisely the same thing."

       In Gujarat Bottling Co. Ltd. and Others v. Coca Cola Co. and Others  [(1995) 5 SCC 545], it was held that licensing of trade mark is governed by  common law which is also statutorily permissible provided:

"\005 (i) the licensing does not result in causing  confusion or deception among the public; (ii) it

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does not destroy the distinctiveness of the trade  mark, that is to say, the trade mark, before the  public eye, continues to distinguish the goods  connected with the proprietor of the mark from  those connected with others; and (iii) a connection  in the course of trade consistent with the definition  of trade mark continues to exist between the goods  and the proprietor of the mark\005"

       Making use of another’s trade mark is not only a violation of  business ethics but has also been linked to dishonestly making use of the  goodwill and reputation built up and associated with the mark.

       In Laxmikant V. Patel v. Chetanbhai Shah and Another [(2002) 3  SCC 65], it was stated:          "10. 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  acquire 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."

PURPOSE OF TRADE MARK

       A trade mark is the property of the manufacturer.  The purpose of a  trade mark is to establish a connection between the goods and the source  thereof which would suggest the quality of goods. If the trade mark is  registered, indisputably the user thereof by a person who is not otherwise  authorised to do so would constitute infringement.  Section 21 of the 1958  Act provides that where an application for registration is filed, the same can  be opposed.  Ordinarily under the law and, as noticed hereinbefore, there  can only be one mark, one source or one proprietor.  Ordinarily again right  to user of a trade mark cannot have two origins.  The first respondent herein  is a rival trader of the appellant-Company.  It did not in law have any right  to use the said trade mark, save and except by reason of the terms contained  in the MOU or continuous user.  It is well-settled that when defences in  regard to right of user are set up, the onus would be on the person who has  taken the said plea.  It is equally well-settled that a person cannot use a  mark which would be deceptively similar to that of the registered trade  mark.  Registration of trade marks is envisaged to remove any confusion in  the minds of the consumers.  If, thus, goods are sold which are produced  from two sources, the same may lead to confusion in the mind of the  consumers.  In a given situation, it may also amount to fraud on the public.   A proprietor of a registered trade mark indisputably has a statutory right  thereto.  In the event of such use by any person other than the person in

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whose name the trade mark is registered, he will have a statutory remedy in  terms of Section 21 of the 1958 Act.  Ordinarily, therefore, two people are  not entitled to the same trade mark, unless there exists an express licence in  that behalf.

DIFFERENT FUNCTIONS OF A TRADE MARK          We may now note a few precedents on the function of a trade mark.

In Sumat Prasad Jain v. Sheojanam Prasad (Dead) and Others and  State of Bihar [(1973) 1 SCC 56], this Court held:

"\005Thus, the distinction between a trade mark and  a property mark is that whereas the former denotes  the manufacture or quality of the goods to which it  is attached, the latter denotes the ownership in  them. In other words, a trade mark concerns the  goods themselves, while a property mark concerns  the proprietor. A property mark attached to the  movable property of a person remains even if part  of such property goes out of his hands and ceases  to be his."

In Canon Kabushiki Kaisha v. Metro-Goldwyn-Mayer Inc. [(1999)  RPC 117], the European Court of Justice emphasised the test of likelihood  of confusion in the following terms:

"40. That view is also confirmed by the judgment  of the court in SABEL, in which it held that the  "likelihood of confusion must\005be appreciated  globally, taking into account all factors relevant to  the circumstances of the case" (at paragraph 22).   It is true that that statement was made in a different  context: the court was there considering the  question whether conceptual similarity of the  marks alone could give rise to confusion within the  meaning of Article 4(1)(b), in a situation in which  the goods in question were clearly the same.   However, the statement is one of general  application."

       In Baker Hughes Limited v. Hiroo Khushalani [1998 PTC (18) 580],   the question as regards likelihood of confusion even by the enlightened  public was noticed in the following words :

"Again in Grotrian, Helfferich, Schulz, Th.  Steinweg Nachf, a Corporation Vs. Steinway &  Sons, a corporation, 365 F.Supp. 707 (1973),  striking a similar note the Court held as under:

"Plaintiff argues that purchaser will not be  confused because of the degree of their  sophistication and the price (B & L Sales  Associates Vs. H. Daroff & Sons, Inc.,  supra, 421 F.2d at 354). It is true that  deliberate buyers of expensive pianos are  not as vulnerable to confusion as to products  as hasty buyers of inexpensive merchandise  at a newsstand or drug store [Callmann,  Unfair Competition Trademarks and  Monopolies, (3d ed. 1971)]. The  sophistication of buyers, however, does not  always assure the absence of confusion

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[Communications Satellite Corp. Vs.  Comcet, Inc., 429 F.2d at 1252]. It is the  subliminal confusion apparent in the record  as to the relationship, past and present,  between the corporate entities and the  products that can transcend the competence  of even the most sophisticated consumer.  Misled into an initial interest, a potential  Steinway buyer may satisfy himself that the  less expensive Grotrian-Steinweg is at least  as good, if not better, than a Steinway.  Deception and confusion thus work to  appropriate defendant’s good will. This  confusion, or mistaken beliefs as to the  companies’ interrelationships, can destroy  the value of the trademark which is intended  to point to only one company [American  Drill Busing Co. v. Rockwell Mfg. Co., 342  F.2d 1922, 52 CCPA 1173 (1965)]. Thus,  the mere fact that purchasers may be  sophisticated or discriminating is not  sufficient to preclude the likelihood of  confusion. "Being skilled in their own art  does not necessarily preclude their  mistaking one trademark for another when  the marks are as similar as those here in  issue, and cover merchandise in the same  general field" [Id].  

Having regard to the above discussion prima facie  I am of the opinion that the word Baker occurring  in the corporate name of the second defendant  suggests its connection or nexus with ’Baker’,  which depicts a wrong picture as from February,  1995 ’Baker’ has terminated its relation with the  defendants. The continuance of the word Baker as  part of the corporate name of the second defendant  is likely to cause deception and confusion in the  mind of the customers. There would be no  justification for the second defendant to use the  word Baker as part of its corporate name after the  ties between the first plaintiff and the second  defendant have ceased to exist."

       The said decision has been noticed by this Court in Baker Hughes  Ltd. and Another v. Hiroo Khushlani and Another [(2004) 12 SCC 628].

