2001 Supreme(SC) 1633

2001(8) Supreme 558
SUPREME COURT OF INDIA
(From Gujarat High Court)
R.C. Lahoti and K.G. Balakrishnan, JJ.
Laxmikant V. Patel -Appellant
versus
Chetanbhat Shah & Anr. -Respondents
Civil Appeal Nos. 8266-8267 of 2001
(Arising out of SLP (C) Nos. 928-929 of 1999)
Decided on 4-12-2001
Counsel for the Parties :
For the Appellant : Man Mohan Singh, S.K. Verma, V.J. Trivedi, M.K. Choudhary, Ms. Ranjana Narayan, Ashutosh Kumar, Surinder Singh, Vishal Arun, Advocates.
For the Respondents : H.A. Raichura, S.H. Raichura and Shailendra Singh, Advocates.

IMPORTANT POINT
Once a case of passing off is made out the practice is generally to grant a prompt ex-parte injunction followed by appointment of local commissioner, if necessary.

Headnote:Civil Procedure Code, 1908-Order 39 Rules 1 and 2-Trade Marks Act, 1999-Passing off action by plaintiff against defendant-Plaintiff was running business of colour lab and studio in 1982 in Ahmedabad in a trade name of which Muktajivan is a part-Defendant running his colour lab under the name and style of "Gokul Studio" intending to commence business through his wife adopting the name and style of Muktajivan Colour Lab and Studio-Whether be restrained by grant of ad interim injunction? (Yes).

       Held : It is common in the trade and business for a trader or a businessman to adopt a name and/or mark under which he would carry on his trade or business. According to Kerly (Law of Trade Marks and Trade Names, Twelfth Edition, para 16.49), the name under which a business trades will almost always be a trade mark (or if the business provides services, a service mark, or both). Independently of questions of trade or service mark, however, the name of a business (a trading business or any other) will normally have attached to it a goodwill that the courts will protect. An action for passing-off will then lie wherever the defendant company s name, or its intended, name, is calculated to deceive, and so to divert business from the plaintiff, or to occasion a confusion between the two businesses. If this is not made out there is no case. The ground is not to be limited to the date of the proceedings; the court will have regard to the way in which the business may be carried on in the future, and to its not being carried on precisely as carried on at the date of the proceedings. Where there is probability of confusion in business, an injunction will be granted even though the defendants adopted the name innocently. (Para 8)

       In an action for passing off it is usual, rather essential, to seek an injunction temporary or ad-interim. The principles for the grant of such injunction are the same as in the case of any other action against injury complained of. The plaintiff must prove a prima facie case, availability of balance of convenience in his favour and his suffering an irreparable injury in the absence of grant of injunction. (Para 13)

        In the present case the plaintiff claims to have been running his business in the name and style of Muktajivan Colour Lab and Studio since 1982. He has produced material enabling a finding being arrived at in that regard. However, the trial court has found him using Muktajivan as part of his business name at least since 1995. The plaintiff is expanding his business and exploiting the reputation and goodwill associated with Muktajivan in the business of Colour Lab and Photo by expanding the business through his wife and brother-in-law. On or about the date of the institution of the suit the defendant was about to commence or had just commenced an identical business by adopting word Muktajivan as a part of his business name although till then his business was being run in the name and style of Gokul Studio. The intention of the defendant to make use of business name of the plaintiff so as to divert his business or customers to himself is apparent, it is not the case of the defendant that he was not aware of the word Muktajivan being the property of the plaintiff or the plaintiff running his business in that name though such a plea could only have indicated the innocence of the defendant and yet no difference would have resulted in the matter of grant of relief to the plaintiff because the likelihood of injury to the plaintiff was writ large. It is difficult to subscribe to the logic adopted by the Trial Court, as also the High Court, behind reasoning that the defendants business was situated at a distance of 4 or 5 kms. from the plaintiff s business and therefore the plaintiff could not have sought for an injunction. In a city a difference of 4 or 5 Kms. does not matter much. In the event of the plaintiff having acquired a goodwill as to the quality of services being rendered by him a resident of Ahmedabad city would not mind travelling a distance of a few kilometers for the purpose of availing a better quality of services. Once a case of passing off is made out the practice is generally to grant a prompt ex-parte injunction followed by appointment of local Commissioner, if necessary. In our opinion the trial court was fully justified in granting the ex-parte injunction to the plaintiff based on the material made available by him to the court. The Trial Court fell in error in vacating the injunction and similar error has crept in the order of the High Court. The reasons assigned by the Trial Court as also by the High Court for refusing the relief of injunction to the plaintiff are wholly unsustainable. (Para 14)

       The discretion exercised by the Trial Court and the High court against the plaintiff, is neither reasonable nor judicious. The grant of interlocutory injunction to the plaintiff could not have been refused, therefore, it becomes obligatory on the part of this Court to interfere. (Para 17)

       Held consequently : For the foregoing reasons these appeals are allowed. An ad-interim injunction under Rules 1 and 2 of Order 39 of the CPC shall issue in favour of the plaintiff-appellant restraining the defendant-respondents from using directly or indirectly the word Muktajivan in their trade name associated with the business and services of colour lab and studio and any other similar word or name which may be identical or deceptively similar to the plaintiff s trade name. The plaintiff-appellant shall be entitled to costs throughout incurred upto this stage. (Para 18)