M/S KRIZM HOTELS PRIVATE LIMITED v. M/S VAISHNAVI ESTATES(P) LTD

Delhi High Court · 01 Aug 2011 · 2011:DHC:3845

J.R. Midha

CS(OS) No. 2338/2009

2011:DHC:3845

civil appeal_allowed Significant

AI Summary

The Delhi High Court granted an ad-interim injunction restraining the defendant from using the trademark "Lemon Tree Apartments" for a housing project, holding it infringed the plaintiff's registered "Lemon Tree" mark and imposed costs for frivolous defense.

Full Text

CS(OS)No.2338/2009 HIGH COURT OF DELHI
CS(OS) 2338/2009

Reserved on : 30th May, 2011

Date of Decision: 1st August, 2011 M/S KRIZM HOTELS PRIVATE LIMITED ..... Plaintiff
Through : Mr. R.K. Aggarwal, Adv.

VERSUS

M/S VAISHNAVI ESTATES(P) LTD ..... Defendant
Through : Mr. S.K. Bansal, Adv.

CORAM :- THE HON'BLE MR. JUSTICE J.R. MIDHA

JUDGMENT

1. Whether Reporters of Local papers may YES be allowed to see the Judgment?

2. To be referred to the Reporter or not? YES

3. Whether the judgment should be YES reported in the Digest?

JUDGMENT

1. The plaintiff has filed this suit for permanent injunction for restraining infringement of trademark, service mark, copyright and for damages in respect of its trademark “Lemon Tree”. 2011:DHC:3845 1.[1] Along with the suit, the plaintiff filed I.A.No.15969/2009 for grant of ex-parte ad-interim injunction. Vide order dated 9th December, 2009, the summons in the suit and notice in the application were issued to the defendant. However, ex-parte ad-interim injunction was not granted to the plaintiff at that time. 1.[2] On 29th April, 2010, the plaintiff gave up the claim for violation of the copyright as well as passing off. In view thereof, the plaintiff‟s claim is now restricted to the claim for infringement of trademark only. 1.[3] The pleadings in the suit as well as in I.A.No.15969/2009 under Order XXXIX Rules 1 and 2 of the Code of Civil Procedure are complete.

2. Plaintiff’s Case 2.[1] The plaintiff is the proprietor of the registered trademark “Lemon Tree” in classes 8,12,16,17 and 42. The particulars of the seven registrations held by the plaintiff are given in para 12 of the plaint and the registration certificates have been placed on record as Annexure „F‟. The plaintiff has also applied for registration in Classes 29, 30, 31, 32 and 35 which are pending with the Trademark Registry. 2.[2] The plaintiff conceived and adopted the trade mark “Lemon Tree” in 2001 and started its use in October,

2002. The plaintiff opened its first hotel in Gurgaon in June, 2004. The plaintiff has eleven operational hotels under the name “Lemon Tree” in various states namely, Haryana, Goa, Maharashtra, U.P., Kerala, Gujarat, Madhya Pradesh, Tamil Nadu and Karnataka. Eight more hotels of the plaintiff are under construction. 2.[3] The plaintiff claims to have invested more than `5,000 crores in the hotel business. The financial reports and audited accounts of the plaintiff have been placed on record as Annexure „H‟. 2.[4] The plaintiff claims its hotel chain to be the country‟s first moderately priced, upscale, full service, business and leisure hotels for catering to the needs of affluent and middle class society. The plaintiff claims to have acquired high reputation in the market widely recognized in the country as well as abroad. The plaintiff further claims to have widely advertised in the media. The annual revenue generated and the expenditure incurred on advertisements by the plaintiff for the years ending 31st March, 2005 to 31st March, 2009 are given in para 18 of the plaint. In the year ending 31st March, 2005, the plaintiff generated revenue of `2,38,31,842/- out of which the plaintiff spent `2,00,051/- on advertisements. The annual revenue of the plaintiff increased to `56,24,55,700/- in the year ending 31st March, 2009 out of which the plaintiff has spent `26,34,238/- on the advertisements. The copies of the audited reports of the plaintiff for the years 2004-05 to 2008-09 are on record as Annexure „H‟. The write ups of the plaintiff‟s hotels are on record as Annexure-I. 2.[5] On 17th September, 2009, the plaintiff came to know that the defendant had started construction of residential apartments under the name and style of “Lemon Tree Apartments” at Madhapur, Hyderabad at a distance of about 2 kms from their hotel at Hyderabad known as Lemon Tree Hotel. The brochure of the defendant is on record as Annexure-J. The plaintiff immediately thereafter instituted the present suit seeking the injunction against the defendant. 2.[6] The adoption and use of trademark “Lemon Tree” by the defendant is not bonafide and innocent but malafide and with the dishonest intention of encashing the goodwill and reputation of the plaintiff. The defendant had been carrying on its construction business since the year 1997 in the name of M/s Vaishnavi Estates (P) Ltd. The defendant adopted the trademark “Lemon Tree” in 2009 in respect of its project at a distance of 2 kms from the plaintiff‟s hotel after the plaintiff‟s hotel at Madhapur, Hyderabad came into existence in 2008. According to the plaintiff, the defendant has no justification for adopting the plaintiff‟s registered trademark “Lemon Tree”. 2.[7] The defendant‟s trademark “Lemon Tree” is identical with the plaintiff‟s registered trademark. It is submitted that services of the defendant are also similar to the services of the plaintiff. The plaintiff is in the hotel business whereas the defendant is in the business of construction of housing apartments and the activities are similar and, therefore, the use of the trademark “Lemon Tree” by the defendant amounts to infringement of trademark under Section 29(2)(a) & (b) of the Trade Marks Act, 1999. 2.[8] Assuming though not admitting that the services of the plaintiff and the defendant are not similar, the use of the trademark “Lemon Tree” by the defendant amounts to infringement of trademark even under Section 29(4) of the Trade Marks Act, 1999 as the plaintiff‟s registered trademark “Lemon Tree” has reputation in India.