       In Milmet Oftho Industries and Others v. Allergan Inc. [(2004) 12  SCC 624], in regard to medicinal products, this Court opined:

"\005Whilst considering the possibility of likelihood  of deception or confusion, in present times and  particularly in the field of medicine, the courts  must also keep in mind the fact that nowadays the  field of medicine is of an international character.  The court has to keep in mind the possibility that  with the passage of time, some conflict may occur  between the use of the mark by the applicant in  India and the user by the overseas company. The  court must ensure that public interest is in no way  imperilled\005"  

       We may in this connection notice a recent judgment of the European  Court of Justice in Canon Kabushiki Kaisha (supra) wherein it was opined:

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"28. That case concerned the interpretation of  Article 4(1)(b) of the Directive in so far as it refers  to "a likelihood of confusion on the part of the  public, which includes the likelihood of  association with the earlier trade mark".  The court  explained that it had been submitted that "the  likelihood of association may arise in three sets of  circumstances: (1) where the public confuses the  sign and the mark in question (likelihood of direct  confusion); (2) where the public makes a  connection between the proprietors of the sign and  those of the mark and confuses them (likelihood of  indirect confusion or association); (3) where the  public considers the sign to be similar to the mark  and perception of the sign calls to mind the  memory of the mark, although the two are not  confused (likelihood of association in the strict  sense). (Paragraph 16 of the judgment).

29. The court stated that it was therefore necessary  to determine "whether Article 4(1)(b) can apply  where there is no likelihood of direct or indirect  confusion, but only a likelihood of association in  the strict sense" (paragraph 17 of the judgment).  It  concluded: "The terms of the provision itself  exclude its application where there is no likelihood  of confusion on the part of the public".  (paragraph  18 of the judgment).  Thus, the court held that "the  mere association which the public might make  between two trade marks as a result of their  analogous semantic content is not in itself a  sufficient ground for concluding that there is a  likelihood of confusion" within the meaning of  Article 4(1)(b)."

TRADE MARK AND GOODWILL

       Traditionally, a trade mark has always been considered a vital and  inseparable part of the goodwill of the business.  In fact, the sale of a trade  mark without the sale of the goodwill to the same buyer is considered null  and void.  However, the trade mark can be assigned with or without the  goodwill of business though subject to certain conditions.  [See V.A.  Mohta’s Trade Marks, Passing Off and Franchising, pages 12, 313.]

ENTITLEMENT TO USE

       The contention of the appellant before the Courts below was that its  right to the said trade mark has been entrenched by the respondents on  account of use of the same as part of the trade name in view of the fact that  although it has started the business in the trade name ’Swad’, the first  respondent, on the label and the packing material of the said product, had  printed the name of the manufacturer ’Ramdev Masala’ in such a prominent  manner that the same would create an impression in the mind of the  ordinary unwary customer that the same is a product of the appellant  Company.  It also alleged that the respondents had adopted advertisements,  marketed and displayed boards in such a manner so as to deliberately  deceive the customer.   

       The concurrent finding of fact arrived at by both the courts was that  the packing material and wrapper of both the parties was phonetically and  visibly similar to the registered mark.  The packing material and label used  by the respondents were deceptively similar to that of the appellant and the  same creates deception as well as confusion in the minds of customers who  are literate, illiterate, male or female, who used to purchase in retail market  from small shops as well as big departmental stores.

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The learned Trial Court as also the High Court proceeded on the  basis that the respondents are entitled to use the said trade mark by reason  of the stipulations contained in the said MOU as a result whereof they  became entitled to use the trade mark Ramdev for their retail business of  spices in seven outlets, which used to be belonging to the company.  The  said outlets were meant to be used for retail sale of the products of the  appellant alone.

       The learned Trial Judge as also the High Court, however, failed to  notice two significant and important provisions in the said MOU, viz., (i)  the defendants could not carry on business in wholesale of the said  products; (ii) it was meant to be sold directly to the consumers and on the  productions "not for resale" was required to be printed on each packet.   What, therefore, could be done by the respondents was to sell the products  of the appellant through the said outlets.  It was one of the primary business  of the partnership firm which was given to the first respondent.  Prima  facie, therefore, the first respondent could sell only the product of the  appellant. The respondents, however, were not restrained from  manufacturing spices in their own factory.  They were entitled to do so.   They started the same under the brand name of ’Swad’.  They could even  use the same retail outlets for the purpose of promoting their own products  but prima facie they could not use the mark registered in the name of the  appellant Company.  The registration number of trade mark is 447700.   Once the appellant had acquired goodwill and reputation thereto, in the  event of any infringement to the said right, the remedies provided for in the  1958 Act would be available to it.  The terms of the MOU, in our opinion,  are clear and unambiguous.  It was required to be construed, even if it was  obscure to some extent by making attempt to uphold the one which would  be in consonance with law and not offend the same.  Quality control by a  registered trade holder vis-‘-vis the one produced by an unregistered one is  one of the factors which is required to be taken into consideration for the  purpose of passing an order of injunction.  It is one thing to say that the  respondents were permitted to carry on trade but it would be another thing  say that they would be entitled to manufacture and market its products  under a name which would be deceptively similar to that of the registered  trade mark of the appellant.  So long the parties to an arrangement can  continue to carry out their respective businesses without infringing the right  of another, indisputably the terms thereof must be given effect to.  But the  matter would be entirely different when a party who has not been expressly  authorised to manufacture the goods in which the Company had been  carrying on business under the same name, the respondents under law could  not have been permitted to carry on the manufacturing and marketing of  their products under the same name.  In a case of this nature, even a  mandatory injunction can be granted.  The respondents in the instant case  have adopted a part of the appellant’s registered trade mark as a part of its  corporate name.  They had merely been permitted to trade from seven  outlets.  In that view of the matter, they had a limited right under the MOU  and by reason thereof they could not have been permitted to start  manufacturing of spices under the name and style of ’Ramdev Masala’.   Even under the common law, licence has to be interpreted to subsume the  law and prevent the mischief which is deceptive having regard to the fact  that trafficking in trade mark is not permitted.   

       It is true that the respondents have been permitted in terms of the  MOU to continue their business in the name of the partnership firm and to  use the label mark, logo, etc. but the said MOU must be construed in the  light of the law operating in the field.  For the said purpose, prima facie, the  deeds of retirement are not required to be looked into.  When a right to use  a trade mark is given, such a right can be exercised only in the manner laid  down therein.  If in absence of any express licence or agreement to use its  label the respondents use the self-same trade mark, the same would not  only lead to confusion but may also cause deception.  Even a common law  licence, it is well-settled, cannot result in the dilution of the trade mark.

