Full Text
HIGH COURT OF DELHI
JUDGMENT
COROMANDEL INDAG PRODUCTS INDIA LTD. .....Plaintiff
Through: Mr. Pankaj Kumar, Advocate
Through: Mr. Rajshekhar Rao, Senior Advocate with Mr. Prashant Gupta, Mr. Karan Singh, Ms. Shivangi Kohli, Mr. Mohit Sharma, Mr. Yashraj Samant and
Mr. Aadhar Nautiyal, Advocates
1. The present application has been filed on behalf of the defendants under Order VII Rule 11 of the Code of Civil Procedure, 1908 (hereinafter ‘CPC’) seeking rejection of plaint.
2. Notice in the present application was issued on 6th December 2024. Reply has been filed on behalf of the plaintiff.
3. Submissions were heard on behalf of the parties on 12th March 2025 and 15th April 2025 when the judgment was reserved. The parties have also filed their respective written submissions.
BRIEF FACTS
4. Brief facts stated in the plaint, which are relevant in deciding the present application, are as follows:
4.1. The present suit has been filed seeking relief of permanent injunction restraining the defendants from infringement of copyright and passing off, along with other ancillary reliefs.
4.2. The plaintiff, a company engaged in the business of agrochemicals including pesticides, insecticides and herbicides, was incorporated on 30th June 1983 and is the parent company of the Coromandel Group founded in
1968. Coromandel Agrico Private Limited (hereinafter ‘CAPL’) and Agrimas Chemicals Limited (hereinafter ‘Agrimas’) are also engaged in the aforesaid business and are a part of the Coromandel Group.
4.3. Between 1983 and 1988, the plaintiff collaborated with one Takeda Chemical Industries Limited (hereinafter ‘Takeda’) to launch an insecticide based on certain technical component (CARTAP HYDROCLORIDE). The plaintiff entered into a non-exclusive and royalty-free License Agreement with Takeda whereby the plaintiff had to purchase the aforesaid technical component from Takeda and was permitted to sell insecticides manufactured therefrom under the mark PADAN.
4.4. Takeda, in 2001, entered into a joint venture with the defendant no.1, to be constituted as Sumitomo Chemical Takeda Agro Company Limited. The aforesaid company was absorbed by Sumitomo Chemical Company Limited, the defendant no.1, in 2007. However, the plaintiff remained the exclusive user of the mark PADAN in India.
4.5. The plaintiff, in 2006, created the packaging for its product bearing the mark PADAN with the below-mentioned original artistic work and the same is continuously and uninterruptedly being used by the plaintiff since then.
4.6. In the year 2007, the aforesaid technical component became public and the defendant no.1 stopped manufacturing and supplying the same to the plaintiff. The defendant no.1, through the email dated 24th December 2007, communicated to the plaintiff that it temporarily authorized the plaintiff to use the mark PADAN in relation to the aforesaid technical component supplied by third-parties during the year 2008 or till it recommenced the supply thereof. The plaintiff then received a letter dated 4th January 2011 from the defendant no.1 stating its willingness to recommence the supply of the aforesaid technical compound from 1st April 2011 in terms of the Distribution Agreement dated 26th December 2005. It was also mentioned that the defendant no.1 shall terminate the aforesaid temporary license/ arrangement in terms of the aforesaid email dated 24th December 2007 with the plaintiff. The defendant no.1 thereafter did not provide the aforesaid technical component to the plaintiff nor did it object to the continued use of the mark PADAN by the plaintiff.
4.7. The plaintiff has been honestly and bona fidely using the mark PADAN in India as a proprietor thereof. By virtue of continuous, uninterrupted and extensive use, promotion and quality control, the plaintiff has earned enviable goodwill and reputation for the mark PADAN in India.
4.8. In May 2023, the plaintiff came to know that the defendant no.2 is going to launch pesticide based on the aforesaid technical component under the mark PADAN.