3. Defence of the defendant 3.[1] The defendant honestly and bonafidely adopted the trademark “Lemon Tree Apartments” in the year 2008 in relation to one of its housing projects launched in 2008-09 in Hyderabad. 3.[2] The defendant‟s trademark has become distinctive of the defendant‟s business. The defendant has already invested huge amount in the said business. 3.[3] The defendant has given wide publicity to its project under the said trademark. The defendant has invested heavily in promotion, advertisement and publicity of the housing projects. 3.[4] The defendant is the proprietor of the trademark “Lemon Tree Apartments” and has the exclusive rights to use thereof. 3.[5] The defendant‟s business and services are not similar to the business/services of the plaintiff. Whereas the plaintiff is carrying on the business of hotels and hospitality, the defendant is involved in housing projects. The plaintiff‟s business activities are covered in Class 42 whereas the defendant‟s business/activities are covered in Class 36. The customers/users of both the business and activities are different and different classes of consumers are the end users of the two services. 3.[6] There is no scope of the defendant passing off his goods and business as that of the plaintiff. 3.[7] The plaintiff is not holding any trademark registration for goods/services in Class 36 or 37 which cover the defendant‟s goods/services. 3.[8] The defendant‟s trademark has few add-ons by way of distinctive work due to which it is distinct from the plaintiff‟s trademark. 3.[9] The use of trademark “Lemon Tree” by the defendant does not amount to infringement under Sections 29(2)(a) and (b) of the Trade Marks Act, 1999 because the business and services of the plaintiff and the defendant are different and there is no likelihood of confusion on the part of the public.

3.10 The use of trademark “Lemon Tree” by the defendant would not amount to infringement under Section 29(4) of the Trade Marks Act, 1999 because the plaintiff has no reputation.

3.11 The plaintiff has pirated the trademark “Lemon Tree” from Lemon Tree Hotel in USA which is in business since the year 1998 as per the internet downloads filed by the defendant.

4. Learned counsel for the plaintiff in the rejoinder vehemently denied that the defendants honestly and bonafidely adopted the trade mark “Lemon Tree”. The plaintiff further denied that the defendant has invested heavily in promotion, advertisement and publicity as neither any material has been placed on record nor any particulars have been furnished by the defendant in this regard. The plaintiff is in the business of hotel industry since 2002 and has already invested more than `5,000 crores. The plaintiff has established the brand “Lemon Tree” in the market whereas the defendant adopted the said mark in 2009 with the sole intention of encashing the goodwill and reputation of the plaintiff. The defendant has no explanation as to why it changed its earlier name Vaishnavi Estates to “Lemon Tree” all of a sudden in 2009. Since the suit was filed immediately after the defendant entered into the market, no prejudice would be caused to the defendant if they are restrained from using the brand “Lemon Tree”. With respect to the defendant‟s plea that the plaintiff is a pirate because Lemon Tree Hotel was being run in the USA much prior to the alleged adoption of the mark by the plaintiff, the plaintiff submitted that the photocopy of the document downloaded from the internet by the defendant shows that Lemon Tree hotel in the U.S. was operated by two Australian families, who have been in the business of providing accommodation since 1998, from which it cannot be assumed that the Australian families are running hotel business under the trade mark “Lemon Tree” since 1998. It was further submitted that there was no material to show that the said mark used abroad enjoyed any reputation in India at any point of time when the plaintiff adopted the same and the use of the said mark abroad was to the knowledge of the plaintiff when the plaintiff adopted the mark in India.

