Dharampal Satyapal Limited v. Mr Basant Kumar Makhija & Ors.

IX. That the Plaintiff has filed a Suit which is titled as Suit for

Permanent Injunction restraining Infringement of Copyright and Trade Mark, Passing off, trade dress. Rendition of Accounts etc. The Suit for infringement of trade mark is barred by virtue of provisions of Section 28 (3) of the Trade Mark Act, 1999. Section 28(3) provides:

124. Stay of proceedings where the validity of registration of the trade mark is questioned, etc. – ***** (2) If the party concerned proves to the court that he has made any such application as is referred to in clause (b)(ii) of sub-section (1) within the time specified therein or within such extended time as the court may for sufficient cause allow, the trial of the suit shall stand stayed until the final disposal of the rectification proceedings.

The Defendant Nos. 1 and 2 are the Registered Proprietors of trade mark/label KARAMCHAND under No.2953829 in class 31, under No. 3061664 in class 31 and under No. 2386262 in class 31. The registrations are valid and subsisting in favour of the Defendant Nos.[1] and 2. Thus, the Suit for infringement is barred under Section 28(3) of the Trade Marks Act, 1999. (Emphasis supplied) 6.[2] Inasmuch as the defendants have raised the plea of registration of the impugned mark “ ” as a defence to the plaintiff’s plea for remedy against infringement, it is clear that a Section 30(2)(e) defence has been raised by the defendants. Indeed, this aspect was not disputed even by Mr. Bakhru, learned Counsel for the defendants.

7. Raising of plea of invalidity by plaintiff 7.[1] Mr. Anand, learned Counsel for the plaintiff submits that the plea of invalidity of the “ ” mark of the defendant has been taken by the plaintiff in paras 29, 31, 32, 41 and 42 of the plaint and in paras 12 to 17 of the replication. These paragraphs read thus: Paras 29, 31, 32, 41 and 42 of the plaint

1) A distinctive metallic blue background colour with a vignette effect on the upper and lower edges of the pouch.

2) A map of the world appearing across the face of the pouch.

3) A two letter monogram prominently placed in red colour on a golden coloured device, super imposed on the map of India.

4) The word 'premium' appearing in an oblong device having a golden border like Flavoured Pan masala.

5) In super-imposing relationship with the aforesaid device is a larger windshield type device having the Plaintiff's brand 'Rajnigandha' appear in a bold red font with a white ghost outline and a frosted appearance in a substantial portion of the said windshield device.

6) Tag lines written on the bottom of the pouch in white colour.

7) On the reverse side of the main face of the aforesaid pouch, there is a silver rectangular portion with descriptive matter as covered under The Legal Metrology Act, 2009. *****

41. As stated earlier, the Plaintiff is also the prior user of the packaging of the products sold under the mark RAJNIGANDHA. The Defendants (the admitted subsequent users of the packaging) have deliberately adopted a deceptively similar trade style, getup, color-scheme and layout in order to induce consumers into purchasing the Defendants' pan masala products, under the mistaken belief that they are actually the Plaintiffs famous pan masala sold under the trademark RAJNIGANDHA. Being in the trade of pan masala products, the Defendants ought to have been aware of the Plaintiffs' highly reputed products under the mark RAJNIGANDHA and their constituent tradedress. Therefore, the Defendants' action of adopting a nearly identical packaging and trade-dress evidences their mala fide intention of riding upon the goodwill and reputation of the Plaintiffs' products.

42. The Defendants are benefitting from the confusion caused in the minds of consumers regarding the source of their pan masala products under the deceptively similar manner of use by the Defendants for their pan masala products KARAMCHAND. This is because purchases made of the Defendants' products are the result of a mistaken impression that they emanate from the Plaintiff. Furthermore, the present case is one of triple identity, since the Defendant is making use of: i) A deceptively similar trade dress as employed by the Plaintiff s in relation to its RAJNIGANDHA pan masala product and associated manner of use; ii) The Defendants' have adopted the said packaging style in relation to the same product as that of the Plaintiff, with regard to the pan masala products as that of the Plaintiff; iii) The products of the Plaintiff and the Defendants are sold vide same trading channels including retail outlets, grocery stores and street vendors;” Paras 12 to 17 of replication

