Delhi High Court: In an application filed by the plaintiff under Order 39 Rules 1 and 2 of the Civil Procedure Code, 1908, C. Hari Shankar, J.*, opined that in order to maintain a plea of passing off against the defendant, the plaintiff would have to establish that between 2000 and 2005, the user of the mark ‘Khadi’ for soaps had not only commenced, but had also gained considerable goodwill and reputation. However, no such material was forthcoming. Further, the Court opined that the considerations of balance on convenience and irreparable loss would also be against the grant of injunctive interlocutory relief to the plaintiff at the present stage. The Court opined that even if one were to regard the defendant’s claim to user of its mark since, 2001 as arguable, the undeniable fact remained that the mark was registered in Defendant 1’s favour since 2005. It was only a decade and half later, that the plaintiff filed an application seeking cancellation of the defendants’ mark. During that time, the defendants’ business in ‘Girdhar Khadi’ mark had grown by leaps and bounds. Thus, the Court opined that the grant of interlocutory injunction, restraining the use of ‘Girdhar Khadi’ and ‘BR Khadi’ marks by the defendants was declined.
Background
In an instant case, Khadi and Village Industries Commission, the petitioner was constituted in 1957 under Khadi and Village Industries Commission Act, 1956 (‘KVIC Act’). Since it’s constitution, the plaintiff had been carrying out the work related to implementation of programs for the development of Khadi and other related industries in rural areas. In the process, products which had the trade mark ‘Khadi’, were being promoted by the plaintiff. The plaintiff also implemented the Prime Minister’s Employment Generation Program (‘PMEGP’) for upliftment and improvement of artisans, weavers and other members of small-scale village and rural industries.
On 25-09-1956, the plaintiff adopted the trade mark KHADI in variety of classes and for a variety of goods and services continuously and without interruption. The plaintiff authorised various retail sellers and other institutions to sell the products under the KHADI trade marks and in order to be listed as an authorised user of Khadi trade marks, an organisation had to apply for recognition through the Khadi Institutions Registration and Certification Sewa (‘KRICS’), and when an appropriate certification was issued by the plaintiff, then the entity was authorised to use the plaintiff’s trade mark. The plaintiff asserted that the ‘Khadi’ trade marks had acquired immense reputation and goodwill and had become the plaintiff’s source identifiers.
Further, Girdhar Industries, Defendant 1 was the proprietor of the registered trade mark ‘Girdhar Khadi’ since 2001. Thus, the plaintiff filed the present application under Order 39 Rules 1 and 2 of the CPC, seeking interlocutory injunctive reliefs of its registered trade marks and passing off by the defendant of its products as the plaintiffs products. The defendants had contended that they were using the words ‘Girdhar’ and ‘Khadi’ in a combination and were not using ‘Khadi’ separately or in a singular manner.
Analysis, Law, and Decision
The Court opined that without entering into the aspect of deceptive similarity or infringement as per Section 29 of the Trade Marks Act, 1999 (‘the TM Act’), the plaintiff was prima facie not entitled to interim relief. The Court opined that the defendant’s ‘Girdhar Khadi’ trade mark was registered in his favour. There could be no finding of infringement against a registered trade mark, unless the registration was invalid and, there was no prima facie basis to hold that the registration of the defendants mark was invalid. Further, the Court opined that no case of passing off could lie against the defendants as, the plaintiff had to prove that prior to the adoption of the defendants’ mark, the plaintiff had the goodwill and reputation in the asserted mark, for the asserted good. The Court opined that there no prima facie evidence that the plaintiff’s mark had acquired goodwill or reputation for soaps, prior to 2001.
The Court opined that for a passing off action to legitimately lie, the existence of pre-existing goodwill and reputation, prior to the commencement of user of the impugned marks by the defendant was indispensable. The Court further opined that “the terminus ad quem, by which date the plaintiff has to prove the acquisition of the goodwill and reputation for a plea of passing off to succeed, was the date of commencement, by the defendant of the rival mark.” Thus, the goodwill or reputation acquired by the plaintiff, in the asserted mark, after that date, was of no consequence.
Further, the Court opined that prima facie, there was a lack of forthrightness, on the plaintiff’s part which disentitled him to equitable relief. The Court stated that the plaintiff stated that they became aware of the defendants’ registered mark in December, 2020, whereas, when the plaintiff filed an opposition to Defendant 1’s application for registration of the trade mark, Defendant 1, in its counter-statement, disclosed about its earlier registration. The Court opined that this fact was completely suppressed in the plaint and the allegations to this effect was also not available in the plaintiff’s replication.
The Court observed that the right to seek any remedy against infringement of ‘Khadi’ trade mark would be available to the plaintiff only on or after 27-11-2014. However, prior to that date, the impugned ‘Girdhar Khadi’ mark was already registered in Defendant 1’s favour and there was no evidence of user by the plaintiff of the ‘Khadi’ mark for soaps or detergents prior to March 2005. The Court opined that even if there had been any such evidence, the plaintiff would still not be entitled to maintain a claim of infringement against the defendant’s mark, as it was registered prior in point of time.
The Court opined that while, textually the TM Act prescribed any infringement suit against a registered trade mark, such a suit would be maintainable if the Court was satisfied that the defendant’s registration was invalid. The Court, while arriving at such a decision would have to bear in mind Section 31(1) of the TM Act, which treated the very factum of registration as prima facie evidence of its validity.
The Court further opined that the considerations of balance on convenience and irreparable loss would also be against the grant of injunctive interlocutory relief to the plaintiff at the present stage. The Court opined that even if one were to regard the defendant’s claim to user of its mark since, 2001 as arguable, the undeniable fact remained that the mark was registered in Defendant 1’s favour since 2005. It was only a decade and half later, that the plaintiff filed an application seeking cancellation of the defendants’ mark. During that time, the defendants’ business in ‘Girdhar Khadi’ mark had grown by leaps and bounds.
The Court noted that the both ‘Girdhar Khadi’ and ‘BR Khadi’ marks were challenged and opined that, as per the plaint, there were no sales of good bearing ‘BR Khadi’ mark and even in the written statements, examples of the use of only ‘Girdhar Khadi’ mark was provided. Even if it were to be assumed that the defendants were using the ‘BR Khadi’ mark, no prima facie case for injunction against such use could be said to exist in the plaintiff’s favour as, except for the finding regarding suppression of fact, the findings related to the ‘Girdhar Khadi’ mark, would apply mutatis mutandis to the prayer for injuncting use of the ‘BR Khadi’ mark as well.
Thus, the Court opined that the grant of interlocutory injunction, restraining the use of ‘Girdhar Khadi’ and ‘BR Khadi’ marks by the defendants was declined.
[Khadi and Village Industries Commission v. Girdhar Industries, 2023 SCC OnLine Del 8446, decided on 28-12-2023]
Advocates who appeared in this case:
For the Plaintiff: Shwetasree Majumder, Diva Arora, Devyani Nath and Archita Nigam, Advocate;
For the Defendants: Shrawan Bansal and Kankaran Singh, Advocates.
*Judgment authored by- Justice C. Hari Shankar