5. Judgments relied upon by the plaintiff 5.[1] Ozone SPA Private Limited vs. Ozone Club, 2010 (42) PTC 469 (Del.) In this case, the plaintiff was the registered proprietor of the trademark „OZONE‟ in classes 16,30,32,33 and 42. The plaintiff was running a spa which falls in class 41 whereas the defendant was running fitness centre, health club and gymnastics. This Court held that the plaintiff‟s mark had acquired goodwill and reputation and, therefore, was covered under Section 29(4) of the Trade Marks Act for protection of the mark relating to dissimilar goods as the use of mark by the defendant would be of unfair advantage and detrimental to the mark of the plaintiff. The relevant finding of the Court are as under:-

“19. Now I shall deal with the contentions raised by the defendant. The first objection of the defendant is that the suit for infringement of the trade mark is not maintainable as the plaintiff has no registration in its favour in class 41 of the Schedule IV of the classification, thus, the plaintiff cannot invoke the jurisdiction under Section 134 of the Act. From the documents filed by the plaintiff it appears, prima facie, that the trade mark "Ozone" adopted and used by the plaintiff has acquired secondary meaning by virtue of long and continuous user. In support of the claim of goodwill and reputation, the plaintiff has furnished the statement of sale and promotional expenses as well as the documents to show that the mark "Ozone" has been continuously used and advertised in various modern media and the mark was adopted to distinguish with the services of the plaintiff. The plaintiff has filed the ample evidence on record to show their business activities and extensive advertisement and in view of that, there is no hesitation to come to the conclusion that the said name "Ozone" is known

mark in relation to the services provided by the plaintiff despite of the fact that the plaintiffs application for registration in class 41 of Schedule IV of the Classification in relation to health club and related services is pending for registration but at the same time it is an admitted fact that the plaintiff has got the registration in class 42 in relation to services such as medical, hygiene and beauty care etc.

20. As regards the suit for infringement is concerned, undisputedly the plaintiffs trade mark "Ozone" is registered in respect of the various goods in classes 16, 30, 32, 33 and particularly in class 42 in respect of goods including hygiene and beauty care services. Although, these are not same services but somehow they are connected with the services provided by the plaintiff under the mark "Ozone" the mark which has already acquired a residual goodwill and reputation, therefore, this Court is of the considered opinion that the present matter covers under the dicta of Section 29(4) of the Act where the protection of the mark is given to the dissimilar goods as use of the mark by the defendant would be unfair advantage of or is detrimental to the mark of the plaintiff, therefore, it is a well known trade mark within the meaning of Section 2(1)(zg) of the Act and have the present case covered under Section 29(4) of the Act.” (Emphasis Supplied) 5.[2] Rolex SA v. Alex Jewellery Pvt. Ltd., 2009 (6) R.A.J. 489 (Del.) The plaintiff was the proprietor of the well known registered trademark „ROLEX‟ in respect of watches in class 14. The defendant used the said mark in respect of artificial jewellery which was challenged by the plaintiff. This Court held as under:-

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“13. The counsel for the plaintiff had in opening submissions pitched her case primarily on Section 29(4) of the Act. Trademark, traditionally is with respect to particular class of goods - there could be infringement thereof only by use of similar or deceptively similar mark with respect to same class of goods. Section 29(4) is a major departure. Thereunder use of similar/deceptively similar mark in relation to goods which are not similar to those for which the trademark is registered has been included in the definition of infringement, if the condition of Section 29(4)(c) are met. 14. The trademark ROLEX has been registered in favour of the plaintiff with respect to watches etc since much prior to the user claimed by the defendants from 1995. If the plaintiff satisfies the test of Section 29(4)(c), the plaintiff even on the basis of its registrations other than with respect to jewellery, would be entitled to maintain an action of infringement against defendants with respect to jewellery. The only question to be determined at this

prima facie stage is whether the registered trademark ROLEX of the plaintiff, in relation to watches, has a reputation in India and the use of the mark by the defendants is without due cause and takes unfair advantage of and/or is detrimental to the distinctive character or repute of the registered trademark.

15. Section 2(z)(g) defines a well known trademark as the one which in relation to any goods, means a mark which has become so to the substantial segment of the public which uses such goods that the use of such mark in relation to other goods would be likely to be taken as indicating a connection in the course of trade between those goods and a person using the mark in relation to the first mentioned goods. In my view the segment of the public which uses the watches of the category/price range as the watches of the plaintiff, ROLEX is a well known trademark. The said segment of the public if comes across jewellery/artificial jewellery also bearing the trademark ROLEX is likely to believe that the said jewellery has a connection to the plaintiff.” 5.[3] Vardhman Properties Ltd. v. Vardhman Developers and Infrastructures, 166 (2010) DLT 782 The plaintiff, a real estate developer was the registered proprietor of the trademark VARDHAMAN GROUP whereas the defendant was involved in the business of booking flats and real estate consultancy. This Court restrained the defendant from using the mark VARDHMAN. The relevant portion of the said judgment are as under:-

