UTO Nederland B. V. v. Tilaknagar Industries Ltd.

GANESH TRADING COMPANY AND OTHERS[5] cannot be applied to the facts of the case and the subsequent Division Bench in PARKSONS AIR 1984 BOM 218 Basavraj Page | 6 CARTAMUNDI PVT. LTD. (SUPRA) erred in applying the decision in HIRALAL PARBHUDAS (SUPRA). In support of the aforesaid submissions, reliance has been placed on WANDER LTD.

AND ANOTHER VS.

ANTOX INDIA P. LTD. (SUPRA), GUJARAT BOTTLING CO. LTD.

AND OTHERS VS.

COCA COLA CO. AND OTHERS[6], SHYAM SEL AND POWER LIMITED AND ANOTHER VS.

SHYAM STEEL INDUSTRIES LIMITED[7] and RAMAKANT AMBALAL CHOKSI VS.

HARISH AMBALAL CHOKSI AND OTHERS[8].

(VI) CONSIDERATION:

8. We have considered the rival submissions made on both the sides and have perused the record. The law relating to injunctions in India has its origin in Equity Jurisprudence of common law. Injunction is a judicial process by which party is required to do or to refrain from doing any particular act. It is in the nature of preventive relief to a litigant to prevent future possible injury. Identification of the standards for exercising such discretionary powers by the Court has not, generally, been part of the legislations. The guiding principles for exercise of discretionary powers appear to be drawn from the judicial precedence and the common law principles. The decision whether or not to grant an injunction has to be taken at the time when existence of the legal right asserted by the plaintiff and its alleged violation are both contested and uncertain and remain uncertain till they are established at the trial on evidence. The relief, by way of interlocutory injunction is granted to mitigate the injustice to the plaintiff during the period before that uncertainty could be resolved. The object of interlocutory

2024 SCC OnLine SC 3538 Basavraj Page | 7 injunction is to protect the plaintiff against the injury by violation of his right for which he cannot be adequately compensated in damages in the recovery if the uncertainty were to be resolved at the trial.

(VII) TRINITY TEST:

9. The cardinal principles for grant of injunction are:

(i) Whether the plaintiff has prima facie case?

(ii) Whether the balance of convenience lies in favour of the plaintiff?

(iii) Whether the plaintiff would suffer irreparable injury if his prayer for interlocutory injunction is disallowed?

10. Now we may advert to the scope and ambit of the trinity test on the basis of which the discretionary prayer for grant of injunction has to be dealt with. The expression ‘prima facie case’ is a Latin expression means ‘at first sight or based on first impression or on the face of it’. The expression ‘prima facie case’ has a well settled meaning in legal parlance. The House of Lords in AMERICAN CYNAMID CO.

AND ETHICON LTD.,[9] while dealing with scope and ambit of expression ‘prima facie case’ held as under: “The use of such expressions as "a probability," "a prima facie case," or "a strong prima facie case" in the context of the exercise of a discretionary power to grant an interlocutory injunction leads to confusion as to the object sought to be achieved by this form of temporary relief. The court no doubt must be satisfied that the claim is not frivolous or vexatious, in other words, that there is a serious question to be tried. It is no part of the court's function at this stage of the litigation to try to resolve conflicts of evidence on affidavit as to facts on which the claims of either party may ultimately depend nor to decide difficult questions of law which call for detailed argument and mature considerations. These are matters to be dealt with 1975 (1) ALL ER 504 Basavraj Page | 8 at the trial. One of the reasons for the introduction of the practice of requiring an undertaking as to damages upon the grant of an interlocutory injunction was that "it aided the court in doing that which was its great object, viz. abstaining from expressing any opinion upon the merits of the case until the hearing":Wakefield v. Duke of Buccleugh (1865) 12 L.T. 628,

629. So unless the material available to the court at the hearing of the application for an interlocutory injunction fails to disclose that the plaintiff has any real prospect of succeeding in his claim for a permanent injunction at the trial, the court should go on to consider whether the balance of convenience lies in favour of granting or refusing the interlocutory relief that is sought.” The aforesaid principle was reiterated in GARDEN COTTAGE FOODS LTD. VS.