1. Pleading. – “Pleading” shall mean plaint or written statement. 298 (2023) DLT 101: (2023) 93 PTC 425 7.[3] Mr. Bakhru has also cited the decision of R.C. Lahoti, J, as he then was, sitting singly in this Court in Anant Construction (P) Ltd. v. Ram Niwas[7], specifically para 24, which reads as under:

7.10 Mr. Bakhru does not dispute that there is a specific challenge to the validity of the defendants’ trademark raised in paras 12 to 17 of the replication. His contention is, however, that, even if it were to be assumed that the occasion for the plaintiff to challenge the validity of the defendant’s mark would arise consequent on the defendant raising a Section 30(2)(e) defence, the plaintiff would have to do so by amending the plaint, and not in replication.

7.11 The submission, in my view, is too hypertechnical to commend acceptance. Besides, a replication is, by its very nature, intended to meet the assertions in the written statement. It would, therefore, be paradoxical to hold that, even though the Section 30(2)(e) defence is raised in the written statement, the plaintiff is foreclosed from meeting it in replication by challenging the validity of the defendant’s mark, and has to amend the plaint itself.

7.12 This position is also supported by the opening words in para 24 of Anant Construction, which note that a “replication is a pleading by plaintiff in answer to defendant’s plea”. Having himself relied on Anant Construction, Mr Bakhru cannot be heard, simultaneously, to contend that either that a replication is not a “pleading”, or that the answer to the Section 30(2)(e) defence, taken by the defendant in the written statement, cannot be taken by the plaintiff in replication, and that the plaintiff would, instead, have to amend the plaint itself.

7.13 Travellers Exchange does not state, anywhere, that a plea of invalidity of the defendant’s trademark cannot be taken in a replication. What is said in para 7 is with respect to an earlier order dated 31 January 2019 passed by this Court in the said case in which, as per para 7 of the judgment dated 20 October 2022, this Court was of the view that the plea of invalidity is required to be pleaded in the plaint. Mr. Bakhru, however, fairly submits that there is actually no earlier order in the case which so opines, and that the order dated 31 January 2019 was merely an order seeking liberty to raise the plea of invalidity in the plaint. No statement of law, to the effect that the plea of invalidity of the defendant’s trade mark, consequent on the defendant raising a Section 30(2)(e) defence in the written statement, must necessarily be taken by amending the plaint, and cannot be taken in the replication can, therefore, be said to have been enunciated in Travellers Exchange.

7.14 Insofar as paras 29, 31, 32, 41 and 42 of the plaint are concerned, even if no specific submission to the effect that the defendant’s mark is invalid has been taken, the ingredients which are required to be pleaded in order for the plaintiff to succeed in a plea of invalidity under Section 11 are all contained in the said passages. Para 29 pleads that the defendants’ mark is deceptively similar to the plaintiff’s marks [which were registered much prior in point of time and are, therefore, “earlier trademarks” within the meaning of Section 11(4)]. Para 31 pleads that the plaintiff’s mark is well-known. Para 32 pleads that there is a likelihood of confusion if both the marks are allowed to prevail or co-exist. In the face of these pleadings as contained in the plaint, seen in conjunction with the fact that in reply to the defendants’ Section 30(2)(e) defence in the written statement, a specific challenge to the validity of the defendants’ trademark was taken in the replication, I am unable to concur with Mr. Bakhru in his submission that no plea of invalidity of registration of the defendants’ trademark was taken by the plaintiff.

7.15 Even otherwise, the word “pleading” does not figure anywhere in Section 124(1). The word that is used is “pleads”. When understanding the scope and ambit of the expression “pleads” in Section 124(1), especially keeping in mind the sequence envisaged by Section 124(1)(b), I am of the opinion that the word “pleads” cannot be restrictively read as the verb equivalent of the noun “pleading” as defined in Order VI Rule 1 of the CPC.