“13. The concept of dilution had previously been evolved on a case-to- case basis by the Courts in India, as a result of which there was a kind of nebulousness and flexibility in its application. With the advent of Section 29, which articulates the right to registered trademark proprietor to sue for infringement, the statutory remedies are delineated with more clarity. Sections 29(1) to (3) of the Act, deal with infringement of trademarks, by the use of similar or identical marks (by the alleged infringer), in relation to same or similar goods or services. Significantly, Section 29(3) mandates the presumption ("shall") in relation to such class of infringement. However, infringement arises in relation to dissimilar goods or services only if certain essential ingredients are proved, i.e. (1) the senior mark being a registered; (2) the identity or close similarity of the junior mark with that of the registered proprietor's; (3) the existence of a distinctive reputation of the registered proprietor's mark's; (4) use of the mark by the junior mark or the infringer in relation to

dissimilar goods or services; (5) that such use being without due or reasonable cause; and (6) the use by the infringer causing detriment to the registered proprietor. …” 5.[4] Indian Shaving Products Ltd. v. Gift Pack, 1998 PTC (18) (Del.) – This Court rejected the argument raised by the defendant that the impugned mark was also being used by the some other person. The findings of this Court are as under:-

“52. It was next argued by the learned counsel for the defendant that the said trade mark Ultra is being used by several other persons/companies besides the defendants such as Toshiba, National and Sony. Thus the same has become publici Jurisdiction and the plaintiffs cannot claim any exclusive right therein. 53. Admittedly, the said parties are not before this Court. Neither the said parties are claiming any relief against the plaintiffs nor the plaintiffs are claiming any relief against them. Hence the said defense, that other persons are also using the said trade mark, is not available to the defendants. The Court is called upon to decide disputes in between the parties which are before it. The Court cannot be expected to

adjudicate upon a dispute which is not before it. A matter very much akin to the matter in hand came up before a single Judge of this Court. It was observed in Cool ways India Vs. Prince Air Conditioning and Refrigeration 1993 (1) Arbitration Law Reporter 401. The contention that a plaintiff himself is usurping or infringing the trade mark of a third party was not to be gone into by the Court while deciding the issue in between the parties. What is to be seen by the Court is as to whether the plaintiff has acquired good-will and reputation for his products. Moreover, the plaintiffs have placed on record a report on Urban Market for Batteries, October, 1997. A perusal of the same shows that Sony New Ultra was sold only one unit during the month of May,

1997. There is no sale in the month of June, July, August, September, 1997. Similarly, Sony has got no market share during the months of May, June, July, August and September, 1997. Thus the same is absolutely of no avail to the defendants. To the same effect is the view expressed by a learned Single Judge of this Court in Amrit Soap Company Vs. New Punjab Soap Factory 1989 (2) Arbitration Law Reporter 242. "The allegation that some other manufacturers are also using the same trade mark is of no consequence as the Court is concerned with parties before it only." 5.[5] Mahendra & Mahendra Paper Mills Ltd. v. Mahindra & Mahindra Ltd., 2002 (24) PTC 121 (SC) – The plaintiff was the proprietor of the trademark „MAHENDRA‟. The Supreme Court referred to the Bombay High Court case of Kirloskar Diesal Recon Pvt. Ltd vs. Kirloskar Property Ltd., AIR 1996 Bombay 149 which laid down the following test:- “22. …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. …” 5.[6] Roca Sanitario S.A. v. Naresh Kumar Gupta, MANU/DE/2040/2010 In this case, the plaintiff was the proprietor of trademark „ROCA‟ which was adopted by the defendant in respect of the same goods in India. The interim injunction was declined on the ground that the plaintiff was not able to prima facie show cross border reputation.

6. Judgments relied upon by the defendant The learned counsel for the defendant has referred to and relied upon ITC Ltd. vs. Philips Morris Products, 2010 (42) PTC 572 (Del.), Skol Breweries vs. Unisafe Technologies, 2010 (44) PTC 209 (Del.), Khoday Distilleries Ltd. vs. Scotch Whisky Association, 2008 (37) PTC 413 (SC), Kellog Company vs. Pravin Kumar Bhadabhai, 1996 PTC (16), Johnson & Johnson and Another vs. Christine Hoden (P) Ltd., 1988 PTC 39 and J.K. Oil Industries vs. Adani Wilmar Ltd., 2010 (42) PTC 639 (Del.).