MILK MARKETING BOARD10.

11. The meaning of expression ‘prima facie case’ was considered by Supreme Court in MARTIN BURN LTD. VS. R.N.BANERJEE11. In the said case, Supreme Court explained the connotation ‘prima facie case’ in the following words: “A prima facie case does not mean a case proved to the hilt but a case which can be said to be established if the evidence which is led in support of the same were believed. While determining whether a prima facie case had been made out, the relevant consideration is whether on the evidence let it was possible to arrive at the conclusion in question and as to whether that was the only conclusion which could be arrived at on that evidence.”

12. The meaning of expression ‘prima facie case’ was again explained by Supreme Court in DALPAT KUMAR AND ANR VS.

PRAHLAD SINGH AND ORS.12 and it was held that prima facie case is a substantial question raised bona fide which needs investigation and a decision on merits. It has further been held that expression ‘prima facie case’ is not to be confused with prima facie title which has to be established, on evidence at the (1983) 2 All ER 770 AIR 1958 Supreme Court 79 1992(1) SCC 719 Basavraj Page | 9 trial. Thus, at the stage of consideration of the application for injunction, the plaintiff, in order to establish he has prima facie case, has to prove that there is serious question to be tried in the suit.

13. The Supreme Court elucidated the meaning of expression ‘prima facie case’ in GUJARAT BOTTLING CO. LTD. (SUPRA) to mean that the Court should be satisfied that there is a serious question to be tried at the hearing, and there is a probability that of plaintiff obtaining the relief at the conclusion of the trial on the basis of the material placed before the Court. The expression ‘prima facie case’ means a substantial question raised bona fide which needs investigation and decision on merits and the Court, at the initial stage, cannot insist upon a full proof case warranting an eventual decree. [See: ANAND PRASAD AGARWAL VS.

TARKESHWAR PRASAD13, RAMAKANT AMBALAL CHOKSI (SUPRA) and STATE OF KERALA VS.

UNION OF INDIA14 ].

14. The Court, while dealing with the prayer for injunction has also to advert itself to the second essential ingredient for grant of injunction viz. ‘balance of convenience’. In order to determine whether the balance of convenience lies, the Court must weigh two matters. The first is to protect the plaintiff against injury by violation of his rights for which he could not be adequately compensated in damages recoverable in the action if the uncertainty were to be resolved in his favour. The second matter is that the defendant’s need to be protected against injury resulting from his having been prevented from exercising his own legal rights for which he could not be adequately

Basavraj Page | 10 compensated by an undertaking if the uncertainty were to be resolved in defendant’s favour at the trial. [see: HALSBURY’S LAWS OF ENGLAND, FOURTH EDITION, VOL-24 para 856, AMERICAN CYNAMID CO.

AND ETHICON LTD (SUPRA) and FELLOWES & SON V. FISHER.15 ]

15. The aforesaid principle has been reiterated with approval by Supreme Court in WANDER LIMITED (SUPRA) and it has been held that need to protect the plaintiff against the injury by violation of his right for which he cannot be compensated in damages recoverable in the action if the uncertainty were to be resolved in his favour has to be weighed against the corresponding need of the defendant to be protected against injury resulting from his having been prevented from exercising his legal rights for which he would not be adequately compensated. The Court, therefore, must weigh one need against another and determine where the ‘balance of convenience’ lies.

16. The Court, while dealing with the prayer for grant of injunction is required to consider the third essential ingredient viz. irreparable injury. The Supreme Court in M/S. GUJARAT BOTTLING CO. LTD. (SUPRA) has held that the Court is required to satisfy itself that the party seeking injunction needs protection from the consequences of apprehended injury and the injury is such which cannot be adequately compensated by way of damages. Thus, the Court is required to satisfy itself that in case an injunction as prayed for is not granted, the party seeking the same will suffer irreparable injury. (1975) 2 ALL ER 829 Basavraj Page | 11

17. A party is not entitled to an order of injunction as a matter of right. The grant of interlocutory injunction is a remedy which is discretionary in nature. However, such a discretion has to be exercised on the touchstone of trinity test viz. prima facie case, balance of convenience and irreparable injury. [See SHIV KUMAR CHADHA ETC. VS.