4.9. From further enquiry, it was revealed to the plaintiff that the defendants commenced using the mark PADAN in May 2023. The plaintiff also procured such product of the defendant no.2 from the market. A photograph of the packaging thereof, which is deceptively similar to that of the plaintiff, is reproduced below:
5. Accordingly, the present suit has been filed inter alia seeking the following reliefs: “(a) A decree of permanent injunction restraining the defendants themselves and their officers, servant, affiliates, employees and all others in capacity of principal or agent acting for and on their behalf, or anyone claiming through, by or under him, from using, selling, soliciting, providing dealership, displaying, advertising through print, visual or electronic media including on internet, domain and email addresses or by any other mode or manner dealing in the impugned trademark PADAN and packaging/artwork and/ or any other trademark/packaging/artwork which is identical with and/ or deceptively similar to the Plaintiff’s said trademark PADAN (word) and packaging/artwork in relation to insecticide and other agro-chemicals amounting to:
(i) Infringement of Copyright of the plaintiff in said trademark/packaging/artwork.
(ii) Passing off and enabling others to pass off their goods and business as those of the plaintiff.
(iii) Diluting the said trademark/packaging/artwork of plaintiff and goodwill and reputation acquired thereunder. (b) A decree of permanent injunction restraining the Defendants themselves and their officers, servants, affiliates, employees and all others in capacity of principal or agent acting for and on his behalf, or anyone claiming through, by or under him, from interfering in the business of plaintiff under the said trademark/packaging/artwork.
(c) Declare that the plaintiff is the owner and proprietor of said trademark/packaging/artwork PADAN in relation to Pesticide and goodwill reputation acquired thereunder in India.”
SUBMISSIONS ON BEHALF OF THE DEFENDANTS
6. Mr. Rajshekhar Rao, senior counsel appearing on behalf of the defendants/ applicants, has made the following submissions in support of the application filed by the defendants under Order VII Rule 11 of the CPC:
6.1. The plaintiff has no locus standi to institute the present suit. 6.1.1. The defendant no.1 granted a non-exclusive license to CAPL to use the mark PADAN in India. Therefore, the plaintiff has wrongfully alleged that it holds a non-exclusive license to use the mark PADAN. 6.1.2. The plaintiff is neither a licensee of the mark PADAN nor has it ever used the same in India. The plaintiff has fraudulently based its plaint on CAPL’s use of the mark PADAN. However, the same is impermissible in law as both companies are separate legal entities. Thus, the term ‘plaintiff’ can only advert to Coromandel Indag Products India Limited and not to any of its alleged group companies including CAPL. 6.1.3. CAPL is currently undergoing corporate insolvency resolution process (CIRP) before the National Company Law Tribunal (Allahabad Bench). Therefore, as the claims made in the plaint arise out of the non-exclusive license granted by the defendant no.1 to CAPL, only the Resolution Professional (RP) acting on behalf of CAPL could bring an action against the defendants. However, CAPL has not even been impleaded as a party to the present suit.
6.2. The plaintiff did not file two agreements between CAPL and the defendant no.1, i.e., the Trademark Agreement dated 15th March 2003 and the Distribution Agreement dated 26th December 2005 which unequivocally establish that CAPL was using the mark PADAN as a licensee of the defendant no.1, and not the plaintiff.
6.3. The plaint fails to disclose any cause of action against the defendants for the relief of declaration and/ or permanent injunction with respect to use of the mark PADAN. Admittedly, CAPL, the plaintiff’s group company was merely a non-exclusive licensee of the mark PADAN, while the defendant no.1 remains the registered proprietor of the mark PADAN bearing no.255161 in class 5 with effect from 1969. Therefore, neither CAPL nor the plaintiff can claim any proprietary rights over the mark PADAN.
6.4. The plaintiff has falsely claimed copyright ownership in the artistic work of its packaging/ logo on the basis of the Assignment Agreement dated 4th April 2006 executed between one Mr. Kailash Sharma and CAPL. However, any alleged copyright in the said artistic work shall be vested with CAPL and not the plaintiff. In any event, as per the Distribution Agreement, CAPL was obliged to seek prior permission from the defendant no.1 to introduce any packaging for its products under the mark PADAN. As no such permission was ever sought, the plaintiff’s claim of infringement of copyright in the said artistic work is unsustainable.
6.5. The packaging of products under the mark PADAN filed by the plaintiff does not mention its name but instead bears the text ‘in association with Sumitomo Chemicals Takeda Agrico Company Limited, Japan’ (refer pages 159 to 163 of the documents filed with the plaint). Such text acts as a source identifier for the consumers who associate the mark PADAN with the defendant no.1 only.