7. Plaintiff’s response to the judgments cited by the defendant The learned counsel for the plaintiff has submitted that the aforesaid judgments cited by the defendant do not apply to the present case for the reasons given hereunder:- 7.[1] In ITC Ltd. vs. Philips Morris Products, 2010 (42) PTC 572 (Del.), the plaintiff‟s trade mark was a logo which resembles a „W‟, generally used with the words „WELCOME GROUP‟ whereas the defendant‟s trade mark was logo of „M‟ with the word mark „MARLBORO‟. This Court refused the injunction on the ground that the competing marks were entirely different and there was no chance of any confusion or deception. 7.[2] In Skol Breweries vs. Unisafe Technologies, 2010 (44) PTC 209 (Del.), the plaintiff was using the trade mark „KNOCKOUT‟ in respect of beer. The defendant started selling defence pepper spray under the trade mark „KNOCKOUT‟. The injunction was refused on the ground that the plaintiff had not placed any evidence on record to establish that the trademark „KNOCKOUT‟ had acquired distinctiveness to the extent that the consumers would be confused if they came across pepper spray with the trade mark „KNOCKOUT‟ and the nature of business of the parties was totally different and unrelated. 7.[3] Khoday Distilleries Ltd. vs. Scotch Whisky Association, 2008 (37) PTC 413 (SC) was a case of rectification/cancellation. The petitioners before the Supreme Court had adopted and registered the trade mark „PETER SCOT‟ in respect of whisky in 1968. The respondent [Scotch Whisky Association (Scotland)] came to know about the said registration in 1974 but they filed rectification petition in 1986. The rectification petition was dismissed by the Supreme Court broadly on the ground that there had been an unexplained delay of more than 18 years and the adoption of trade mark „PETER SCOT‟ was bona fide. 7.[4] In Kellog Company vs. Pravin Kumar Bhadabhai, 1996 PTC (16) (Del.), the plaintiff was the registered proprietor of trade mark “KELLOG‟S CORN FLAKE”. The defendant launched the corn flakes under the trade mark “AIMS ARISTO CORN FLAKE” prominently displayed on the boxes. However, the boxes carried some colour combination similar to the plaintiff‟s box. This Court has observed that since the marks are entirely different, there was no chance of any confusion or deception. 7.[5] In Johnson & Johnson and Another vs. Christine Hoden (P) Ltd., 1988 PTC 39 (Del.), the plaintiff‟s trade mark was „STAYFREE‟ in respect of sanitary napkins. The defendants started using the trade mark “COMFIT ALWAYS”. The main trade mark used by the defendants was “COMFIT ALWAYS” and the word “STAYFREE” was used in descriptive sense. This Court refused the injunction as the two marks were entirely different and there was no likelihood of confusion and deception on the part of the public. 7.[6] In J.K. Oil Industries vs. Adani Wilmar Ltd., 2010 (42) PTC 639 (Del), the plaintiff‟s trade mark was “OIL KINGS” in respect of oil. The defendant adopted the trade mark (label) “KING‟S” Label. The injunction was refused because the trademark “KING‟S” registered and in use by the defendant in various countries had worldwide reputation. This Court further noted the fact that the turnover of the defendant was more than `150 crores and they had been spending more than `5 crores annually on advertisement of their brand. 7.[7] The learned counsel for the plaintiff submitted that the aforesaid cases have been decided on peculiar facts and circumstances of each case. It is further submitted that the injunction was refused on the ground that the competing marks were entirely different and, therefore, there would be no confusion or deception among the public.

8. Undertaking of the defendant During the course of arguments on 24th February, 2011, learned counsel for the defendant submitted that the defendant has used the trade mark “Lemon Tree Apartments” only in respect of one housing project under construction at Hyderabad and the defendant has no other project in the offing, whereupon the defendant was directed to file an affidavit in this regard. Mr.T. Srinivas, Managing Director of the defendant, submitted an affidavit dated 23rd March, 2001 in which it was stated that 358 flats are being constructed in Lemon Tree Apartments, out of which construction of 125 flats was complete and the remaining flats were at various stages of construction and the defendant had already sold 105 flats. The defendant has placed on record copy of the development agreement dated 24th July, 2008 between the land owners and the three developers including the defendants. As per the said agreement, the defendant and two other developers, namely, M/s. Aakruti Construction and Deepthi Homes entered into an agreement with the four co-owners of the land for construction of multi-storyed building thereon. The developers have paid a sum of `50 lakhs to the land owners and have agreed to construct four blocks having built up area of 4 Lakh square feet. The land owners and developers have 50% share each in the built up property. The development agreement does not contain any clause for giving any name to the project or the apartments. The Managing Director of the defendant also appeared before this Court on 23rd March, 2011 and undertook to confine/restrict to use of trade mark “Lemon Tree Apartments” in respect of one project in hand and not to use the same for any other project.