MUNICIPAL CORPORATION OF DELHI].16 It is equally well settled legal proposition that the temporary injunction being equitable relief, the discretion to grant such relief will be exercised only when the plaintiff’s conduct is free from blame and he approaches the Court with clean hands SEEMA ARSHAD ZAHEER VS.

MUNICIPAL CORPORATION OF GREATER MUMBAI.17

SCOPE OF APPEAL:

18. Having noted the three well settled legal propositions on the basis of which a discretionary power to deal with the prayer for injunction has to be exercised, we may now advert to the scope of appeal against an order dealing with a prayer for temporary injunction. A decision of three Judge Bench of Supreme Court in WANDER LIMITED (SUPRA) can be considered as a locus classicus. The Supreme Court, in paragraph 14 has dealt with the scope of appeal against an order granting temporary injunction, which is extracted below for the facility of reference:

19. The aforesaid view was quoted with approval by another two Judge Bench of Supreme Court in SHYAM SEL AND POWER LIMITED (SUPRA). In paragraph 36, it was held that the judgment in WANDER LIMITED (SUPRA) has been guiding the appellate courts in the country for decades while exercising the appellate jurisdiction considering the correctness of the discretion and jurisdiction for grant or refusal of interlocutory injunctions. Paragraphs 36 of SHYAM SEL AND POWER LIMITED (SUPRA) reads as under:

20. Recently, another two Judge Bench of the Supreme Court in RAMAKANT AMBALAL CHOKSI (SUPRA) dealt with the scope of appellate jurisdiction of the Court dealing with an appeal against an order of injunction and approved the principles laid down in WANDER LIMITED (SUPRA) and referred to the decision in SHYAM SEL AND POWER LTD., (SUPRA) and in paragraph 21, 26, 30, 32 35, 36, 37 it was held as under:

21. The law in relation to the scope of an appeal against grant or non-grant of interim injunction was laid down by this Court in Wander Ltd. v. Antox India P. Ltd., 1990 Supp SCC 727. Antox brought an action of passing off against Wander with respect to the mark Cal-De-Ce. The trial court declined Antox's plea for an interim injunction, however, on appeal the High Court reversed the findings of the trial judge. This Court, upon due consideration of the matter, took notice of two egregious errors said to have been committed by the High Court: a. First, as regards the scope and nature of the appeals before it and the limitations on the powers of the appellate court to substitute its own discretion in an appeal preferred against a discretionary order; and b. Secondly, the weakness in ratiocination as to the quality of Antox's alleged user of the trademark on which the passing off action is founded.

26. What flows from a plain reading of the decisions in Evans (supra) and Charles Osenton (supra) is that an appellate court, even while deciding an appeal against a discretionary order granting an interim injunction, has to: a. Examine whether the discretion has been properly exercised, i.e. examine whether the discretion exercised is not arbitrary, capricious or contrary to the principles of law; and b. In addition to the above, an appellate court may in a given case have to adjudicate on facts even in such discretionary orders.

30. This Court in Shyam Sel & Power Ltd. v. Shyam Steel Industries Ltd., (2023) 1 SCC 634 observed that the hierarchy of the trial court and the appellate court exists so that the trial court exercises its discretion upon the settled principles of law. An appellate court, after the findings of the trial court are recorded, has an advantage of appreciating the view taken by the trial judge and examining the correctness or otherwise thereof within the limited area available. It further observed Basavraj Page | 15 that if the appellate court itself decides the matters required to be decided by the trial court, there would be no necessity to have the hierarchy of courts.