6.6. The License Agreement dated 6th December 2004 between the plaintiff and CAPL relied upon by the plaintiff is fabricated. Pertinently, in the recitals of the said agreement, the plaintiff is falsely stated to be the ‘registered trademark owner’ of the marks PADAN 4G and PADAN 50SP.
SUBMISSIONS ON BEHALF OF THE PLAINTIFF
7. Mr. Pankaj Kumar, counsel appearing on behalf of the plaintiff, has made the following submissions in response:
7.1. The plaintiff is the parent company of the Coromandel Group of which CAPL is a part. Therefore, any reference to the term ‘plaintiff’ in the plaint shall include all the group companies of the Coromandel Group including CAPL.
7.2. As per the agreements dated 27th January 2000 and 6th December 2004 between the plaintiff and CAPL, CAPL was given the exclusive right, title and interest over the mark PADAN, among others, subject to payment of royalty. The aforesaid agreement dated 6th December 2004 was also enforced before this Court in CS(COMM) 363/2016. Therefore, any use of the mark PADAN by CAPL inures to the benefit of the plaintiff.
7.3. While the defendant no.1’s predecessor obtained registration for the trade mark PADAN bearing no.255161 in class 5, the defendant no.1 or its predecessor never used the said mark in India. On the other hand, the plaintiff has been continuously and exclusively using the said mark in India since
1988.
7.4. The defendants, on account of their inaction towards the plaintiff’s use of the mark PADAN as well as their own non-use of the same, abandoned the mark PADAN at least since 24th December 2007 and the dealers/ distributors recognize the plaintiff as the owner and proprietor of the mark PADAN since
1988.
7.5. The plaintiff is the proprietor of the mark PADAN and the artwork contained in the packaging thereof.
7.6. The defendants, in June 2023, launched their products under the mark PADAN using the packaging which is identical with the plaintiff’s original artwork in its product packaging under the mark PADAN. Thus, the defendants are attempting to ride over the goodwill and reputation of the plaintiff evidenced by uninterrupted independent use of the mark PADAN by the plaintiff since 2012. The aforesaid sufficiently discloses a cause of action against the defendants in the present suit.
ANALYSIS AND FINDINGS
8. I have heard counsel for the parties and perused the material on record.
9. At the outset, I deem it necessary to reiterate the settled position of law in deciding an application filed under Order VII Rule 11 of the CPC. The remedy under the aforesaid provision is an independent and special remedy empowering the Court to dismiss a suit at the threshold without conducting a trial if the Court is satisfied that any of the grounds mentioned in the said provision is fulfilled. The underlying object of the aforesaid provision is that the Court would prevent the plaintiff from unnecessarily protracting the proceedings in a suit and shall put an end to the sham litigation such that no further judicial time is wasted.
10. The aforesaid position of law has been well crystallized in several decisions of the Supreme Court such as T Arivandandam v. T.V. Satyapal[1] and Dahiben v. Arvindbhai Kalyanji Bhanusali (Gajra)2. In T Arivandandam (supra), the Supreme Court held that while deciding an application under Order VII Rule 11 of the CPC, it is important to decide whether the plaint discloses a real cause of action or something purely illusory. The relevant portion from the aforesaid judgment is extracted below:
Whether the plaintiff is competent to institute the present suit
11. The plaintiff in the present suit is ‘Coromandel Indag Products India Limited’, a company incorporated on 30th June 1983 under the provisions of the Companies Act, 1956. Inexplicably, paragraph 2 of the plaint while making a reference to other companies being a part of the Coromandel Group states that the term ‘plaintiff’ includes other group companies of the plaintiff. The pleading in paragraph 2 of the plaint is set out below in verbatim:
203205, Uttar Pradesh and Agrimas Chemicals Limited having registered office at H[2], MIDC Industrial Estate, Taloja, Distt.Rajgadh, Maharastra- 410208 and other office at 602, 6th Floor, ILD Trade Centre Sector- 47 Gurugram, Haryana - 122018 are the part of the Coromandel Group which are engaged in the same business. Term Plaintiff hereinafter includes and said group companies of the plaintiff if not specified.”
