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CASE NO.: Appeal (civil)  6622 of 2005

PETITIONER: Bhavanesh Mohanlal Amin and Anr.                         

RESPONDENT: Nirma Chemicals Works and Anr.                           

DATE OF JUDGMENT: 07/11/2005

BENCH: ARIJIT PASAYAT & C.K. THAKKER

JUDGMENT: J U D G M E N T (Arising out of SLP (C) No. 12120 OF 2005)

ARIJIT PASAYAT, J.  

       Leave granted.

       Challenge in this appeal is to the legality of the  judgment rendered by a learned Single Judge of the Gujarat  High Court upholding the order passed by City Civil Judge,  Ahmedabad in Suit No.1952/1999 granting ad interim  injunction restraining the appellants from using the mark  "NIMA".   

       The background facts giving rise to the appeal  essentially are as follows:

         The respondents-original plaintiffs filed civil suit  no.1952/1999 for a declaration and permanent injunction,  projecting the factual position as follows:-           The plaintiff no.1 is a Company incorporated under the  provisions of the Companies Act, 1956 and plaintiff no.2 is  a Trust registered under the provisions of the Indian Trust  Act, 1882. Plaintiff no.1 is the owner and proprietor of the  trade mark NIRMA and the same trade mark has been assigned  in favour of plaintiff no.1 by way of assignment deed.  The  assignment deed is filed for registration under the  provisions of the Trade Marks Act, 1999 (in short the ’Act’)  and plaintiff no.1 is engaged in the business of  manufacturing and marketing various consumer products in  India and elsewhere.

       The plaintiff’s predecessor-in-title started  manufacturing and marketing detergent powder, detergent cake  and other products in India and elsewhere.  The word NIRMA  has been coined and invented from the name of NIRUPAMA,  daughter of Smt. Shantaben K. Patel, a partner of the said  partnership firm and as such trade mark NIRMA has been  registered. The same is continuously used in various packing  materials for different products i.e. soap, detergent  powder, detergent cake, cleaning preparations, etc.

       Trade mark "NIMA" is also used and got registered  under the Act in respect of various classes like spices,  match box and other consumer items.  Plaintiff’s products  are sold throughout India and the name NIRMA has acquired

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reputation and goodwill in the market.  The plaintiffs have  applied for registration of similar names NIRMAL, NIMA and  also applied for exclusive right to use of the said words.   Plaintiffs have got registration of mark NIMA. The plaintiff  no.1 is registered at Registration No.422839 in respect of  the goods covered in Class 7 and, therefore, the use of the  same or any other identical or deceptively similar name by  any other person, more particularly by the defendants  amounts to infringement to the plaintiff’s trade marks.   Trade mark NIMA is also registered bearing Registration  No.396185/B of 1982.

       It is alleged that the appellants-defendants have  adopted and started using the word NIMA for their product  flour mills.  Therefore, Notice was served on 22.9.1998  calling upon the defendants to stop using the trade mark  NIMA.  The defendants replied to the Notice on 7.10.1998.  Again, another notice was served to which there was no  reply.  According to the plaintiffs, by using the word NIMA  the defendants are creating confusion and deception in the  mind of general public because the word NIMA is identical  and deceptively similar to the plaintiff no.1’s very popular  trade mark NIRMA.  However, the defendants declined to stop  using the word NIMA for their products. Under these  circumstances, the plaintiffs filed the aforesaid Civil  Suit.   

       The trial Court after hearing the parties passed an  order on 11.2.2000, whereby the appellants were restrained  by an order of temporary injunction from manufacturing and  marketing their products i.e. flour mills (Ghar Ghanti) by  using the word NIMA till hearing and final disposal of the  suit.

       Against the aforesaid order the appeal was filed before  the Gujarat High Court by the original defendants. As noted  above the High Court dismissed the appeal.   