32. The appellate court in an appeal from an interlocutory order granting or declining to grant interim injunction is only required to adjudicate the validity of such order applying the well settled principles governing the scope of jurisdiction of appellate court under Order 43 of the CPC which have been reiterated in various other decisions of this Court. The appellate court should not assume unlimited jurisdiction and should guide its powers within the contours laid down in the Wander (supra) case.

35. Any order made in conscious violation of pleading and law is a perverse order. In Moffett v. Gough, (1878) 1 LR 1r 331, the Court observed that a perverse verdict may probably be defined as one that is not only against the weight of evidence but is altogether against the evidence. In Godfrey v. Godfrey, 106 NW 814, the Court defined “perverse” as “turned the wrong way”; not right; distorted from the right; turned away or deviating from what is right, proper, correct, etc.

36. The expression “perverse” has been defined by various dictionaries in the following manner: a. Oxford Advanced Learner's Dictionary of Current English, 6th Ed. Perverse - Showing deliberate determination to behave in a way that most people think is wrong, unacceptable or unreasonable. b. Longman Dictionary of Contemporary English - International Edition Perverse - Deliberately departing from what is normal and reasonable. c. The New Oxford Dictionary of English - 1998 Edition Perverse - Law (of a verdict) against the weight of evidence or the direction of the judge on a point of law. d. New Webster's Dictionary of the English Language (Deluxe Encyclopedic Edition) Perverse - Purposely deviating from accepted or expected behavior or opinion; wicked or wayward; stubborn; cross or petulant. e. Stroud's Judicial Dictionary of Words & Phrases, 4th Ed. Perverse - A perverse verdict may probably be defined as one that is not only against the weight of evidence but is altogether against the evidence.

37. The wrong finding should stem out on a complete Basavraj Page | 16 misreading of evidence or it should be based only on conjectures and surmises. Safest approach on perversity is the classic approach on the reasonable man's inference on the facts. To him, if the conclusion on the facts in evidence made by the court below is possible, there is no perversity. If not, the finding is perverse. Inadequacy of evidence or a different reading of evidence is not perversity. (See: Damodar Lal v. Sohan Devi,

RELEVANT STATUTORY PROVISIONS:

21. At this stage, it is apposite to take note of Section 56(1) of the Trade and Merchandise Marks Act, 1958 (1958 Act) and Order XXXIX Rule (1) of the Code of Civil Procedure, 1908, which are extracted below for the facility of reference:

23. A Division Bench of this Court, in HIRALAL PARBHUDAS (SUPRA) was dealing with submission that a discretionary order passed under section 56(1) of the 1958 Act should not be lightly interfered with in an appeal. In the facts of the said case, it was found by the Division Bench that the order passed by the adjudication.

24. Another Division Bench of this Court in M/S. NATIONAL CHEMICALS AND COLOUR CO. (SUPRA) again dealt with an order of the Registrar passed under the 1958 Act and referred to the decision in HIRALAL PARBHUDAS (SUPRA) for the proposition that there is a distinction between the adjudication by the Registrar and exercise of discretion by the Registrar under the 1958 Act. Thus, both the decisions in HIRALAL PARBHUDAS (SUPRA) and M/S. NATIONAL CHEMICALS AND COLOUR CO. (SUPRA) dealt with an order passed under Section 56(1) of the Act of 1958.

COLGATE PALMOLIVE COMPANY AND ANOTHER:

25. Another Division Bench judgment of this Court in COLGATE PALMOLIVE COMPANY (SUPRA), while placing reliance on the decision of Supreme Court in DALPAT KUMAR AND ANR VS.