12. It is well-established that every corporate entity is a separate legal entity. As far back as in 1897, the House of Lords, in Salomon v. Salomon & Co. Ltd[3], held that every company has a separate legal personality from its shareholders and related entities. The aforesaid position of law was recognized by various courts in India including the Supreme Court in Vodafone International Holdings BV v. Union of India[4] wherein it was held that a parent company and its subsidiary including a wholly owned subsidiary are distinct legal entities. Therefore, the plaintiff company cannot represent any other company in a suit even if the said company is a group company/ subsidiary of the plaintiff. Only CAPL was competent to institute the present suit against the defendants if there was a cause of action in its favour. Hence, the plaintiff cannot espouse the cause of CAPL in the present suit.
13. In paragraph 21 of the plaint, it has been admitted that CAPL is under liquidation and an RP has been appointed. Merely because CAPL is under insolvency would not create a right in favour of the plaintiff to institute the present suit. In terms of the provisions of the Insolvency and Bankruptcy Code, 2016, the management of affairs of the corporate debtor CAPL would lie with the RP. Therefore, the cause of action for filing the present suit would [1897] AC 22: (1895-99) All ER Rep 33 (HL) be in favour of CAPL acting through the RP and there is no legal basis for the plaintiff to institute the aforesaid suit on behalf of CAPL.
14. Next, a reference may be made to paragraphs 7 and 8 of the plaint which are set out below: “7. That upon obtaining the registration under Section 9(3) of the Insecticide Act, 1968 by the Plaintiff, Takeda Chemical Industries Ltd. entered into License Agreement with Plaintiff whereby Plaintiff had to purchase the said CARTAP HYDROCHLORIDE technical from Tekeda Chemical Industries Ltd. and manufacture insecticide with other ingredients of the composition of the insecticide which the plaintiff itself had to procure from local sources and sell the same under the trademark PADAN.
8. That though Takeda Chemical Industries Ltd. had applied for registration of trademark PADAN under no. 255161 in class 05 and obtained registration, it gave non-exclusive and royalty free permission to use the said trademark to the Plaintiff of the said CARTAP HYDROCLORIDE insecticide in consideration of the fact that the plaintiff had to purchase the technical i.e CARTAP HYDROCLORIDE from them.”
15. In the aforesaid paragraphs, it has been averred that Takeda had obtained registration for the mark PADAN and gave a non-exclusive right to use the said mark to the plaintiff. It is also averred that the plaintiff entered into a License Agreement with Takeda to use the mark PADAN. However, pertinently, no such license agreement has been filed along with the plaint.
16. Now a reference may also be made to paragraphs 13 and 14 of the plaint, the relevant extracts from which are set out below:
supply: provided that we will not be responsible nor will we incur any liability to you or your customers for any damage, losses, or problem cause by other source’s cartap.’
14. …Plaintiff received letter dated January 4th, 2011 from defendant inter-alia mentioning as under: “We sincerely appreciate the meeting held on 22.11.2010 at your Head Quarter attended by our managers, Mr. Horinouchi and Ohisa, accompanied with Mr. Ooka and Mr. Gujral of our Indian Affiliate (SCIPL- SUMITOMO CHEMICAL INDIA LIMITED) As they mentioned at the said meeting, in accordance with the terms and conditions of the Distribution Agreement dated December 26th, 2005, we are ready to re-commence the supply of the Compounds (as defined in the Agreement) for the exclusive use as an active ingredient of the product to be manufactured by you, for the period after April 1st, 2011. Accordingly, effective from April 1st, 2011 or actual date the supply has re-commenced whichever comes earlier, we shall terminate our temporary licence, which we granted pursuant to our email dated December 24, 2007, to use the PADAN trademark for the product that uses an active ingredient supplied by third parties; and you shall refrain from the use of the trademark granted under such temporary license.””
17. In paragraphs 13 and 14 of the plaint, references have been made to an email dated 24th December 2007 and a letter dated 4th January 2011 allegedly written by the defendant no.1 to the plaintiff. The aforesaid letter dated 4th January 2011 also makes a reference to a Distribution Agreement dated 26th December 2005. However, a perusal of the aforesaid communications filed with the plaint shows that the said communications were sent by the defendant no.1 to CAPL, and not to the plaintiff. The plaintiff has referred to the aforesaid communications being sent to the plaintiff overlooking the fact that CAPL is a separate corporate entity distinct from the plaintiff.