7.16 The word “plead” has, in fact, various connotations in law, not restricted stricto sensu to the verb equivalent of “pleading” as defined in Order VI Rule 1. Article 220 of the Constitution of India, for example, reads “No person who, after the commencement of this Constitution, has held office as a permanent Judge of a High Court shall plead or act in any court or before any authority in India except the Supreme Court and the other High Courts”, and, in this context, the High Court of Calcutta has, in J.P. Mitter v. H.K. Bose[8], held that “ ‘plead’ means to address the Court as an Advocate on behalf of either party”. P. Ramanatha Aiyar’s classic Advanced Law Lexicon (5th Edition), in fact, defines “plead” as “address Court as advocate or party; maintain a cause in Court; allege as a plea in proceedings in Court”.

7.17 The word “plead”, in grammar, is the verb equivalent both of “plea” and “pleading”. In law, it could be one or the other, depending on the context in which it is used. As used in Section 124(1)(b), “plead”, in my view, is etymologically closer to the noun “plea” rather than the noun “pleading”. In a manner of speaking, “plead” may be regarded as the verb equivalent, not of “pleading”, but of “plea”, as used in Section 124(1)(b).

7.18 For all the aforesaid reasons, I am of the opinion that, in the present case, the plaintiff has pleaded invalidity of the defendants’ trademark within the meaning of Section AIR 1963 Cal 178 124(1)(b).

8. The aspect of prima facie tenability 8.[2] One the requirements of the defendants having raised a Section 30(2)(e) defence and the plaintiff having pleaded invalidity of the defendants’ trademark, as contemplated by Section 124(1)(b), stand satisfied, the Court is required to examine whether the plea regarding the invalidity of the registration of the defendants’ trademark, as taken by the plaintiff, is prima facie tenable. 8.[3] There was some amount of discussion on this aspect as well, specifically on the scope and ambit of the expression “prima facie tenable”. I have had an occasion to cogitate on this issue and have expressed my view thereon in paras 64 to 77 of the decision in Pepsico Inc. v. Parle Agro Pvt. Ltd.[9] which read thus:

66. Thus, it does appear that, in its pleadings in the plaint, PepsiCo has sought to relate the tagline “For The Bold” with the flavour of the tortilla chips in respect of which the said tagline is used and to attribute a purpose to the said tagline. What has to be seen is whether, in the backdrop of these rival assertions, as contained in the written statement of Parle and in the plaint of PepsiCo, the challenge, by Parle, to the validity of PepsiCo's “For The Bold” trade mark is, or is not, tenable.

67. “Tenable” is not an adjective which one customarily encounters in statutory instruments. Indeed, it is an expression which is gloriously uncertain in its import and, ordinarily, should not even form part of a provision in a statute, especially one which seriously impacts commercial rights of parties. Nonetheless, it is there and, therefore, the Court has to live with it.

68. In the context of Section 87(1)(a) of the Trade and Merchandise Act, 1958 - which, though it deals with criminal prosecution, also envisages satisfaction, by the Magistrate, regarding the “tenability” of the challenge to the validity of a trade mark - P. Ramanatha Aiyar, in his classic Advance Law Lexicon, defines “tenable” as “capable of being retained, kept or defended”. That, really, is the only definition of “tenable” that I have come across, in any law lexicon. Black, Jowitt and Stroud are all silent on it.

69. The scope and import of the expression “tenable” as employed in Section 124(1)(a)(ii) can perhaps be better appreciated if one examines the consequences of a finding, by the court, under the said provision, that the plea of invalidity of the plaintiff's trade mark, as raised by the defendant, is “prima facie tenable”. The use of the expression “prima facie” is also, in this connection, of no little significance. The Court, while exercising its subjective satisfaction in terms of Section 124(1)(a)(ii) is, therefore, only required to satisfy itself regarding the “prima facie tenability” of the challenge, by the defendant, to the plaintiff's trade mark - or vice-versa. It has to be remembered that, if the court finds the challenge to be prima facie tenable, the court only proceeds to frame an issue and adjourn the proceedings to enable the defendant - or the plaintiff, as the case may be - to prefer a rectification proceeding. The actual issue of whether, in fact, the validity of the mark is, or is not, meritorious, is within the exclusive province of the authority which is in seisin of the rectification proceeding, once it is filed.