9. Findings 9.[1] Prima Facie Case On careful consideration of the respective contentions of both the parties, this Court is of the prima facie view that the plaintiff has a strong prima facie case for grant of ad-interim injunction because:- 9.1.[1] The plaintiff is the registered proprietor of the trademark “Lemon Tree”. 9.1.[2] The plaintiff is in continuous use of the said trademark since October, 2002. 9.1.[3] The plaintiff has eleven operational hotels and eight hotels are under construction all over the country. 9.1.[4] The plaintiff has invested more than `5,000 crores in the hotel business. 9.1.[5] The plaintiff has prima facie reputation in respect of the said trademark on the basis of the aforesaid facts, annual revenues and the expenses on advertisements. 9.1.[6] The defendant adopted the identical trade mark “Lemon Tree” without any justification in year 2009 in respect of its project at a distance of 2 kilometers from the plaintiff‟s hotel which came into existence in 2008. The adoption of the plaintiff‟s trade mark “Lemon Tree” by the defendant appears to be dishonest with the sole intention to encash the goodwill and reputation of the plaintiff. 9.1.[7] The defendant‟s claim that the mark “Lemon Tree” has become distinctive of their business and they have invested huge amount and have given vide publicity is misconceived in as much as the plaintiff instituted this suit in 2009 itself immediately after becoming aware of the defendant‟s use. The defendant has also not placed on record any material to substantiate its claim. The entire defense of the defendant appears to be frivolous. 9.1.[8] The defendant‟s mark “Lemon Tree Apartments” is identical to the registered trade mark of the plaintiff; the services of the plaintiff and the defendant are similar (the plaintiff is in hotel business whereas the defendant is in the business of construction); it is likely to cause confusion to the public that the defendant‟s “Lemon Tree Apartments” have an association with the plaintiff and, therefore, the plaintiff is entitled to protection under Section 29(2) and (3) of the Trade Marks Act. 9.1.9. Even if the services of the plaintiff and the defendant are taken to be not similar as contended by the defendant, the plaintiff is entitled to protection under Section 29(4) of the Trade Marks Act as the plaintiff has reputation in India; use of the infringing mark by the defendant is without any justification; the defendant has taken unfair advantage and it is detrimental to the distinctive character as well as the repute of the plaintiff‟s registered trade mark. 9.1.10 With respect to the plea that there is a Lemon Tree Hotel in USA, the defendant has not been able to show cross border reputation of the said hotel in India. 9.[2] Balance of convenience 9.2.[1] The balance of convenience lies in favour of the plaintiff and against the defendant as the plaintiff is the registered proprietor of the trademark “Lemon Tree” and is in continuous use since October, 2002 with eleven operational hotels and eight hotels under construction all over the country with an investment of more than `5,000 crores. 9.2.[2] On the other hand, the defendant who had been carrying on its construction business in the name of Vaishnavi Estates (P) Ltd since 1997, adopted the plaintiff‟s trademark “Lemon Tree” without any justification in 2009 with the full knowledge of the plaintiff‟s hotel in Hyderabad at a distance of about 2 kms from the plaintiff‟s project and the plaintiff immediately filed the present suit. 9.2.[3] The defendant is using the plaintiff‟s registered trade mark “Lemon Tree” in respect of one project. 9.2.[4] The defendant has given an undertaking to this Court on 23rd March, 2011 not to use the said trademark for any other project. Even one project in respect of which the defendant is using the trademark “Lemon Tree” is a joint venture agreement in respect of which the defendant has already sold more than 105 flats. 9.2.[5] It is not disputed that the defendant has only limited interest in the project till the sale of the flats. 9.2.[6] The defendant cannot ride on the plaintiff‟s goodwill and reputation to sell the remaining flats. 9.[3] Irreparable loss and injury The plaintiff would suffer irreparable loss and injury in case the defendant is not restrained from using the plaintiff‟s registered trademark. If the defendant is not restrained from using the plaintiff‟s registered trademark “Lemon Tree”, it would also dilute the plaintiff‟s trademark and would also cause confusion to the public, who would associate the defendant‟s project with the plaintiff. 9.[4] Relevant judgments This case is squarely covered by the principles laid down in Ozone SPA Private Limited (supra), Rolex SA (supra), Vardhman Properties Ltd. (supra), Indian Shaving Project Limited (supra) and Mahendra & Mahendra Paper Mills Ltd. (supra). With respect to the judgments cited by the defendant, this Court accepts the submissions of the plaintiff recorded in para 7 above.

10. Conduct of the defendant

10.1. In Dalip Singh v. State of U.P., (2010) 2 SCC 114, the Supreme Court noted as under:- “1. For many centuries, Indian society cherished two basic values of life i.e. „Satya' (truth) and „Ahimsa' (nonviolence). Mahavir, Gautam Buddha and Mahatma Gandhi guided the people to ingrain these values in their daily life. Truth constituted an integral part of the justice-delivery system which was in vogue in pre-Independence era and the people used to feel proud to tell truth in the courts irrespective of the consequences. However, post- Independence period has seen drastic changes in our value system. The materialism has over-shadowed the old ethos and the quest for personal gain has become so intense that those involved in litigation do not hesitate to take shelter of falsehood, misrepresentation and suppression of facts in the court proceedings. In the last 40 years, a new creed of litigants has cropped up. Those who belong to this creed do not have any respect for truth. They shamelessly resort to falsehood and unethical means for achieving their goals. In order to meet the challenge posed by this new creed of litigants, the courts have, from time to time, evolved new rules and it is now well established that a litigant, who attempts to pollute the stream of justice or who touches the pure fountain of justice with tainted hands, is not entitled to any relief, interim or final.”

