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IN THE HIGH COURT OF BOMBAY
S.H. Kapadia, J.
ESSEL Packaging Ltd. others ..... Plaintiffs.
Versus
ESSEL Tea Exports Ltd. others .... Defendants.
Notice of Motion No. 2371 of 1993 in Suit No. 3803 of 1993, decided on 8-7-1997.
Advocates appeared :
Virendra Tulzapurkar i/b S.D. Phatarphekar, for plaintiffs.
By way of affidavit in reply to the Notice of Motion, it is contended an behalf of the defendants vide clause (ii) that in or about 1985 many persons in the State of West Bengal commenced business of tea plantations. The defendants started acquiring land suitable far starting the plantation and from time to time they acquired 75 Hectares of land with the intention of setting up tea plantation and making tea for expart, According, to the Affidavit in reply filed by Chairman of the defendants. Company Samarilal Agarwalla, in order to ensure that the name of the defendants Company reflects the Companys business. The Directars of the defendants i.e. Samarial Agarwalla and the brother thought of changing the name from Bensisons Tea Exports Ltd. to Essels Tea Exparts Ltd. and they thought of the ward ESSEL because it was derived from the name of the Chairman of the defendants and Samarlal Agarwalla, According to the said affidavit the letter ESS part of the ward ESSEL appearing in the name of the defendants is the first character of the names while the ward EL being part of the ward Essels is the first character .of the ward Lal meaning thereby Samar Lal s Accordingly it is the case of the defendants that the ward Essels has been adopted in 1985 honestly, bona fide, without not notice or knowledge of the fact that the said ward Essel it being used by any person other than the defendants as part of their carp orate name and style .or as a trade mark.
In the present case also, one of the paints which arises far determination is the controversy pertaining to common field by activity. It is the case of the defendants herein that they are in the Tea Export Business. It is also contended that even one of the Companies which is in the Tea Export Business does not bear the name ESSEL and in the circumstances, the plaintiffs are not entitled to an interim injunction in passing off action. This argument was also advanced in the case of Kirloskar Diesal Recon. Pvt. Ltd. case that it was rejected by Jhunjhunuwala, J. by observing that the expression common field of activity is not conclusive for deciding whether there can be a passing off action although at one paint of time the said test was treated as conclusive, with the passage of time the law on requirement of common filed of activity in a passing of action has radically undergone a change and, according to the learned Single Judge there is no requirement for a common filed of activity to found a claim in passing off because the real question in each of such cases is whether there is as a result of misrepresentation, a real likelihood of confusion or deception of the public and consequent damage to the plaintiff is likely to be caused and if that is the test then the focus is shifted from the external objective test of making comparison of activities of parties to the state of mind of public in deciding whether it will be confused. Applying the test of misrepresentation the Single Judge Jhunijunuwala, J., observed that the business activity of the plaintiffs, namely Kirloskar Group of Companies which vary from pin to piano as borne out from the object clauses of the memorandum of Association is likely to create confusion if the defendants business activities are allowed to be carried out in the name of Kirloskar Diesel Recon Pvt. Ltd. because in the case of trading name which has become almost a household word and under which trading name a variety of activities are undertaken a passing off can successfully lie if the defendant has adopted identical or similar trading name.
In the case of Bajaj Electricals Ltd. v. Metals and Allied Products, reported in AIR 1988 Born 157, the Division Bench of this Court while granting injunction has observed that it is always in the interests of fair trading and in the interests of all who may wish to buy or to sell goods, the law recognises that certain limitations upon freedom of action are necessary and desirable. In some situations the law had to resolve that might at first appear to be conflicts between competing right. In solving the problems which have arisen there has been no need to resort to any abstract principles but rather, to the straight forward principle that trading must not even unintentionally be unfair.
Now applying the test made put by the above two decisions of this Court to the facts of present case, the letters referred to hereinabove clearly indicate that the members of the public have been misled by the use of the word Essel in the corporate name of defendants Essel Tea Exports Ltd. Apart from the letters, issuance of advertisement inviting public to participate in the issuance of shares and photograph of the advertisement issued by the Directors of the defendants clearly indicate that the above tests laid down by the this Court are fully satisfied.
Sections 30 and 106-See Civil Procedure Code, 1908, Order XXXIX, Rules 1 and 2.