70. An exhaustive discussion of this aspect of the matter is contained in the judgment of the Supreme Court in Patel Field Marshal Agencies v. P.M. Diesels Ltd.10. The respondent P.M. Diesels Ltd. (“PMD” hereinafter) was the registered owner of three trade marks, to all of which “Field Marshal” was common. They were registered in 1964 and 1968. The appellant Patel Field Marshal Agencies (“PFM” hereinafter) applied for registration of the trade mark “Marshal”. PMD instituted Suit No. 1612/1989 before this Court, alleging that the use of “Marshal” by PFM infringed PMD's registered “Field Marshal” trade mark. An injunction against use, by PFM, of the mark “Marshal” was, therefore, sought. PFM, in response, questioned the validity of the registration of the mark “Field Marshal” in favour of PMD. This Court framed an issue to the said effect in the suit. An application for interlocutory injunction, preferred by PMD, was allowed by a learned Single Judge of this Court. However, by a subsequent order, the learned Single Judge opined that this Court did not possess the territorial jurisdiction to adjudicate the suit and, therefore, returned the plaint or presentation before the competent court in Gujarat. The plaint was thereafter filed before the learned Additional District Judge (ADJ), Rajkot, as Civil Suit 1/2009. The controversy arose in the context of the Trade and Merchandise Marks Act, 1958 (“the TMA 1958”).

71. During the pendency of the suit before this Court, PFM 28(2018) 2 SCC 112 initiated rectification proceedings before the High Court of Gujarat, challenging the registration of the “Field Marshal” trade marks in favour of PMD. The rectification applications were dismissed by a learned Single Judge, whose decision was upheld in appeal by the Division Bench. PFM appealed to the Supreme Court.

72. In these circumstances, the Supreme Court framed the following issue as arising for consideration before it, in para 9 of the report: “In a situation where a suit for infringement is pending wherein the issue of validity of the registration of the trade mark in question has been raised either by the plaintiff or the defendant and no issue on the said question of validity has been framed in the suit or if framed has not been pursued by the party concerned in the suit by filing an application to the High Court for rectification under Section 111 read with Section 107 of the Trade and Merchandise Marks Act, 1958, whether recourse to the remedy of rectification under Sections 46/56 of the 1958 Act would still be available to contest the validity of the registration of the trade mark.”

73. Broken up into its constituents, the issue as framed by the Supreme Court was this. The plaintiff files a suit for infringement. The defendant, in response, questions the validity of the trade mark that the plaintiff seeks to assert. The Court does not frame any issue regarding validity of the plaintiff's trade mark. Else, the Court does frame an issue, but the defendant fails to proceed and filed a rectification application under Section 111 of the TMA

1958. Can the defendant file a rectification petition under Section 46 or Section 56 of the TMA 1958?

74. The following paragraphs from the judgment provide the answer:

30. Following well-accepted principles of interpretation of statutes, which would hardly require a reiteration, the heading of Section 111 of the 1958 Act i.e. “Stay of proceedings where the validity of registration of the trade mark is questioned, etc.”, cannot be understood to be determinative of the true purport, intent and effect of the provisions contained therein so as to understand the said section to be contemplating only stay of proceedings of the suit where validity of the registration of the trade mark is questioned. Naturally, the whole of the provisions of the section will have to be read and so read the same would clearly show lack of any legislative intent to limit/confine the operation of the section to what its title may convey.

31. Rather, from the résumé of the provisions of the 1958 Act made above, it becomes clear that all questions with regard to the validity of a trade mark is required to be decided by the Registrar or the High Court under the 1958 Act or by the Registrar or the IPAB under the 1999 Act and not by the civil court. The civil court, in fact, is not empowered by the Act to decide the said question. Furthermore, the Act mandates that the decisions rendered by the prescribed statutory authority [Registrar/High Court (now IPAB)] will bind the civil court. At the same time, the Act (both old and new) goes on to provide a different procedure to govern the exercise of the same jurisdiction in two different situations. In a case where the issue of invalidity is raised or arises independent of a suit, the prescribed statutory authority will be the sole authority to deal with the matter. However, in a situation where a suit is pending (whether instituted before or after the filing of a rectification application) the exercise of jurisdiction by the prescribed statutory authority is contingent on a finding of the civil court as regards the prima facie tenability of the plea of invalidity.