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       In that view of the matter, we are not in a position to subscribe to the  views of the learned Trial Judge and the High Court that although the first  respondent would be at liberty to carry on the business of manufacture of  spices, it can use the mark ’Ramdev’ only in seven outlets.  It evidently in  view of the legal position, could do so in respect of the products of the  appellant alone, which would be evident from the fact that at the relevant  point of time, the respondents were not carrying any such business.  The  direction of the learned Trial Judge that the respondents should be  prevented from using the word "Ramdev Masala" and their label and  packing, however, has been over-turned by the High Court on the premise  that they are required to observe the statutory requirements under the  Prevention of Food Adulteration Act, 1955 as also the Standards of  Weights and Measures Act, 1976.

NON-OBSTANTE PROVISIONS  

       The non-obstante nature of a provision although may be of wide  amplitude, the interpretative process thereof must be kept confined to the  legislative policy.  A non-obstante clause must be given effect to, to the  extent the Parliament intended and not beyond the same. [See ICICI Bank  Ltd. v. Sidco Leathers Ltd. & Ors., 2006 (5) SCALE 27]

       The question which also escaped the attention of the High Court was  that having regard to the non-obstante clause contained in the 1958 Act  ordinarily for any purpose, the trade mark cannot be infringed.  If an  infringement of trade mark is established, the onus would be on the  defendants to show that he is entitled thereto either by reason of  acquiescence on the part of the owner of the registered trade mark or he  himself has acquired a right thereto.  The Provisions of the Standards of  Weights and Measures Act or the Prevention of Food Adulteration Act do  not confer such right.  Yet again, significantly, a pre-emptive right had been  conferred in favour of the first respondent which is itself suggestive of the  fact that the first respondent admitted and acknowledged the right of the  appellant to the said trade mark.   

       In the MOU, furthermore it was categorically stated that the use of  the trade mark was only to the extent of retail sale as on the packages, the  words "not for resale" were to be printed.  If the parties intended to allow  the first respondent herein to manufacture his own products and to market  the same by using the name of Ramdev Masala, the question of grant of a  right to sell only in retail and that also printing the words ’not for resale’  would not have arisen.  A manufacturer is not only entitled to sell his own  products in retail but also in wholesale.  It can use any outlet for the said  purpose whether belonging to it or any other.  It would lead to an anomaly  if it be held that the first respondent would be permitted not only to sell the  products of the appellant but also its own products under the same trade  name albeit only from the seven outlets.

       By reason of the said MOU, the respondents are not bound to buy  any product from the appellant but there is an obligation on the part of the  appellant to supply the same as otherwise it would lead to closure of  business of Arvindbhai which would have been the intention of the parties.   When the parties had settled their disputes, it was expected that the outlets  would be utilised for the purposes for which they were meant to be utilised.   What were the mutual obligations of the parties is a matter which can be  considered only at the trial or in any other appropriate proceeding, but  prima facie it goes without saying that the first respondent, in any event,  was entitled to sell also his own products from the said outlets.  The parties  for the said purpose thought of remaining mutually dependent as it was  stipulated that while also competing with each other they would see to it  that by action of one, the other is not harmed at least while exporting the  materials.  It is, thus, not a case where the appellant having taken advantage  of the terms of the MOU had resiled therefrom and in that view of the  matter the principle of estoppel cannot be said to have any application in  the instant case.  

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       We are also not in a position to accept the submission of Mr.  Nariman that the MOU must be read with the deed of partnership or the  deeds of retirement whereby and whereunder the firm ’Ramdev Masala’  and ’Ramdev Exports’ were permitted to use the word ’Ramdev’.   

What is registered is a logo wherein the words ’Ramdev’ and  ’Masala’ are prominent.  A person may be held to be permitted to carry on  business in spices as contradistinguished from the permission to carry on  manufacturing goods which are similar to that of the appellant, but in terms  of the statutory provisions, the respondents were not legally permitted to  sell its products in packages or labels which would be deceptively similar  to that of the registered owner of a trade mark.  The right to manufacture  masala and to sell the same with the registered logo, it will bear repetition  to state, was assigned as far back in 1991.  If the contention of the Senior  Counsel is accepted, the said purpose would be lost.  In a case of this  nature, therefore, ordinarily an injunction would issue.

By reason of interpretation of MOU, trade mark cannot be infringed  and further when the right of user has been relinquished, the same could not  have been claimed by the respondents.

WAIVER

       The matter may be considered from another angle.  If the first  respondent has expressly waived his right on the trade mark registered in  the name of the appellant-Company, could he claim the said right  indirectly?  The answer to the said question must be rendered in the  negative.  It is well-settled that what cannot be done directly cannot be  done indirectly.   The term ’Waiver’ has been described in the following words: "Waiver is the abandonment of a right in such a way that  the other party is entitled to plead the abandonment by  way of confession and avoidance if the right is thereafter  asserted, and is either express or implied from  conduct\005A person who is entitled to rely on a  stipulation, existing for his benefit alone, in a contract or  of a statutory provision may waive it, and allow the  contract or transaction to proceed as though the  stipulation or provision did not exist. Waiver of this kind  depends upon consent, and the fact that the other party  has acted upon it is sufficient consideration\005 It seems that, in general, where one party has, by his  words or conduct, made to the other a promise or  assurance which was intended to affect the legal relations  between them and to be acted on accordingly, then, once  the other party has taken him at his word and acted on it,  so as to alter his position, the party who gave the promise  or assurance cannot afterwards be allowed to revert to the  previous legal relationship as if no such promise or  assurance had been made by him, but he must accept  their legal relations subject to the qualification which he  has himself so introduced, even though it is not supported  in point of law by any consideration.  [See 16 Halsbury’s Laws (4th edn) para 1471]   

       Waiver may sometimes resemble a form of election, and sometimes  be based on ordinary principles of estoppel. [See 45 Halsbury’s Laws (4th  edn.) para 1269]

       In Indu Shekhar Singh & Ors. v. State of U.P. & Ors. [2006 (5)  SCALE 107], this Court held:

"They, therefore, exercised their right of option.   Once they obtained entry on the basis of election,

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they cannot be allowed to turn round and contend  that the conditions are illegal\005"

SECTIONS 15 AND 17 ISSUE

       Section 15 of the 1958 Act postulates registration of the whole and a  part thereof as separate trade marks.  The nature of the trade mark of the  appellant has been noticed hereinbefore.   

       There are three elements in the said trade mark, viz., ’Ramdev’,  ’Masala’ and the ’horse’.  The deception could be as regard the prominent  features of the said trade mark.

