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SUPREME COURT OF INDIA
WANDER LIMITED
VERSUS
ANTOX INDIA PRIVATE LIMITED
DECIDED ON: April 26, 1990
Drugs and Cosmetics Act, 1940 – Trade and Merchandise Marks Act – Section 48 and 49 – Drugs and Cosmetics Rules – Rule 69 – Appellant I, claiming to be registered proprietor of registered trademark entered into an agreement respondent which Antox agreed to manufacture vitaminised Calcium Gluconate tablets under said registered trademark and sell entire production to Wander would appear that pursuant to and in implementation of these arrangements applied for requisite manufacturing license from course processing of which Wander furnished before Drug Controller an undertaking that Wander Ltd. would not authorise its trademark by any other company and further not to manufacture either by itselt or under sole licences from it – Held, Evidence of prior user as contended by Sri Rao, Antox cannot, prima facie, explain how in a passing-off action its user subsequent would prevail over prima facie finding that Wander manufacturing Calcium Gluconate tablets trademark its own factory in Bombay from appellate bench does not dislodge this finding nor does it recognise the crucial effect of prior use by defendant on plaintiffs case in a passing-off action appears to us that it was not an appropriate case where appellate bench could have interfered with discretion exercised by learned Single Judge – Order of appellate bench is common to present suit as well as certain other proceedings between Antox on one hand and certain other parties on judgment and observations are confined to facts Civil correctness of appellate order in respect of other cases is not subject matter of these appeals and that whatever we have said shall not prejudice parties in those other proceedings – Appeal allowed.
Key Points: - The agreement dated 28/03/1986 and the licence issued under the Drugs and Cosmetics Act were central to determining the nature of Antox’s user of the trademark (!) (!) . - Antox’s user after June 1986 could not prevail over Wander Ltd.’s prima facie earlier user from August 1983, which remained unaffected by the appellate bench’s findings (!) (!) . - A passing-off action requires the plaintiff to establish prior user independently of statutory trademark registration, and this determines the right to restrain the defendant (!) (!) . - The appellate court erred in re-assessing material findings and substituting its discretion where the trial court’s discretion was not shown to be arbitrary or perverse (!) (!) . - The appeal was allowed, and the order of the division bench was set aside, restoring the single judge’s order of 2/03/1989 (!) . - The judgment and its observations are confined to Civil Suit No. 1220 of 1988 and do not prejudice other proceedings (!) .
( 1 ) APPELLANTS in these appeals, by special leave, are the defendants in Civil Suit No. 1220 of 1988 on the original side of the High court of Madras and assail the order dated 19/01/1990 of the division bench of the High court granting in appeal and in reversal of the order dated 2/03/1989 of the learned Single Judge trying the suit, aninjunction restraining appellants from passing off their medicinal product "cal-De-Ce" as that of the respondent-plaintiff. Respondent claimed to have acquired a right in that trademark by continuous user. The a temporary injunction was refused by the learned Single Judge. But in appeals, O. S. A. Nos. 111 and 112 of 1989, preferred against the refusal, the division bench granted the temporary injunction in appeal.
( 2 ) THE appeals have come up for orders on the prayer for stay. As the considerations relevant for decision on the prayer for stay, by and large, conclude the subject matter of the main appeals, we proceed to dispose of the main appeals themselves.
( 3 ) WE have heard Sri F. S: Nariman, learned senior counsel for the appellants and Sri U. N. R. Rao, learned senior counsel for the respondents. We have been taken through the orders of the learned trial Judge and of the division bench in appeal.
( 4 ) WANDER Ltd. , appellant I, claiming to be the registered proprietor of the registered trademark "cal-De-Ce" entered into an agreement dated 28/03/1986 with Antox India (P) Ltd. (Antox), the respondent, under which Antox agreed to manufacture vitaminised Calcium Gluconate tablets under the said registered trademark "cal-De-Ce" and sell the entire production to the Wander Ltd. It would appear that pursuant to and in implementation of these arrangements Antox applied for the requisite manufacturing license from the Drug Controller under the Drugs and Cosmetics Act, 1940 in the course of the processing of which Wander Ltd. furnished before the Drug Controller an undertaking that Wander Ltd. would not authorise the use of its trademark "cale-Ce" by any other company and further not to manufacture "cal-De-Ce" with effect from 1/07/1986, either by itselt or under sole licences from it. The Drug Controller issued the manufacturing license to Antox.
( 5 ) THE working of the agreement dated 28/03/1986 between the parties, however, appears to have run into serious troubles. It is not necessary to advert to the rival contentions of the parties on the merits of this controversy as they may have to be gone into by the High court in 9 the pending suit. The disputes culminated in Wander Ltd. , purporting to rescind the agreement by its notice dated 30/11/1988 and calling upon Antox to stop manufacture of "cal-De-Ce" under the trademark. It would also appear that Wander Ltd. , entered into a separate manufacturing arrangement with Alfred Berg and Co. (1 Pvt. Ltd. , appellant 2, at Madras, under licences issued to appellant 2 by the authorities administering the Drugs and Cosmetics Act, 1940 in that State.
( 6 ) IT is at this stage that the Antox came forward with the present suit and sought temporary injunction.
( 7 ) THE case of Antox is that its agreement dated 28/03/1986 with Wander Ltd. was itself void in that its object was one forbidden by law; that it would, if permitted, defeat and violate several statutory provisions and prohibitions; that the agreement thus, out of way, the undertaking furnished on 21/06/1986 by Wander Ltd. to the Drug Controller in Karnataka, had the effect, in law, of and amounted to an abandonment by Wander Ltd. of its proprietorship of the registered trademark "calde-Ce" and of all such exclusive rights as Wander Ltd. had or may have had in respect of that trademark and that the subsequent continued user of the said trademark by Antox under the Drug Controllers licence amounted to an independent user of the trademark by Antox in its own right as, indeed, according to Antox, the said trademark after its abandonment by Wander Ltd. came to be in a nascent unowned condition e
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