32. Conversely, in a situation where the civil court does not find a triable issue on the plea of invalidity the remedy of an aggrieved party would not be to move under Sections 46/56 of the 1958 Act but to challenge the order of the civil court in appeal. This would be necessary to avoid multiple proceedings on the same issue and resultant conflict of decisions.

33. The 1958 Act clearly visualises that though in both situations i.e. where no suit for infringement is pending at the time of filing of the application for rectification or such a suit has come to be instituted subsequent to the application for rectification, it is the to determine the question of invalidity, the procedure contemplated by the statute to govern the exercise of jurisdiction to rectify is, however, different in the two situations enumerated. Such difference has already been noted.

34. The intention of the legislature is clear. All issues relating to and connected with the validity of registration has to be dealt with by the Tribunal and not by the civil court. In cases where the parties have not approached the civil court, Sections 46 and 56 provide an independent statutory right to an aggrieved party to seek rectification of a trade mark. However, in the event the civil court is approached, inter alia, raising the issue of invalidity of the trade mark such plea will be decided not by the civil court but by the Tribunal under the 1958 Act. The Tribunal will however come into seisin of the matter only if the civil court is satisfied that an issue with regard to invalidity ought to be framed in the suit. Once an issue to the said effect is framed, the matter will have to go to the Tribunal and the decision of the Tribunal will thereafter bind the civil court. If despite the order of the civil court the parties do not approach the Tribunal for rectification, the plea with regard to rectification will no longer survive.”

75. Patel Field Marshal Agencies, therefore, clarifies that the challenge to the validity of the plaintiff's mark, though raised by the defendant in the suit of the plaintiff, is to be decided, not by the Court hearing the suit (hereinafter “the suit Court”), but by the authority which the defendant would proceed to move for rectification. At the time when Patel Field Marshal Agencies was rendered, the authority before whom the rectification petition could be maintained was the Intellectual Property Appellate Tribunal (IPAB). The task of the suit Court, whether under Section 111(1)(ii) of the TMA 1958 or the corresponding Section 124(1)(a)(ii) of the present Trade Marks Act, is only to pronounce on the prima facie tenability of the challenge, by the defendant, to the validity of the plaintiff's trade mark. Once the suit Court finds the challenge to be tenable and frames in issue in that regard, the challenger-defendant would have to move the IPAB for rectification, and it was the IPAB alone which could decide on the aspect of rectification and, therefore, on the validity of the plaintiff's trade mark, one way or the other.

76. It goes without saying, therefore, that the IPAB, on whom the Supreme Court conferred exclusive jurisdiction in this regard, could not be trammelled in any manner in exercising the said jurisdiction. The court, while holding [under Section 111(1)(ii) of the TMA 1958 or the corresponding Section 124(1)(a)(ii) of the present Trade Marks Act] that the challenge, by the defendant, to the validity of the plaintiff's trade mark was prima facie tenable would not, therefore, be entitled to make any such observation on the merits of the said challenge, as would bind, or even influence, the IPAB in adjudicating the rectification proceeding. As such, the findings of the court under Section 124(1)(a)(ii) regarding the tenability of the challenge, whether by the plaintiff or by the defendant, to the mark of the opposite party, has to be strictly prima facie, and nothing more. The suit Court can, under Section 124(1)(a)(ii), therefore, only pronounce on the issue of whether the challenge is arguable or not. Any observation beyond this is bound to influence the authority which subsequently has to adjudicate on the rectification petition and which is the only authority - as per Patel Field Marshal Agencies - which can pronounce on the challenge to validity.