18. From the aforesaid averments, it is evident that the plaint is premised on a misconception that the license granted in favour of CAPL, being a group company of the plaintiff, would give a cause of action in favour of the plaintiff. Therefore, the cause of action, as articulated in the plaint, would at best lie in favour of CAPL and not the plaintiff. Non-disclosure of documents relied upon in the plaint
19. Despite a specific mention being made in the plaint, the aforesaid Distribution Agreement dated 26th December 2005 has not been filed by the plaintiff. However, a copy of the said agreement has been filed by the defendants, which shows that the said agreement was between CAPL and the defendant no.1.
20. For the purposes of deciding an application under Order VII Rule 11 of the CPC, the Court has to take into consideration only the averments made in the plaint and the documents filed therewith. No reference can be made to the written statement or the documents filed on behalf of the defendant. However, when a reference to any document is made in the plaint, the Court can take the same into consideration even if the same has not been filed by the plaintiff.
21. The defendants have placed reliance on the decision of the Supreme Court in Church of Christ Charitable Trust and Education Charitable Society v. Ponniamman Educational Trust[5] wherein the Court made the following observations:
second defendant has been filed along with the plaint under Order 7 Rule 14(1). As rightly pointed out by the learned Senior Counsel for the appellant, if he is not in possession of the power of attorney, it being a registered document, he should have filed a registration copy of the same. There is no such explanation even for not filing the registration copy of the power of attorney. Under Order 7 Rule 14(2) instead of explaining in whose custody the power of attorney is, the plaintiff has simply stated "nil". It clearly shows non-compliance with Order 7 Rule 14(2).
18. In the light of the controversy, we have gone through all the averments in the plaint. In Para 4 of the plaint, it is alleged that the second defendant as agreement-holder of the first defendant and also as the registered powerof-attorney holder of the first defendant executed the agreement of sale. In spite of our best efforts, we could not find any particulars showing as to the documents which are referred to as “agreement-holder”. We are satisfied that neither the documents were filed along with the plaint nor the terms thereof have been set out in the plaint. The abovementioned two documents were to be treated as part of the plaint as being the part of the cause of action. It is settled law that where a document is sued upon and its terms are not set out in the plaint but referred to in the plaint, the said document gets incorporated by reference in the plaint. This position has been reiterated in U.S. Sasidharan v. K. Karunakaran [(1989) 4 SCC 482] and Manohar Joshi v. Nitin Bhaurao Patil [(1996) 1 SCC 169].”
22. The Supreme Court also, in Dahiben (supra), reiterated the aforesaid position and made the following observations: “24.4. If, however, by clever drafting of the plaint, it has created the illusion of a cause of action, this Court in Madanuri Sri Rama Chandra Murthy v. Syed Jalal [(2017) 13 SCC 174: (2017) 5 SCC (Civ) 602] held that it should be nipped in the bud, so that bogus litigation will end at the earliest stage. The Court must be vigilant against any camouflage or suppression, and determine whether the litigation is utterly vexatious, and an abuse of the process of the court.”
23. Therefore, since the aforesaid agreement has been relied upon in the plaint, the Court can look into it even though it has been filed on behalf of the defendants along with the written statement. It appears that the plaintiff has deliberately not filed the said agreement as it would show that the said agreement has been entered by and between the defendant no.1 and CAPL and the plaintiff was not a party to the said agreement.
24. As per the Distribution Agreement dated 26th December 2005, the terms of trade mark license granted by the defendant no.1 in favour of CAPL are detailed in Article 8 of the said agreement dated 26th December 2005. Article 8.[1] and 8.[2] of the said agreement is set out below: “8.[1] During the term of this Agreement and subject to the terms and conditions herein, STA grants to Distributor a non-exclusive, royalty fee non-transferrable license to use the Trademarks on the Products as indicated in Exhibit D for distribution of the Products for the Field in the Territory with a right to sub-license to its affiliates; provided that, Distributor shall cause its affiliates to abide by and carry out the duties and obligations imposed upon Distributor hereunder mutatis mutandis. 8.[2] Distributor acknowledges STA’s right, title and interest in and to the Trademarks and will not at any time do or cause to be done any action or inaction which in any way may impair or intend to impair any part of said right, title and interest. Distributor shall not question the validity of any of the Trademarks. Neither Distributor nor any of its dealers nor other sales network entities shall use or attempt to use any advertising or promotional materials tending to dilute or harm the reputation or goodwill attached to STA or the Trademarks. Distributor shall use the Trademarks applicable hereto in connection solely with the sale of the Products in the manner and form in which they have hereto before been used by STA and in no other manner or form except as expressly authorized by STA in advance in writing. All advertising and promotional materials prepared or placed by Distributor and/or any of its dealers or other sales network entities, as well as the format of any of the Trademarks, shall be consistent with STA standards with regard to Product attributes and performance.”