       Section 15 of the 1958 Act, in our considered opinion, is not  attracted in the instant case.  By reason of the said provision, registration of  trade mark in regard to the exclusive use is permissible both in respect of  the whole trade mark as also the part thereof separately.  Where such  separate trade mark in regard to a part of it is applied for, the applicant  must satisfy the conditions applying to and have all the incidents of an  independent trade mark.  Sub-section (3) of Section 15 of the 1958 Act  provides for a case where the proprietor of several trade marks claimed  registration in respect of the same goods or description of the goods which  while resembling each other in the material particulars thereof yet differ in  respect of the matters provided for therein.  We are not, in this case,  concerned with such a legal question.           In Ashok Chandra Rakhit Ltd. (supra), whereupon reliance has been  placed by Mr. Nariman, this Court was concerned with a proprietary mark  of ’Shree’.  It was claimed that the mark ’Shree’ was a trade mark apart  from the device as a whole and it was an important feature of its device.   The respondents were carrying on business in the name and style of Shree  Durga Charan Rakshit.  It was in the peculiar factual background obtaining  therein, this Court, referred to the decision of Lord Esher in Pinto v.  Badman [8 RPC 181] to say that where a distinctive label is registered as a  whole such registration cannot possibly give any exclusive statutory right  to the proprietor of the trade mark to the use of any particular word or name  contained therein apart from the mark as a whole.  This Court in the  aforementioned factual backdrop opined: "\005This, as we have already stated, is not quite  correct, for apart from the practice the Registrar  did advert to the other important consideration,  namely, that on the evidence before him and the  statement of counsel it was quite clear that the  reason for resisting the disclaimer in this particular  case was that the Company thought, erroneously  no doubt but quite seriously, that the registration of  the trade mark as a whole would, in the  circumstances of this case, give it a right to the  exclusive use of the word "Shree" as if separately  and by itself it was also its registered trade mark  and that it would be easier for it to be successful in  an infringement action than in a passing off action.  It was precisely the possibility of such an  extravagant and untenable claim that called for a  disclaimer for the purpose of defining the rights of  the respondent company under the registration\005"                                       (Emphasis supplied)

                The said decision has no application to the fact of this case.

       Mr. Nariman is also not correct in contending that only a label has  been registered and not the name ’Ramdev’.  Definition of ’mark’ as  contained in Section 2(j) of the 1958 Act also includes name, signature, etc.

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SECTION 29 ISSUE

       Section 28 of the 1958 Act confers the right of registration whereas  Section 29 thereof provides for the remedies for infringement of trade  mark.  What is needed by way of cause of action for filing a suit of  infringement of trade mark is use of a deceptively similar mark which may  not be identical.  What would be deceptively similar, as defined in Section  2(d) of the 1958 Act, would be a mark if it nearly resembles that other mark  as to be likely to deceive or cause confusion.  It is, therefore, not a case  where the respondents could raise valid defence in terms of Section 29 of  the 1958 Act.

       The right conferred in terms of Section 28 of the 1958 Act although  is required to be read with Sections 15 and 17 thereof but it is difficult to  accept that each part of the logo was required to be separately registered.   Section 28 of the 1958 Act confers an exclusive right of using trade mark to  a person who has got the trade mark registered in his name.  Such right is,  thus, absolute.  Sub-section (3) of Section 28 raises a legal fiction for the  purposes specified therein but we are not concerned therewith in the instant  case.  Sub-section (2) of Section 29 inter alia provides for the defences.   

We may not in this case go into the question as to whether it was  essential having regard to the provisions contained in the MOU that the  user agreement should have been registered in terms of Section 49 of the  1958 Act as was opined by the High Court.  But, we have no doubt in our  mind that the user agreement having come to an end on 31st March, 1998,  i.e., on the expiry of seven years from the date of execution, the  respondents could no more claim any right thereunder.  The user agreement  was valid from 01.04.1991 to 31.03.1998.  The MOU came into force from  1.4.1998.  The right to user has not been conveyed by reason of the said  MOU.  The cut off date for determining the respective rights of the parties  would, thus, be 1.4.1998.  Submission of the learned counsel that the MOU  for the purpose of Section 28 of the 1958 Act should be read with the  partnership deed is not acceptable to us.  In fact, the respondents have  consciously relinquished their right, if any.     

It is not a case where Sections 48 and 49 of the 1958 Act would be  applicable so as to enable the respondents to raise a defence in terms of  Section 30(1)(b) thereof.   

       It is also not a case where non-registration of MOU as was the case  in Amteshwar Anand v. Virender Mohan Singh and Others [(2006) 1 SCC  148] was taken as a shield to defeat the purpose of the agreements entered  into by and between the parties.  In that case, however, what was contended  was that the agreement required registration in terms of Section 17(1) of the  Registration Act whereas the High Court had found that the user agreement  was not registered in terms of Section 49 of the Act holding:

"\005The Composition Deed in this case was a  transaction between the members of the same  family for the mutual benefit of such members. It  is not the appellants’ case that the agreements  required registration under any other Act. Apart  from this, there is the principle that Courts lean in  favour of upholding a family arrangement instead  of disturbing the same on technical or trivial  grounds particularly when the parties’ have  mutually received benefits under the arrangement.   Both the courts below had concurrently found that  the parties had enjoyed material benefits under the  agreements. We have ourselves also re-scrutinized  the evidence on record on this aspect and have  found nothing to persuade us to take a contrary  view. Furthermore, in this case the agreements had

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merged in the decree of the Court which is also  excepted under Sub-section 2(vi) of Section 17 of  the Registration Act, 1908"

       In re Cadbury Brothers’ Application (supra), it is stated:

"It seems to me manifest that the registration of  this trade mark cannot give rise to any rights  except a right to the mark as a whole.  It cannot  give any statutory rights at all in respect of the  word "Tudor"; and, that being so, it is inexpedient  to place on the register an unnecessary disclaimer,  because the effect of so doing is to unsettle the law  and give rise to doubts in other cases, where such  disclaimers are not inserted\005"

       For the self-same reason, this decision is also not applicable.

ESSENCE OF PASSING OFF ACTION

       In a case of this nature, the test for determination of the dispute  would be the same where a cause of action for passing off arises.  The  deceptively similar test, thus, would be applicable herein.

       The doctrine of passing off is a common law remedy whereby a  person is prevented from trying to wrongfully utilise the reputation and  goodwill of another by trying to deceive the public through ’passing off’  his goods.