       The High Court referred to several decisions of this  Court and various High Courts and held that the trial Court  was justified in granting ad interim injunction in favour of  the plaintiffs.  It came to the following findings:

"From the above discussions, it is clearly  established that the plaintiffs have  statutory rights since they have registration  of the trade marks NIRMA and NIMA. If  injunction was not granted in favour of the  plaintiffs, it would have amounted to  infringement of the trade mark of the  plaintiffs.  The trial Court has rightly  concluded that if the defendants were  restrained from using the mark NIMA, it would  not cause any irreparable loss to the  defendants since the defendants had entered  the market only before a couple of years,  whereas against that, the plaintiffs were  doing business with the said marks since the  last two decades.  Moreover, the total  turnover of the plaintiffs is more than 900  crores and average annual budget for  advertisement is about 11-12 crores.   Therefore, if the defendants are not  restrained from using the said mark, it would  cause irreparable loss to the business,

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reputation, goodwill etc. of the plaintiffs.  As said above, if the defendants are  aggrieved by the presence of the said mark on  the register, the only course available to  them is to prefer rectification application  before the appropriate authority in order to  get the said mark scored off of the  register."

       In the present appeal the primary stands of the  appellants are as follows:

       "Appellant No.1 is a firm inter alia  engaged in the manufacturing, marketing and  selling of electric flour mill (Ghar Ghanti)  since 12.4.1997. The application dated  29.10.1998 w.e.f. 12.4.1997 for registration  of the mark "NIMA" filed by the appellants  is pending before the Trademarks Registry,  Ahmedabad in respect of products under class  7 being machines and machine tools, motors  (except for land vehicles), machine coupling  other than belting (except for land  vehicles).

       The respondents, on the other hand, are  owners of registered trademark "NIRMA" for  goods under Class 3 being washing soaps and  detergents in the form of powder, cake or bar  (not for use in industrial or manufacturing  processes), cleaning powder.  They hold a  trade mark "NIRMA" in respect of goods  under Class 7 since 25.6.1984. The  respondents herein according to appellants  have never used the trademark "NIRMA" for  the goods falling under Class 7 for last more  than two decades.

       The goods falling under Class 7 are as  under:-

Class 7:- Machines and machine tools;  motors and engines (except for land  vehicles); machine coupling and  transmission components (except for land  vehicles) agricultural implements other  than hand operated; incubator for eggs.

       Respondents also hold a registered  trademark with respect to mark "NIMA" since  8.10.1982 with respect to goods under Class  3.

       The goods falling under Class 3 are as  under:-

Class 3:- Bleaching preparations and  other substances for laundry use;  cleaning, polishing; scouring and  abrasive preparations; soaps, perfumery,  essential oils, cosmetics, hair lotion,  dentrifices.          The respondents got registered trademark with

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respect to mark "NIMA" under Class 7 goods  on 20.12.2004 w.e.f. 15.10.1998 i.e.  subsequent to the date from which the  appellants have been using the mark "NIMA"  for manufacturing and selling electric flour  mill which falls under Class 7.  With respect  to mark "NIMA" the appellants herein are a  prior user for goods falling under Class 7.  In any case, the respondents have not used  the mark "NIMA" or "NIRMA" for goods or  products under Class 7 till date."                  Learned counsel for the appellants has further  submitted that the High Court erred in upholding the order  of restraining appellants from using mark "NIMA" as the  action of passing of is immaterial when the case of the  parties are different, their trade channels are different  or prices are different. It was pointed out that the  appellants had prior user in respect of the mark NIMA for  goods under Class 7 of the Act.  It was further submitted  that the appellants and the respondents dealt with  completely different Class of goods with different prices  and customers and, therefore, ad interim injunction should  have been granted.  The trademark NIMA was resisted only  in respect to the goods under Class 7 at the relevant time  and, therefore, the High Court should not have extended  the protection with respect to goods falling under Class  7.   

       In response, learned counsel for the respondent  submitted that goodwill generated by the respondents by  huge investments is intended to be exploited by the  appellants by using deceptively similar names.  It is a  clear case of passing off.  It was pointed out that as the  phrase ’passing off’ itself suggests in an action of  ’passing off’ is to restrain the defendant from passing  off its goods or service to the public as the plaintiffs.   It is an action not only to preserve the reputation of the  plaintiff but also to safeguard the public.  With respect  to decisions of this Court in Mahendra & Mahendra Paper  Mills Ltd. v. Mahindra & Mahindra Ltd. (AIR 2002 SC 117)  and Satyam Infoway Ltd. v. Sifynet Solutions (P) Ltd.  (2004 (6) SCC 145) and the large number of other decisions  it was submitted that the ad interim injunction was  granted by the trial Court on proper consideration of  relevant aspects. It is submitted that the High Court was  justified in upholding the order of ad interim injunction  after analysing the legal position in detail, and keeping  in view the jurisdiction of appellate Courts in such  matters.