25. These clauses demonstrate that CAPL was only given a license on a non-exclusive basis to use the mark PADAN and there was no assignment of the said mark in its favour. Therefore, under the terms of the aforesaid agreement, even CAPL could not have claimed any ownership/ proprietary right over the mark PADAN. Whether there is any cause of action disclosed in the plaint on the basis of copyright infringement
26. The plaintiff claims that in the year 2006, it created the artistic work in the form of packaging for its products being sold under the mark PADAN and has been using the same consistently. Paragraph 12 of the plaint is set out below:
The said artistic work involved in the packaging/trademark PADAN used by the plaintiff is an original art work within the meaning of the Copyright Act 1957 and that the Plaintiff is the owner thereof. The said artwork is well protected and enforceable within the ambit of the Copyright Act as well as by virtue of India’s membership to the Berne Convention, the Universal Copyright Convention and the International Copyright Order 1991. The Plaintiff has been using the said artistic packaging in relation to said goods and business within the meaning of Section 14 of Copyright Act, 1957.”
27. In this regard, the plaintiff has filed and placed reliance on the Assignment Agreement dated 4th April 2006 executed between one Uttam Sharma, the proprietor of M/s Creative Advertising Associate and CAPL. As per the said agreement, the assignment of copyright is in favour of CAPL and not the plaintiff. Notably, the said Assignment Agreement does not provide any period for the assignment. Therefore, in terms Section 19(5) of the Copyright Act, 1957, the period of assignment shall be deemed to be for a period of 5 years, which has long expired. Therefore, there is no cause of action in favour of the plaintiff to institute the present suit on the basis of infringement of copyright. Whether there is any cause of action disclosed in the plaint on the basis of passing off
28. Now a reference may be made to paragraphs 16 and 17 of the plaint which are set out below:
29. In the aforesaid paragraphs, the plaintiff has alleged that it has been continuously using the mark PADAN since the year 1988 and the aforesaid packaging since the year 2006 in India as a proprietor and without paying any royalty to the defendants. However, all the invoices and advertising materials that have been filed with the plaint show use of the mark PADAN on behalf of CAPL. No documents have been filed to show that the plaintiff has made any sales of goods bearing the mark PADAN.
30. In paragraph 20 of the plaint, the plaintiff has given sales figures of CAPL from the financial year 2013-14 to 2021-22 and of Agrimas during the year 2022-23. Similarly, in paragraph 23, the sales and promotional expenses of CAPL for the financial years 2013-14 to 2021-22 have been given and not of the plaintiff. For ease of reference, paragraphs 20 and 23 of the plaint are set out below:
2020-2021 2219.20 2021-2022 703.32 2022-2023 515.03 *** *** ***
23. That the plaintiff has already spent enormous amounts of money on its publicity thereof. In consequence thereof and haying regard to the aforesaid including to the excellent quality and the high standards of the plaintiff’s manufacture and trade under the said trademark/packaging/artwork PADAN enjoy solid, enduring and first class reputation in the markets. Readily available Sales Promotion expenses of the associate company namely COROMANDEL AGRICO PVT. LTD. from the year 2013-15 onwards is as under: Year Sales Promotion Value In Lacs (Rs.) 2013-2014 1409.26 2014-2015 1117.61 2015-2016 886.81 2016-2017 1152.34 2017-2018 184.69 2018-2019 97.56 2019-2020 66.30 2020-2021 53.94 2021-2022 06.29
31. There is no explanation as to how the aforesaid sales and advertisement expenses can be considered as that of the plaintiff. Once again, the plaintiff is assuming that the use of the mark PADAN by CAPL would amount to use by the plaintiff. Clearly, the aforesaid sales figures would not accrue to the benefit of the plaintiff and hence, it cannot claim any goodwill or reputation for the mark PADAN.