       In Kerly’s Law of Trade Marks and Trade Names’ Supplement pages  42 and 43, paragraph 16-02, the concept of passing off is stated as under:

"The law of passing-off can be summarised in one  short general proposition no man may pass off his  goods as those of another. More specifically, it  may be expressed in terms of the elements which  the plaintiff in such an action has to prove in order  to succeed. These are three in number.  Firstly, he must establish a goodwill or reputation  attached to the goods or services which he supplies  in the mind of the purchasing public by association  with the identifying ’get-up’ (whether it consists  simply of a brand name or a trade descrip- tion,or  the individual features of labelling or packaging)  under which his particular goods or services are  offered to the public, such that the get-up is  recognised by the public as distinctive specifically  of the plaintiff’s goods or services.  Secondly, he must demonstrate a misrepresentation  by the defendant to the public (whether or not  intentional) leading or likely to lead the public to  belief that the goods or services offered by him are  the goods or services of the plaintiff. Thirdly, he must demonstrate that he suffers or, in  a quick time action, that he is likely to suffer  damage by reason of the erroneous belief  engendered by the defendant’s misrepresentation  that the source of the defendant’s goods or service  is the same as the source of those offered by the  plaintiff..."  

PASSING OFF - INFRINGEMENT

       Although, the defendant may not be using the actual trade mark of

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the plaintiff, the get up of the defendant’s goods may be so much like the  plaintiff’s that a clear case of passing off could be proved.  It is also  possible that the defendant may be using the plaintiff’s mark, the get up of  the defendant’s goods may be so different from the get up of the plaintiff’s  goods and the prices also may be so different that there would be no  probability of deception of the public.  However, in an infringement action,  an injunction would be issued if it is proved that the defendant is  improperly using the plaintiff’s mark.  In an action for infringement where  the defendant’s trade mark is identical with the plaintiff’s mark, the Court  will not enquire whether the infringement is such as is likely to deceive or  cause confusion.  The test, therefore, is as to likelihood of confusion or  deception arising from similarity of marks is the same both in infringement  and passing off actions.  [See Ruston & Hornsby Ltd. v. The Zamindara  Engineering Co., (1969) 2 SCC 727]

       In Parle Products (P) Ltd. v. J.P. and Co., Mysore [(1972) 1 SCC  618], emphasis was laid on the broad and essential features of the  impugned mark holding:

"\005It would be enough if the impugned mark bears  such an overall similarity to the registered mark as  would be likely to mislead a person usually dealing  with one to accept the other if offered to him\005"

       Noticing the similarity of the mark in question with that of the  impugned mark, it was opined that "if one was not careful enough to note  the peculiar features of the wrapper on the plaintiffs’ goods, he might easily  mistake the defendants’ wrapper for the plaintiffs’ if shown to him some  time after he had seen the plaintiffs’".

       It was further stated:

"\005After all, an ordinary purchaser is not gifted  with the powers of observation of a Sherlock  Homes. We have therefore no doubt that the  defendants’ wrapper is deceptively similar to the  plaintiffs’ which was registered. We do not think it  necessary to refer to the decisions referred to at the  bar as in our view each case will have to be judged  on its own features and it would be of no use to  note on how many points there was similarity and  in how many others there was absence of it."

In Kaviraj Pandit Durga Dutt Sharma v. Navaratna Pharmaceutical  Laboratories [AIR 1965 SC 980], this Court held: "\005These matters which are of the essence of  the cause of action for relief on the ground of  passing off play but a limited role in an action for  infringement of a registered trade mark by the  registered proprietor who has a statutory right to  that mark and who has a statutory remedy for the  event of the use by another of that mark or a  colourable imitation thereof. While an action for  passing off is a Common Law remedy being in  substance an action for deceit, that is, a passing off  by a person of his own goods as those of another,  that is not the gist of an action for infringement.  The action for infringement is a statutory remedy  conferred on the registered proprietor of a  registered trade mark for the vindication of the  exclusive right to the use of the trade mark in  relation to those goods" (Vide Section 21 of the  Act). The use by the defendant of the trade mark of  the plaintiff is not essential in an action for passing  off, but is the sine qua non in the case of an action

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for infringement. No doubt, where the evidence in  respect of passing off consists merely of the  colourable use of a registered trade mark, the  essential features of both the actions might  coincide in the sense that what would be a  colourable imitation of a trade mark in a passing  off action would also be such in an action for  infringement of the same trade mark\005

In Poddar Tyres Ltd. v. Bedrock Sales Corporation Ltd. and another  [AIR 1993 Bombay 237], Srikrishna, J., as His Lordship then was, repelled  the contention that any trader who exclusively sells the goods bearing a  registered trade mark, has a right to adopt a trade name which could include  the said trade mark and that such adoption would not amount to  infringement or passing off stating:

"\005Mr. Rahimtoola was not able to cite any  authority for the proposition propounded, which I  find somewhat startling. The consequences of  accepting this proposition would mean that the  registered proprietor would be at the mercy of  anyone who sells the goods bearing his trade mark.  In a situation like the present, where the businesses  are overlapping, the trade channels are almost  identical and the family background is  conspicuous, I am of the view that there would be  an inherent likelihood of confusion in the minds of  the public that not only that the goods, which  emanate from the first defendants, are "Bedrock"  goods, but also further that the first defendants’  business is somehow intimately connected with the  plaintiffs’, either as a branch, agency or otherwise.  There is also the danger, as rightly emphasized by  the plaintiffs, that any act or omission of the first  defendants would have deleierious repercussion on  the credit, reputation and goodwill of the plaintiffs  themselves. For example, if the first defendants  were to commit an act of insolvency or do any act  which tarnishes their reputation in the market,  there is imminent likelihood of people jumping  into the confused conclusion that the plaintiffs had  committed an act of insolvency or that they had  done something objectionable. I am, therefore,  unable to accept the contention of the first  defendant that, by their purportedly selling  exclusively "Bedrock" goods, they are entitled to  adopt the word "Bedrock" as a part of their  company name or trading style. That they have  done so is not really disputed. In my view,  therefore, there is both infringement and passing  off action, prima facie."

De Cordova and Others v. Vick Chemical Co. [1951 (68) RPC 103]  is nearer the issue involved herein as in that case the registered trade mark  consisting of the word ’Vaporub’ and another registered trade mark  consisting of a design of which the words ’Vicks Vaporub Salve’ formed a  part.  The defendants in the suit advertised their ointment as ’Karsote  Vapour Rub’.  It was held that the defendants had infringed the registered  trade mark.