10.2. In Padmawati and Ors. v. Harijan Sewak Sangh, 154 (2008) DLT 411, this Court noted as under:

“6. The case at hand shows that frivolous defences and frivolous litigation is a calculated venture involving no risks situation.

You have only to engage professionals to prolong the litigation so as to deprive the rights of a person and enjoy the fruits of illegalities. I consider that in such cases where Court finds that using the Courts as a tool, a litigant has perpetuated illegalities or has perpetuated an illegal possession, the Court must impose costs on such litigants which should be equal to the benefits derived by the litigant and harm and deprivation suffered by the rightful person so as to check the frivolous litigation and prevent the people from reaping a rich harvest of illegal acts through the Courts. One of the aim of every judicial system has to be to discourage unjust enrichment using Courts as a tool. The costs imposed by the Courts must in all cases should be the real costs equal to deprivation suffered by the rightful person.” xxxxxx

“9. Before parting with this case, I consider it necessary to pen down that one of the reasons for over-flowing of court dockets is the frivolous litigation in which the Courts are engaged by the litigants and which is dragged as long as possible. Even if these litigants ultimately loose the lis, they become the real victors and have the last laugh. This class of people who perpetuate illegal acts by obtaining stays and injunctions from the Courts must be made to pay the sufferer not only the entire illegal gains made by them as costs to the person deprived of his right and also must be burdened with exemplary costs. Faith of people in judiciary can only be sustained if the persons on the right side of the law do not feel that even if they keep

fighting for justice in the Court and ultimately win, they would turn out to be a fool since winning a case after 20 or 30 years would make wrong doer as real gainer, who had reaped the benefits for all those years. Thus, it becomes the duty of the Courts to see that such wrong doers are discouraged at every step and even if they succeed in prolonging the litigation due to their money power, ultimately they must suffer the costs of all these years long litigation. Despite settled legal positions, the obvious wrong doers, use one after another tier of judicial review mechanism as a gamble, knowing fully well that dice is always loaded in their favour, since even if they lose, the time gained is the real gain. This situation must be redeemed by the Courts.” (Emphasis supplied) This Court imposed costs of `15.[1] lakhs in the above case against which Special Leave to Appeal (Civil) No 29197/2008 was preferred to the Supreme Court. On 19th March, 2010, the Supreme Court passed the following order: “We have heard learned Counsel appearing for the parties. We find no ground to interfere with the wellconsidered judgment passed by the High Court. The Special Leave Petition is, accordingly, dismissed.” 10.[3] I agree with the findings by the learned Judge in Padmawati's case (supra) and wish to add a few words. There is another feature which has been observed and it is of unscrupulous persons filing false claims or defences with a view that the other person would get tired and would then agree to compromise with him by giving up some right or paying some money. If the other party is not able to continue contesting the case or the Court by reason of falsehood falls into an error, the wrong succeeds. Many times, the other party compromises, or at other times, he may continue to fight it out. But as far as the party in the wrong is concerned, as this Court noted in Padmawati's case (supra), even if these litigants ultimately lose the lis, they become the real victors and have the last laugh. 10.[4] In the present case, the conduct of the defendant does not appear to be honest. The defendant has raised a frivolous defence with the hope that the defendant can, with the Court delays, drag the case for years and the other side would succumb to buy peace. If the other side does not so settle in the end, they are hardly compensated and remains a loser.

11. Imposition of Costs In the recent judgment dated 4th July, 2011 in the case of Ramrameshwari Devi v. Nirmala Devi, MANU/SC/0714/2011, the Supreme Court has held that the Courts have to take into consideration pragmatic realities and have to be realistic in imposing the costs. The relevant paragraphs of the said judgment are reproduced hereunder:-

“45. …We are clearly of the view that

unless we ensure that wrongdoers are denied

profit or undue benefit from the frivolous

litigation, it would be difficult to control

frivolous and uncalled for litigations. In order

to curb uncalled for and frivolous litigation,

the courts have to ensure that there is no

incentive or motive for uncalled for litigation.

It is a matter of common experience that

court's otherwise scarce and valuable time is

consumed or more appropriately wasted in a

large number of uncalled for cases.”

“52. The main question which arises for our

consideration is whether the prevailing delay

in civil litigation can be curbed? In our

considered opinion the existing system can be

drastically changed or improved if the

following steps are taken by the trial courts

while dealing with the civil trials.