32. It is a settled position of law that any use of the mark PADAN by CAPL, being a licensee, would inure to the benefit of the defendant no.1 only. A reference in this regard may be made to the judgment in Hilton Roulunds Ltd. v. Commissioner of Income Tax[6], wherein a Division Bench of this Court made the following observations: “32. …The settled position in law is that use by a licensee would also enure to the benefit of a licensor, for it would continue to remain the owner, unless there was also part transfer of title. In this case, title and ownership of the trademark was not transferred. The appellant only had permission and approval to use the trademark. Thus, the benefit of the use of the trademark “HILTON” during the period when it stood licensed to the appellant enures to HRL. In Fedders Lloyd Corporation Ltd. v. Fedders Corporation ILR [2005] I Delhi 478, it was held use of the trademark by a licensee inures to the benefit of the licensor. This position was again reiterated by this court in Formula One World Championship Ltd. v. CIT (International Taxation) (2017) 390 ITR 199 (Delhi).”
33. Admittedly, the defendant no.1, through its predecessor, is the registered proprietor (refer ‘E-Register extract pertaining to trade mark no.255161 for the mark PADAN’ at page 393 of the documents filed with the plaint) and prior user of the mark PADAN in India (refer ‘Formulation Guide for PADAN 50% Water Soluble Powder’ dated 23rd May 1983 at page 28 of the documents filed with the plaint). The packaging of products under the mark PADAN filed by the plaintiff does not mention its name but instead bears the text ‘in association with Sumitomo Chemicals Takeda Agrico Company Limited, Japan’ (refer pages 159 to 163 of the documents filed with the plaint) which acts as a source identifier for the consumers to identify the mark PADAN with the defendant no.1 in India.
34. Therefore, upon a plain reading of the plaint, it is clear that the defendant is the registered proprietor and prior user of the mark PADAN. The plaintiff has failed to establish any goodwill or reputation in its favour for the 2018 SCC OnLine Del 8556 mark PADAN. Hence, the plaintiff has not even made out a case for passing off in its favour.
35. In order to justify the use of the mark PADAN by CAPL as its own use, the plaintiff, along with the plaint, has filed an alleged Agreement dated 6th December 2004 entered into between the plaintiff and CAPL. In terms of the said agreement, the plaintiff has allegedly given rights to CAPL to use certain trade marks, which include the mark PADAN, subject to payment of royalty. A reference may be made to one of the recitals of the said agreements, which is set out below: “And Whereas the Licensor are the registered trademark owners of the agro chemicals/products mentioned in the Schedule “A” (hereinafter called the ‘Brands’).”
36. In the aforesaid recital, the plaintiff claims to be the ‘registered trademark owner’ of the marks given in Schedule ‘A’ to the said agreement which includes the marks PADAN 4G and PADAN 50SP. However, nothing has been filed to show that the plaintiff is the registered proprietor of the said marks. In fact, it has been admitted in the plaint that the defendant no.1 is the registered proprietor of the mark PADAN. Therefore, the Agreement dated 6th December 2004 appears to be a fabricated document and was created and filed only to advance the case of the plaintiff in the present suit.
37. A holistic reading of the plaint, along with the cause of action disclosed and reliefs sought therein, would divulge that the same is vexatious and malicious in its entirety. It is legally impermissible for the plaintiff to file the present case on behalf of its group company, CAPL. The plaintiff has deliberately not filed the relevant documents relied upon in the plaint. It is an admitted position that the defendant no.1 is the registered proprietor of the mark PADAN and it gave only a non-exclusive license in favour of CAPL to use the said mark. The plaintiff was never given any right to use the mark PADAN. Further, nothing has been filed along with the plaint to show that the plaintiff has made any sales under the mark PADAN. Moreover, the alleged assignment of copyright in the aforesaid artistic work was also not in favour of the plaintiff. Therefore, there is no cause of action whatsoever in favour of the plaintiff to institute the present suit against the defendants and the cause of action alleged by the plaintiff is purely illusory.
38. Accordingly, the application filed by the defendants is allowed and the plaint is ordered to be rejected under the provisions of Order VII Rule 11 of the CPC.
39. All pending applications stand disposed of.
AMIT BANSAL (JUDGE) JULY 03, 2025 Vivek/-