PRAHLAD SINGH AND ORS.,18 held that grant of injunction is discretionary relief and held that the decisions rendered by Division Benches of this Court in HIRALAL 1992(1) SCC 719 Basavraj Page | 19 PARBHUDAS (SUPRA) and M/S. NATIONAL CHEMICALS AND COLOUR CO. (SUPRA) have no relevance to an appeal arising out an order under Order XXXIX Rule 1 and 2 of the CPC. In paragraph 10, it was held as under:

PARKSONS CARTAMUNDI PVT. LTD. (SUPRA):

26. However, a Division Bench of this Court in PARKSONS CARTAMUNDI PVT. LTD. (SUPRA) subsequently did not deal with the previous judgment of the Division Bench in COLGATE PALMOLIVE COMPANY (SUPRA), which was binding on it and relied on a decision in HIRALAL PARBHUDAS (SUPRA), which was already held to be not relevant while adjudicating an appeal arising out of an order of injunction. In paragraphs 14, 16 and 17 the subsequent Division Bench held as under:

16. It is true that the learned Single Judge has passed the impugned order in favour of the respondent-defendant. The question is whether the same can be considered as a discretionary order. In Hiralal Prabhudas v. Ganesh Trading Company, where a similar contention was raised that the appellate court should not disturb the discretionary order of the learned Single Judge, a Division Bench of this Court speaking through Justice Lentin held as under: “It was finally urged by Mr. Kale that the discretion exercised by the Deputy Register under Section 56 of the Act in the respondents' favour should not be lightly disturbed and the appellate Court should therefore not disturb the judgment and order of the learned single Judge. We ask ourselves; Pray where at all arises the Deputy Registrar did not exercise any discretion under Section 56 in rejecting the appellants application for rectification. It must be remembered that the concept of discretion is distinct from that of adjudication. When the Deputy Registrar rejected the appellants application for rectification on the ground that the two marks are not deceptively similar, she did not use any discretion but adjudicated upon the rival contentions of the parties. It would be trite to say that exercise of discretion can arise in favour of a party when adjudication by the Registrar is against that party. In the present case, the Deputy respondents, with the result that there was no occasion for the Deputy Registrar to exercise any discretion. If the Deputy Registrar had held that the two marks were deceptively similar (which she did not) but that in exercise of her discretion she did not consider it necessary to pass an order for rectification, it could be said that the Deputy respondents, interference with such discretion was not called for. Nothing of the kind can be said in the present case where in fact the Deputy Registrar has held that the two marks are not deceptively similar. In any event, this court having come to the conclusion that the two marks are deceptively similar, this cannot be a case for the exercise of discretion in favour of the respondents as their case is not founded on truth and also in view of the Basavraj Page | 21 uncontroverted evidence of actual deception perpetrated and confusion caused. (emphasis supplied)

17. It is thus clear that the concept of discretion is distinct from that of adjudication. What the learned Single Judge has done in the instant case is making prima facie adjudication that the defendants' trademark is not deceptively similar to that of the plaintiff. Therefore, there is no question of any discretion exercised by the learned Single Judge. We have already held that the defendant has been infringing the plaintiff's trademarks and has been attempting to pass off its playing cards as those of the plaintiff. This has happened in respect of the very trademark “MERELANE, which is registered since the year 1971 and also the label mark on the packets containing the playing cards prominently bearing the words “MERELANE No. 7”. Hence, there is no question of applying the principle enunciated in the case of Wander Limited v. Antox India (P) Limited.

27. Another Division Bench of this Court in GOLDMINES TELEFILMS PVT. LTD. relied on the decision of M/S. NATIONAL CHEMICALS AND COLOUR CO. (SUPRA) and HIRALAL PARBHUDAS (SUPRA).

28. It is pertinent to note that the subsequent Division Bench decision in PARKSONS CARTAMUNDI PVT. LTD. (SUPRA), in the facts of the case found that the plaintiff has been able to make out a strong prima facie case and the balance of convenience lies in its favour. It was further held that in case injunction is not granted, the plaintiff in that case would suffer irreparable injury. Accordingly, injunction, in the facts of the case was granted. Similar view was taken in GOLDMINES TELEFILMS PVT. LTD.(SUPRA).

29. The scope of appeal arising out of an order granting injunction is different than the appeal arising out of an order passed under Section 56(1) of the 1958 Act and cannot be compared to scope of an appeal arising from an order passed Basavraj Page | 22 under Section 56(1) of the 1958 Act. The scope of appeal against an order granting injunction is well delineated by the decisions of the Supreme Court in WANDER LIMITED (SUPRA), M/S GUJARAT BOTTLING COMPANY LTD. (SUPRA), SHYAM SEL AND POWER LTD., (SUPRA)

AND RAMAKANT AMBALAL CHOKSI (SUPRA).