       The said decision was quoted with approval by this Court in K.R.  Chinna Krishna Chettiar v. Shri Ambal and Co., Madras and Another [1969  (2) SCC 131] wherein the question was whether the word ’Ambal’

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resembles the sound of the word ’Andal’.  It was held to be so upon  rejecting an argument advanced on behalf of the defendant that the same  had distinct meanings stating:

"\005The Hindus in the south of India may be well  aware that the words Ambal and Andal represent  the names of two distinct Goddesses. But the  respondent’s customers are not confined to Hindus  alone. Many of their customers are Christians,  Parsees, Muslims and persons of other religious  denominations. Moreover, their business is not  confined to south of India. The customers who are  not Hindus or who do not belong to the south of  India may not know the difference between the  words Andal and Ambal. The words have no direct  reference to the character and quality of snuff. The  customers who use the respondent’s goods will  have a recollection that they are known by the  word Ambal. They may also have a vague  recollection of the portrait of a benign goddess  used in connection with the mark. They are not  likely to remember the fine distinctions between a  Vaishnavite goddess and a Shivaite deity\005"

       We may not lose sight of the fact that the mark was assigned in  favour of the Company as far back in the year 1992.  The mark did not  come to the company through MOU or otherwise.          LACHES AND ACQUIESCENCE

       The plea of acquiescence on the part of the appellant herein has been  raised on two counts:

(i)     The plaintiffs- appellant permitted the respondents to carry on  business in the trade name of ’Ramdev Masala".

(ii)    It is, thus, also not entitled to an order of injunction.

       The appellant by a registered notice dated 12/15-12-1998 asked the  defendant Nos. 1 and 7 that the firm ’Ramdev Masala’ had been  unauthorisedly using the appellant-company registered trade mark in  respect of its product sold and manufactured by them and on the packing  materials, labels, boxes, poly pouches.  They were called upon to restrain  from doing so with immediate effect and destroy the necessary label/  packets of packing materials failing which it was threatened that a legal  action would be taken.

       For determining the said issues, we may notice the following facts.  

       A civil suit was filed by the first respondent in the Ahmedabad City  Civil Court wherein a prayer was made that the deed of assignment be  declared null and void and the appellant herein be permanently restrained  from using the same as also for a declaration that they are the owners of the  said trade mark/trade name.  However, an interim order as prayed for  therein was not granted.  A First Information Report was also lodged  against the respondents by the appellant-Company before the Madhupura  Police Station for commission of an alleged offence under Section 63 of the  Copyright Act and Sections 78 and 79 of the 1958 Act as well as Sections  417, 420, 419 and 486 of the Indian Penal Code.  An application for  quashing the said complaint was filed before the Gujarat High Court on  4.8.1999.  It was dismissed by an order dated 26.10.1999.  A Special Leave  Petition preferred thereagainst being SLP (Crl.) No. 3900 of 1999 was also  dismissed by this Court by an order dated 14.12.1999.  In the meanwhile, a

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rectification application was filed by the respondents before the Registrar  of Trade Mark, Mumbai allegedly stating that the registered trade mark  bearing No. 447700 was not being used by the plaintiff, it was not entitled  to continue to claim title thereover or use the same.  Various applications  were moreover filed by the respondents herein for rectification of the entry  in the register in respect of various label marks of the appellant.  The  appellant thereafter issued a public notice on 17.12.1999 calling upon the  respondents to restrain themselves from infringing upon the trade mark of  the appellant, in respect whereto a public notice was also issued by the  respondents herein on 21.12.1999.  The suit thereafter was filed on  10.2.2000.  Contention of the respondents in this behalf was that not only in  terms of the MOU the appellant had been allowed to carry on business  under the name and style of ’Ramdev Masala’, no immediate step having  been taken after issuance of the public notice dated 15.12.1998 for long  time, they were not entitled to obtain an order of injunction.  Delay in some  cases may defeat equity but the chronology of events noticed hereinbefore  do not suggest that the appellant’s consciously allowed the respondents to  use the trade mark.            Acquiescence is a facet of delay.  The principle of acquiescence  would apply where: (i)  sitting by or allow another to invade the rights and  spending money on it; (ii) it is a course of conduct inconsistent with the  claim for exclusive rights for trade mark, trade name, etc.   

       In M/s. Power Control Appliances and Others v. Sumeet Machines  Pvt. Ltd. [(1994) 2 SCC 448], this Court stated:

"Acquiescence is sitting by, when another is  invading the rights and spending money on it. It is  a course of conduct inconsistent with the claim for  exclusive rights in a trade mark, trade name etc. It  implies positive acts; not merely silence or  inaction such as is involved in laches\005"

       In an infringement of trade mark, delay by itself may not be a ground  for refusing to issue injunction as has been observed by Lahoti, J. (as His  Lordship then was) in Midas Hygiene Industries (P) Ltd. v. Sudhir Bhatia  and Others [(2004) 3 SCC 90] in the following terms:

"The law on the subject is well settled. In cases of  infringement either of trade mark or of copyright,  normally an injunction must follow. Mere delay in  bringing action is not sufficient to defeat grant of  injunction in such cases. The grant of injunction  also becomes necessary if it prima facie appears  that the adoption of the mark was itself dishonest."                                                     (Emphasis supplied)

       The defence of acquiescence, thus, would be satisfied when the  plaintiff assents to or lay by in relation to the acts of another person and in  view of that assent or laying by and consequent acts it would be unjust in  all the circumstances to grant the specific relief.

       Kerr in his "Treatise on the Law and Practice of Injunction", Sixth  Edition at pages 360-361 states as under:

"Mere delay after knowledge of the infringement  to take proceedings, not sufficient to call the  Statute of Limitations into operation, or where the  infringement continues, is not, it seems, a bar to  the right of an injunction at the trial.  Lapse of time  unaccompanied by anything else is, it seems, no  more a bar to a suit for an injunction in aid of the  legal right than it is to an action deceit.

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       But delay may cause the Court to refuse an  interlocutory injunction, especially if the defendant  has built up a trade in which he has notoriously  used the mark\005"

       Specific knowledge on the part of the plaintiff and prejudice suffered  by the defendant is also a relevant factor.     [See Spry on Equitable  Remedies, Fourth Edition, page 433]

       Applying the aforementioned principles in the instant case, it is  evident that the time gap between the issuance of the notice and filing of an  application for grant of injunction was not a voluntary act on the part of the  appellant herein.  It had to wait for the outcome of various proceedings  pending before different courts.  The respondents having themselves taking  recourse to judicial proceedings, as noticed hereinbefore, cannot now be  permitted to set up the defence of acquiescence on the part of the appellant.   Indisputably, in a case of infringement of trade mark, injunction would  ordinarily follow where it is established that the defendant had infringed the  trade mark and had not been able to discharge its burden as regard the  defence taken by it.