77. “Prima facie tenability”, within the meaning of Section 124(1)(ii) of the Trade Marks Act, therefore, would imply only a prima facie view that the challenge to the validity of the mark of the opposite party, as raised in the plaint or in the written statement, is a challenge worth consideration. It cannot amount, in any manner of speaking, to an expression of opinion, even tentative or perfunctory, regarding the merits of the said challenge.” (Emphasis supplied) 8.[4] In my considered opinion, the word “tenable” as used in Section 124(1)(ii) cannot be accorded too rigid an interpretation. In Patel Field Marshal Agencies, the Supreme Court has clearly held that the task of examining the merits, or otherwise, of the plea of invalidity, whether raised by the plaintiff or the defendant, is on the Court or authority which would deal with the rectification proceedings. At the time when Patel Field Marshal Agencies was rendered, that authority was the IPAB. The statute has not been amended in any way even after the IPAB was abolished. Even while replacing the words “the Board” in Section 124(1) of the Trade Marks Act with “the High Court”, the various clauses of the provision have been allowed to remain in status quo ante. 8.[5] Patel Field Marshal Agencies clearly requires the task of examining the merits of the plea of invalidity of the mark to be entirely discharged by the authority hearing the rectification. The suit Court, even while holding the challenge to validity to be prima facie tenable and, consequently, adjourning the matter, is not, as per Patel Field Marshal Agencies, to enter into the merits of the plea. If the Court were, therefore, to return a finding, even tentative, on the merits of the plea of invalidity, it is bound to influence the authority which would deal with the rectification. At the time when Patel Field Marshal Agencies was rendered, that authority was the IPAB. Mr. Bakhru’s contention is that the aspect of prima facie tenability would require the Court to return a finding of possibility of success by the plaintiff in its challenge to validity of the defendant’s mark. If that submission were to be accepted, it would fly in the teeth of the law enunciated in Patel Field Marshal Agencies, as if the suit Court were to return any finding of possible chance of success in the challenge to invalidity, it would be bound to influence the IPAB which would subsequently hear the rectification petition. It is for this reason, therefore, that I have expressed the view, in Pepsico that the aspect of “prima facie tenability” in Section 124(1)(ii) would only require the Court to pronounce on the arguability of the plea of invalidity. Anything more than that would actually dilute the law that the Supreme Court has enunciated in Patel Field Marshal Agencies. 8.[6] Mr. Bakhru has cited, before me, the judgment of a Coordinate Bench of this Court in Burger King Corporation v. Ranjan Gupta11, paras 11, 12, 13 and 32 of which reads thus:

8.10 Even otherwise, Burger King Corporation does not examine the impact of the decision of the Supreme Court in Patel Field Marshal on the exact scope and ambit of the interpretation of the expression “prima facie tenable” in Section 124(1)(ii), though Patel Field Marshal is incidentally noted in the decision.

8.11 I do, therefore, not find the judgment in Burger King Corporation to be in any way in conflict with the view that I have taken in Pepsico, as would justify referring of the issue to the Division Bench.

9. Mr. Bakhru also sought to contend that, in fact, in the draft issues which were placed before the Court on 10 October 2019, one of the issues was related to the validity of the defendants’ mark, but that this Court did not deem it appropriate to frame it as an issue. Mr. Anand points out that, at the time when the order dated 10 October 2019 was passed, the present application of the plaintiff under Section 124 was pending. As such, the issues which the Court proceeded to frame on 10 October 2019 cannot inhibit the Court from framing an additional issue regarding the validity of the defendants’ trademark, as sought in the present application.

10. For all the aforesaid reasons, I am of the opinion that, as

(i) the defendants have taken a 30(2)(e) defence,

(ii) the plaintiff has pleaded invalidity of the defendants’

(iii) the plea of invalidity is, according to me, prima facie tenable, as it is an arguable plea, within the meaning of Section 124(1)(ii), the prayers in this application deserve to be granted.

11. Accordingly, this Court frames the following additional issue: “Whether the registration of the defendants’ mark vide Registration No. 1474657 dated 30 April 2015 granted to the defendants, by allowing Application No. 2953829, is valid?”

12. In accordance with Section 124(1)(ii), the hearing of the suit stands adjourned to 31 January 2024 in order to enable the plaintiff to file a rectification petition.

13. The application stands allowed accordingly. IA 13786/2017 [under Order XXXIX Rules 1 and 2 of the CPC]

14. Re-notify on 31 January 2024.