A. Pleadings are foundation of the claims of parties. Civil litigation is largely based on

documents. It is the bounden duty and obligation of the trial judge to carefully scrutinize, check and verify the pleadings and the documents filed by the parties. This must be done immediately after civil suits are filed.

B. The Court should resort to discovery and production of documents and interrogatories at the earliest according to the object of the Act. If this exercise is carefully carried out, it would focus the controversies involved in the case and help the court in arriving at truth of the matter and doing substantial justice.

C. Imposition of actual, realistic or proper costs and or ordering prosecution would go a long way in controlling the tendency of introducing false pleadings and forged and fabricated documents by the litigants. Imposition of heavy costs would also control unnecessary adjournments by the parties. In appropriate cases the courts may consider ordering prosecution otherwise it may not be possible to maintain purity and sanctity of judicial proceedings.

D. The Court must adopt realistic and pragmatic approach in granting mesne profits. The Court must carefully keep in view the ground realities while granting mesne profits.

E. The courts should be extremely careful and cautious in granting ex-parte ad interim injunctions or stay orders. Ordinarily short notice should be issued to the Defendants or Respondents and only after hearing concerned parties appropriate orders should be passed.

F. Litigants who obtained ex-parte ad interim injunction on the strength of false pleadings and forged documents should be adequately punished. No one should be allowed to abuse the process of the court.

G. The principle of restitution be fully applied in a pragmatic manner in order to do real and substantial justice.

H. Every case emanates from a human or a commercial problem and the Court must make serious endeavour to resolve the problem within the framework of law and in accordance with the well settled principles of law and justice.

I. If in a given case, ex parte injunction is granted, then the said application for grant of injunction should be disposed of on merits, after hearing both sides as expeditiously as may be possible on a priority basis and undue adjournments should be avoided.

J. At the time of filing of the plaint, the trial court should prepare complete schedule and fix dates for all the stages of the suit, right from filing of the written statement till pronouncement of judgment and the courts should strictly adhere to the said dates and the said time table as far as possible. If any interlocutory application is filed then the same be disposed of in between the said dates of hearings fixed in the said suit itself so that the date fixed for the main suit may not be disturbed.

53. According to us, these aforementioned steps may help the courts to drastically improve the existing system of administration of civil litigation in our Courts. No doubt, it would take some time for the courts, litigants and the advocates to follow the aforesaid steps, but once it is observed across the country, then prevailing system of adjudication of civil courts is bound to improve.

54. While imposing costs we have to take into consideration pragmatic realities and be realistic what the Defendants or the Respondents had to actually incur in contesting the litigation before different courts. We have to also broadly take into consideration the prevalent fee structure of the lawyers and other miscellaneous expenses which have to be incurred towards drafting and filing of the counter affidavit, miscellaneous charges towards typing, photocopying, court fee etc.

55. The other factor which should not be forgotten while imposing costs is for how long the Defendants or Respondents were compelled to contest and defend the litigation in various courts. The Appellants in the instant case have harassed the Respondents to the hilt for four decades in a totally frivolous and dishonest litigation in various courts. The Appellants have also wasted judicial time of the various courts for the last 40 years.

56. On consideration of totality of the facts and circumstances of this case, we do not find any infirmity in the well reasoned impugned order/judgment. These appeals are consequently dismissed with costs, which we quantify as `2,00,000/- (Rupees Two Lakhs only). We are imposing the costs not out of anguish but by following the fundamental principle that wrongdoers should not get benefit out of frivolous litigation.” (Emphasis supplied) This case is squarely covered by the aforesaid judgment and warrants imposition of realistic costs on the defendant.

12. Conclusion 12.[1] In the facts and circumstances of this case, the application is allowed and the defendant, their collaborators, agents, dealers and representatives are restrained from using the plaintiff‟s registered trademark “Lemon Tree” or any other mark identical with/or deceptively similar to the plaintiff‟s trade mark “Lemon Tree” as a trade mark, trade name or trading style or in any other manner till the disposal of this suit. 12.[2] Following the judgment of the Supreme Court in Ramrameshwari Devi (supra) and considering that the defendant raised a totally frivolous and dishonest defence and the hearing of the injunction application continued for seven hearings, this Court considers the cost of `2,00,000/- to be realistic. The cost of `2,00,000/- is, therefore, imposed on the defendant to be paid to the plaintiff within four weeks. 12.[3] In the interest of justice, equity and fairplay, the defendant is granted two months time to change its name in terms of this order and to remove the signboards, brochures, etc. subject to the payment of cost as aforesaid to the plaintiff within four weeks. 12.[4] The observations made hereinabove are prima facie and shall not constitute any expression of final opinion on the issues involved and shall have no bearing on the merits of the case. 12.[5] List before the Regular Bench as per Roster on 5th August, 2011. J.R. MIDHA, J. AUGUST 01, 2011

M/S KRIZM HOTELS PRIVATE LIMITED v. M/S VAISHNAVI ESTATES(P) LTD

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