       In Pioneer Electronic Corporation and Another v. Registrar of Trade  Marks [(1978) RPC 716], an Australian Court referring to a large number  of decisions observed:

"These cases demonstrate that the essential  requirement for the maintenance of the validity of  a trade mark is that it must indicate a connection in  the course of trade with the registered proprietor,  even though the connection may be slight, such as  selection or quality control or control of the user in  the sense in which a parent company controls a  subsidiary.  Use by either the registered proprietor  or a licensee (whether registered or otherwise) will  protect the mark from attack on the ground of non- user, but it is essential both that the user maintains  the connection of the registered proprietor with the  goods and that the use of the mark does not  become otherwise deceptive.  Conversely,  registration of a registered user will not save the  mark if there ceases to be the relevant connection  in the course of trade with the proprietor or the  mark otherwise becomes deceptive."

       [See also Holly Hobbie Trade Mark, (1984) RPC 329.]

INJUNCTION ISSUE

It is although beyond any doubt or dispute that the defendant had  been manufacturing and selling its products; what is sought to be injuncted  is using a label which is deceptively similar to that of the plaintiff.

       Our attention has been drawn to the right of the parties of the second  and third part of the MOU to carry out export business in the brand name of  ’Ramdev’ which, in our opinion, does not advance their case as by reason  thereof, the appellant-Company had been also conferred right to carry on  the export business in the name of ’Ramdev’.

       It is also not correct that having regard to the fact that the property  situated at Sola having been given in favour of the respondents, they have

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acquired a vested right in the trade mark as has been urged before us or  otherwise.  Respondents did not have any right over the trade mark.  They  in fact, it will bear repetition to state, assigned the same in favour of the  appellant-Company.  They have assigned the said trade mark and having  relinquished their right, Respondents, thus, now cannot fall back on Section  33 of the 1958 Act.  It may be true that there exists a distinction between a  suit in a trade mark action against the whole world and a suit for  implementation of division of assets amongst the members of the family.  But, after the MOU was entered into the parties having separated ceased to  be members of a joint family.  What was, thus, essential for determining the  right of the parties would be the terms of the MOU.

       Registration of a trade mark and user thereof per se may lead to the  conclusion that the plaintiff has a prima facie case, however, existence  thereof would also depend upon the determination of the defences raised on  behalf of the respondents.  The appellant has raised a triable issue.  The  same by itself although may not be sufficient to establish a prima facie case  but in view of our findings aforementioned, we are satisfied that the  appellant has been able to establish existence of a legal right in itself and  violation of the registered trade mark on the part of the respondents.  We  have also considered the comparable strength of the cases of the parties and  are of the opinion that the case of the plaintiff-appellant stands on a better  footing than the defendants-respondents.

       A question as regards the matter relating to grant of injunction has  been dealt in S.M. Dyechem Ltd. v. Cadbury (India) Ltd. [(2000) 5 SCC  573] wherein upon noticing a large number of decisions including Colgate  Palmolive (India) Ltd. v. Hindustan Lever Ltd. [(1999) 7 SCC 1] as also the  subsequent distinction made in respect of the decision of the House of  Lords in American Cyanamid v. Ethicon Ltd. [(1975) 1 All ER 853], it was  stated :

"\005Therefore, in trademark matters, it is now  necessary to go into the question of "comparable  strength" of the cases of either party, apart from  balance of convenience.

In M/s. Transmission Corporation of A.P., Ltd. v. M/s. Lanco  Kondapalli Power Pvt. Ltd.  [JT 2005 (10) SC 542], it was held :

       "The interim direction ordinarily would  precede finding of a prima facie case.  When  existence of a prima facie case is established, the  court shall consider the other relevant factors,  namely, balance of convenience and irreparable  injuries. The High Court in its impugned judgment  although not directly but indirectly has considered  this aspect of the matter when on merit it noticed  that the Appellant has raised a dispute as regard  payment of an excess amount of Rs.35 crores  although according to the Respondent a sum of  Rs.132 crores is due to it from the Appellant and  the Appellant had been paying the amount for the  last two years as per the contract.

Conduct of the parties is also a relevant factor.  If  the parties had been acting in a particular manner  for a long time upon interpreting the terms and  conditions of the contract, if pending  determination of the lis,  an order is passed that the  parties would continue to do so, the same would  not render the decision as an arbitrary one, as was  contended by Mr. Rao.  Even the Appellant had  prayed for adjudication at the hands of the  Commission in the same manner.  Thus, it itself

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thought that the final relief would be granted only  by the Arbitrator."

       We also do not appreciate the conduct of the respondents.  They were  aware of the rights under the MOU.  They had all along been enforcing the  same.  Legal defence were available to them under the 1958 Act.   Evidently, they filed a suit to scuttle the intended action on the part of the  respondents pursuant to the public notice dated 15.12.1998.

       In P.M. Diesels Ltd.  v. Patel Field Marshal Agencies & Others  [2001 PTC 20 (Del)], the High Court noticed the distinction between logo,  trade mark and trade name and was of the view that the defendants cannot  be permitted to use the trade name so as to defeat the other portion of the  order of injunction already passed against him.  An injunction can also be  granted against the respondents to use the corporate name.         Relief by way of interlocutory injunction would be material in a suit  for infringement of trade mark.  Balance of convenience, however, would  have a vital role to play.          We are not oblivious of the fact that respondents have been  manufacturing and carrying on business in the sale of spices under the  name ’Ramdev Masala’ even during pendency of the suit.  The learned  Trial Judge had made an attempt to strike the balance.  The High Court,  however, had overturned a part of it having regard to the statutory interdict  contained in the Rules made under the Prevention of Food Adulteration Act  and Standards of Weights and Measures Act.

       Kerly’s Law of Trade Marks and Trade Names, Thirteenth Edition  states as under about the general test for grant of an interim injunction:

"In trade-mark infringement cases irreparable  damage, in this sense, is relatively easily shown,  since infringement may easily destroy the value  of a mark or at least nullify expensive advertising  in a way that is hard to quantify for the purposes  of an inquiry into damages.  This has more  recently come to be referred to, in cases where the  defendant’s conduct is not directly damaging but  merely reduces the distinctive character of the  claimant’s mark, as "dilution"\005.

       \005In particular, although it is usually  neither necessary nor appropriate to assess the  degree of probability of success which the  claimant’s action has (provided that it is arguable,  and subject to the principle of American  Cyanamid that the merits may be resorted to as a  ’tie-breaker’ if the balance of convenience is very  even,) in trade mark and passing off cases, it is  very hard to avoid doing so, since the better the  claimant’s case on the likelihood of deception  (frequently the major issue) the greater the harm  which he is likely to suffer.  Accordingly, in  appropriate cases, where the state of the evidence  permits it, the court may seek to weigh up the  merits in deciding whether to grant interim  relief."