30. Even otherwise, it is well settled in law that if there are two conflicting judgments of equal strength, the former decision will prevail in case where previous decision specifically considers a particular question and lays down the principle relating to the said question and where subsequent decision neither deals with the earlier decision nor the principle laid down therein. [See: GOVERNMENT OF WEST BENGAL VS.

TARUN K. ROY.]19 The subsequent Division Benches decision in PARKSONS CARTAMUNDI PVT. LTD. (SUPRA) and GOLDMINES TELEFILMS PVT. LTD. (SUPRA) did not consider the principle with regard to the scope of appeal arising out of an order of injunction laid down in COLGATE PALMOLIVE COMPANY (SUPRA). The subsequent Division Benches in PARKSONS CARTAMUNDI PVT. LTD. (SUPRA) and GOLDMINES TELEFILMS PVT. LTD. (SUPRA) ought to have appreciated that the decisions rendered in HIRALAL PARBHUDAS CO. (SUPRA) dealing with an appeal arising from an order passed by the Registrar under 1958 Act, have no relevance while dealing with an appeal against an order granting or refusing to grant injunction. The subsequent Division Benches have failed to take note of the binding precedent with regard to the scope of appeal arising out of an order of injunction in WANDER

Basavraj Page | 23 LIMITED (SUPRA) and M/S GUJARAT BOTTLING COMPANY LTD. (SUPRA). Therefore, the view taken by the Division Bench of this Court in COLGATE PALMOLIVE COMPANY (SUPRA) is in consonance with the well settled legal proposition with regard to the scope of an appeal and rightly holds that the decisions rendered by Division Bench in HIRALAL PARBHUDAS CO. (SUPRA), which deal with the scope of appeal against an order passed by the Registrar under the 1958 Act, have no relevance while dealing with an appeal arising out of an order of injunction.

ANSWER TO REFERENCE:

31. For the aforementioned reasons, the questions referred to us are answered as follows:

(i) The Division Bench decision of this Court in

COLGATE PALMOLIVE COMPANY (SUPRA) sets out the correct principle of law. An order of temporary injunction does not cease to be a discretionary order merely because the learned motion Judge did not find any prima facie case and refused to grant interim restraint order. It correctly holds that in the matter of temporary injunction, the Court does not adjudicate on the subject matter or any part of it on merits and considers the application for temporary injunction in the light of well-known principles and exercises its discretion weighing all relevant consideration without any expression of opinion on merits of the matter. The Division Bench has rightly held that the decisions of this Court in HIRALAL PARBHUDAS (SUPRA) and M/S. NATIONAL CHEMICALS AND COLOUR CO. (SUPRA) Basavraj Page | 24 have no relevance while deciding an appeal arising out of an order of injunction.

(ii) The scope and ambit of an appeal from an order passed by the trial Judge has already been delineated by the Supreme Court in WANDER LTD. (SUPRA), SHYAM SEL AND POWER LIMITED (SUPRA) and RAMAKANT AMBALAL CHOKSI (SUPRA). In view of aforesaid enunciation of law by Supreme Court, it is evident that the appellate court will not interfere with exercise of discretion of Court of first instance and substitute its own discretion except where the discretion has been shown to have been exercised arbitrarily or capriciously or perversely or where the Court had ignored the settled principles of law regulating grant or refusal of interlocutory injunctions. The Appellate Court while deciding an appeal, has to examine whether the discretion exercised is not arbitrary, capricious or contrary to the principles of law and the appellate Court may, in a given case, has to adjudicate on facts even in such discretionary orders.

32. Accordingly, the reference is answered.

33. Let the appeal be listed for orders before the appropriate Bench. (CHIEF JUSTICE) (M. S. KARNIK, J.) (SHYAM C. CHANDAK,J.) Basavraj Page | 25