       In Cadila Healthcare Ltd. v. Cadila Pharmaceuticals  Ltd. (JT 2001 (4) SC 243), this Court laid down certain  factors in order to decide an action of passing off on the  basis of unregistered trade mark. It has held that factors  like nature of the marks i.e. whether the marks are word  marks or label marks, the degree of resembleness between  the marks phonetically similar and hence similar in idea,  the nature of the goods in respect of which they are used  as trade marks, the similarity in the nature, character  and performance of the goods of the rival traders, the  class of purchasers who are likely to buy the goods  bearing the marks they require, the mode of purchasing the  goods or placing orders for the goods and any other  surrounding circumstances which may be relevant in the

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extent of dissimilarity between the competing marks are to  be considered.   

       In Mahendra & Mahendra case (supra) it was observed as  follows:

       "........the name has acquired a  distinctiveness and a secondary meaning in  the business or trade circles.  People have  come associate the name "Mahindra" with a  certain standard of goods and services. Any  attempt by another person to use the name in  business and trade circles is likely to and  in probability will create an impression of a  connection with the plaintiffs’ group of  companies.  Such user may also effect the  plaintiff prejudicially in its business and  trading activities."      

       In Satyam Infoway Ltd. case (supra) it was held that to  establish an action of passing off three elements are  needed to be established.  They are as follows:   

"(a) The first element in an action for  passing off, as the phrase "passing off"  itself suggests, is to restrain the defendant  from passing off its goods or services to the  public as that of the plaintiff’s.  It is an  action not only to preserve the reputation of  the plaintiff but also to safeguard the  public.  The defendant must have sold its  goods or offered its services in a manner  which has deceived or would be likely to  deceive the public into thinking that the  defendant’s goods or services are the  plaintiffs.  (b) The second element that must  be established by the plaintiff is  misrepresentation by the defendant to the  public and what has to be established is the  likelihood of confusion in the minds of the  public that the goods or services offered by  the defendant are the goods or the services  of the plaintiff.  In assessing the  likelihood of such confusion the Courts must  allow for the "imperfect recollection of a  person of ordinary memory".  (c) The third  element of a passing off action is loss or  the likelihood of it."                 

       We find that it would not be proper to go into the  legal position to be applied to the factual background in  detail.  The High Court noted and directed as follows:

       "However, since the suit in question is  of the year 1999, the City Civil Court,  Ahmedabad, is directed to expedite its  hearing and to dispose it of within a period  of six months, if it is already ripe for  hearing; otherwise, within a period of two  years from the receipt of writ of this order.   Office is directed to send writ of this order  forthwith.  With the above observations and  directions, this appeal from order stands  disposed of.  Interim relief granted earlier  stands vacated.  No order as to costs."

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       It is pointed out by learned counsel for the  respondents that since the appellants have moved for action  in terms of Section 111 of the Trade and Merchandise Marks  Act, 1958 (in short the ’Old Act’) corresponding to Section  124 of the Act there is no scope for proceeding in the suit  further. Learned counsel for the parties agreed that an  early disposal of the matter would be in the interest of the  parties.  Learned counsel for the appellants fairly stated  that the question relating to bar of jurisdiction in terms  of Section 111 of the Old Act corresponding to Section 124  of the New Act shall not be raised and the trial Court would  be free to proceed with the suit.  

       In the aforesaid background we direct the trial Court  to dispose of the suit as early as practicable preferably by  the end of January, 2006. Residual question is whether as  contended by learned counsel for the appellants the  protection given by the High Court while disposing of the  appeal and extended by this Court initially by orders dated  27.5.2005 and 13.7.2005 should be continued as the  conclusions of the trial Court as affirmed by the High Court  are erroneous in law and the appellants have a fair chance  of success in the suit.  On the other hand, it was pointed  out by learned counsel for the respondents that the  respondents have succeeded before two courts and the correct  position in law has been kept in view.   

       On the peculiar circumstances, we feel it would be  desirable to vary the interim order to the extent that there  shall not be stay of operation of the High Court’s order but  without leave of the trial Court the respondents shall not  initiate any action for user of the mark NIMA by the  appellants till the disposal of the suit.  

       The appeal is disposed of without any order as to  costs.