       Thus, when a prima facie case is made out and balance of  convenience is in favour of the appellant, it may not be necessary to show  more than loss of goodwill and reputation to fulfil the condition of  irreparable injury.  In fact, if the first two pre-requisites are fulfilled, in  trade mark actions irreparable loss can be presumed to have taken place.  

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       The expression "irreparable injury" in that sense would have  established injury which the plaintiff is likely to suffer.

       In Mahendra & Mahendra Paper Mills Ltd. v. Mahindra & Mahindra  Ltd. [(2002) 2 SCC 147], this Court observed:

"23. The Bombay High Court in the case of  Kirloskar Diesel Recon (P) Ltd. v. Kirloskar  Proprietary Ltd. considered the scope of granting  injunction in a suit for infringement of a trade  mark under Section 106 of the Act by the use of  the mark "Kirloskar", held:

"The principle of balance of convenience applies  when the scales are evenly balanced. The existence  of the 1st appellant in each appeal is very recent  whereas the existence of the respondents belonging  to ’Kirloskar Group of Companies’ has been for  over a period of 50 years. On their own showing,  the appellants are not using the word ’Kirloskar’ as  trade mark but as part of trading style whereas the  respondents have not only acquired distinctiveness  and goodwill in the word ’Kirloskar’ but it is even  the registered trade mark of the 1st respondent.  There is sufficient evidence on record to show that  the huge business is carried by ’Kirloskar Group of  Companies’. There is nothing on record to show the extent of  the business of the appellants. The 2nd appellant  has throughout been aware about the business  reputation of the respondents and efforts of the  respondents in protecting their rights in the trade  marks as also of preventing others to use the word  ’Kirloskar’ as a part of the trading name or trading  style. By grant of the interim injunction in favour  of the respondents, the appellants are not prevented  from carrying on business without the word  ’Kirloskar’ forming part of the corporate name of  the 1st appellant in each appeal. In the facts of the  case, the respondents’ reputation is likely to be  adversely affected if the appellants are not  prevented from using name of the 1st appellant in  each appeal. In the facts of the case, the balance of  convenience is not in favour of the appellants.                 *               *               * The real question in each case is whether there is  as a result of misrepresentation a real likelihood of  confusion or deception of the public and  consequent damage to the plaintiff. The focus is  shifted from the external objective test of making  comparison of activities of parties to the state of  mind of public in deciding whether it will be  confused. With the passage of time and reputation  acquired, the trade mark ’Kirloskar’ has acquired  the secondary meaning and has become almost a  household word. The judgments relied upon by Mr  Kane pertain to the cases of one type of business  and not where variety of businesses have been  carried by the plaintiff and the defendant as in the  instant case. The business activities of the  respondents vary from pin to piano as borne out  from the object clauses of the memorandums of  association of the respondents. The appellants have  still to commence their business activities but as

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mentioned in the memorandums of association of  the 1st appellant in each appeal, some of the object  clauses therein overlap with the activities of  respondents and more particularly of Respondents  6 and 7."

APPELLATE COURT’S JURISDICTION TO INTERFERE WITH  ORDERS OF THE TRIAL JUDGE

       We are not oblivious that normally the appellate court would be  slow to interfere with the discretionary jurisdiction of the trial court.          The grant of an interlocutory injunction is in exercise of  discretionary power and hence, the appellate courts will usually not  interfere with it. However, appellate courts will substitute their discretion  if they find that discretion has been exercised arbitrarily, capriciously,  perversely, or where the court has ignored settled principles of law  regulating the grant or refusal of interlocutory injunctions. This principle  has been stated by this court time and time again. [See for example  Wander Ltd. v. Antox India P. Ltd (1990) Supp SCC 727, Lakshmikant V.  Patel v. ChetanBhai Shah (2002) 3 SCC 65 and Seema Arshad Zaheer v.  MC of Greater Mumbai (2006) 5 SCALE 263]

       The appellate court may not reassess the material and seek to reach a  conclusion different from the one reached by the court blow if the one  reached by that court was reasonably possible on the material. The  appellate court would normally not be justified in interfering with the  exercise of discretion under appeal solely on the ground that if it had  considered the matter at the trial stage it would have come to a contrary  conclusion.  

       However, in this case the courts below proceeded on a prima facie  misconstruction of documents.  They adopted and applied wrong  standards.  We, therefore, are of the opinion that a case for interference has  been made out.

CONCLUSION

       Our findings aforementioned, it goes without saying, are prima facie  in nature.  We place on record that Mr. Nariman contended that there is  evidence to show the contrary intention of the parties in respect whereof a  large number of documents are available.  Evidently respondents may  prove.  No such document is, however, before us.  If the respondents, at the  trial, could bring the same on record, evidently the court would be entitled  to draw its own inference.   

       We have differed with the findings of the courts below primarily on  the interpretation of the MOU.  In that view of the matter, we are of the  opinion that in this case this Court would be justified to interfere with the  said findings.  We are, however, not oblivious of the damages which may  have to be suffered by respondents herein in the event the suit of the  appellant is to be ultimately dismissed.  We intend to protect the same also.

       For the said purpose, we would take into consideration the terms of  the injunction granted by the Trial Judge that the respondents were entitled  to sell their products in the name of M/s. Ram Dev Masala only from the  seven outlets.  The modification made by the High Court has already been  noticed by us.

       We, in view of our findings aforementioned, direct:

(i)     The respondents be restrained from using the trade mark   including the trade name ’Ramdev Masala’ in any of their  products.

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(ii)    They may, however, carry on their business in any other name  insofar as manufacturing of spices is concerned.

(iii)   The appellant shall, as and when demands are made, supply  spices produced by it for retail sale thereof to seven outlets  belonging to respondents on usual terms, and in respect of such  articles on the labels/pouches, on the reverse thereof, the  following shall be mentioned in the minimum permissible size in  terms of the provisions of Weights and Measures Act and  Prevention of Food Adulteration Act: "This product is manufactured and marketed by M/s. Ramdev  Masala (Arvindbhai Group) (Or M/s. Ramdev Exports  Arvindbhai Group) having no relationship whatsoever with  Ramdev Food Products Pvt. Ltd."

(iv)    The appellant shall deposit a sum of Rs. 50 lakhs before the Trial  Court or furnish a bank guarantee for the said sum by way of  security.   

(v)     Despite pending applications for rectification before the Registrar  of Trade Marks, the final hearing of Civil Suit No. 828 of 2000  shall be expedited and the learned Trial Judge is hereby directed  to complete the hearing as expeditiously as possible preferably  within a period of six months from the date of communication of  this order.

       For the reasons aforementioned, these appeals are allowed.  The  respondents shall pay and bear the costs of the appellant of these appeals.   Counsel’s fee assessed at Rs. 25,000/-.