Section 106-Suit for permanent injunction from using word ESSEL to pass off-Common field of activity-Whether conclusive for decision-Held, No.--One of the points which arises for determination is the controversy pertaining to common field by activity. It is the case of the defendants that they are in Tea Export Business wherein the Group of Companies of the plaintiffs are not in Tea Export Business. It is also contended that even one of the companies which is in the Tea Export Business does not bear the name ESSEL in the circumstances, the plaintiffs are not entitled to an interim injunction in passing off action. This argument was also advanced in the case of Kirloskar Diesel Recon. Pvt. Ltd. (supra) and it was rejected by Jhunjhunuwala J. by observing that the expression common field of activity is not conclusive for deciding whether there can be a passing off action although at one point of time the said test was treated as conclusive. With the passage of time the law on requirement of common field of activity in a passing of action has radically undergone a change and, according to the learned single Judge there is no requirement for a common field of activity to found a claim in passing of because the real question in each of such cases is whether there is, as a result of misrepresentation, a real likelihood of confusion or deception of the public and consequent damage to the plaintiffs is likely to be caused and if, that is the test then the focus is shifted from the external objective test of making comparison of activities of parties to the .state of mind of public in deciding whether it will be confused. Applying the test of misrepresentation, the learned single Judge Jhunjhlmuwala, J. observed that the business activity of the plaintiffs, namely, Kirloskar Group of Companies which vary from pin to piano as borne out from the object clauses of the Memorandum of Association is likely to create confusion if, the defendants business activities are allowed to be carried out in the name of Kirloskar Diesel Recon. Pvt. Ltd. because in the case of trading name which has become almost a household word and under which tracing name a variety of activities are undertaken, a passing off can successfully lie if, the defendant has adopted identical or similar trading name.
In the case f Bajaj Electrical Ltd. v. Metals & Allied Products, reported in AIR 1988 Bom 157, the Division Bench of this Court while granting injunction has observed that it is always in the interest of fair trading and in the interests of all who may wish to buy or to sell goods, the law recognises that certain limitations upon freedom of action are necessary and desirable. In some situations, the law had to resolve what might at first appear to be conflicts between competing right. In solving the problems which have arisen there has been no need to resort to any abstract principles but, rather, to the straightforward principle that trading must not only be honest but, must not even unintentionally be unfair.
Now, applying the test made out by the above two decisions of this Court to the facts of case, the letters referred to hereinabove dearly indicate that the members of the public have been misled by the use of the word ESSEL in the corporate name of the defendants Essel Tea Exports Ltd. Apart from the letters, issuance of advertisement inviting public to participate in the issuance of shares and photograph of the advertisement issued by the Directors of the defendants dearly indicate that the above tests laid down by this Court are fully satisfied. The facts have been narrated at length by this Court in earlier paragraphs.
2.The above suit has been filed for permanent injunction to restrain the defendants herein from using the word "ESSEL" as part of the corporate name of the defendants---Essels Tea Exports Limited. The suit is for permanent injunction restraining the Defendants from using the word "ESSEL" to pass off or enable others to pass off the goods and or business of the plaintiffs. The plaintiffs have applied for grant of injunction in terms of prayers (a) and (b) of the Notice of Motion which reads as follows:-
"(a) that pending the hearing and final disposal of the suit, the Defendants by themselves, their servants and agents or otherwise howsoever be restrained by a perpetual order and injunction of this Honourable Court from in any manner using the word ESSEL as part of their corporate name and/or trade name and/or trade mark in order to pass off or enable others to pass off their business or goods as and for those of the plaintiffs."
"(b) that pending the hearing and final disposal of the suit the Defendants by themselves, their servants and agents or otherwise howsoever be restrained by a perpetual order and injunction of this Honourable Court from in any manner using in relation to any of their business, goods and/or services the word or mark ESSEL or any other word or mark deceptively similar to the plaintiffs mark and/or style ESSEL so as to pass off the defendants' business, goods and services as and for those of the plaintiffs."
3.Briefly stated the facts of the dispute are as follows:---
4.The 1st plaintiffs are a company incorporated under the Companies Act, 1956. The first plaintiffs were incorporated on 22nd December 1982. The first plaintiffs carry on business inter alia of manufacturing packaging materials.
5.The 2nd plaintiffs are a company incorporated under the Companies Act, 1956. The 2nd plaintiffs were incorporated in the name of ESSEL's Amusement Parks (India) Limited on 7-7-1987. Subsequently, from 20-4-1992, their name was changed from ESSEL's Amusement Park (India) Limited to Pan India Paryatan Limited. The 2nd plaintiffs carry on the business through and in the name of two divisions, namely, "ESSEL Vision" and "ESSEL WORLD Consultancy Services". ESSEL Vision carries on business of film production, distribution etc. ESSEL WORLD Consultancy Services carry on business of providing know how for setting up amusement parks etc. The 2nd plaintiffs are the proprietors of well-known Amusement Park in Bombay by the name "ESSEL WORLD".
6.Plaintiffs No. 3 are the company incorporated under the Companies Act, 1956. Plaintiffs No. 3 were incorporated on 24-8-1978 initially as a Private Company. On 4-1-1989. plaintiffs No. 3 became a public company. Plaintiffs No. 3 carry on business of export of various items such as tea, coffee, food grains etc. Plaintiffs No. 3 have also applied for registration of the word "ESSEL" as trade mark for edible articles for human consumption which covers tea, coffee, etc. under Indian Trade and Merchandise Marks Act, 1958. The said application is pending. In the said application, user of the mark is claimed from January 1993 as the plaintiffs No. 3 have been using the same since 1993.
7.Plaintiffs No. 4 are a partnership Firm whose partners are the family members/close relatives of the promoters of plaintiffs 1 to 3.
8.Defendants were incorporated on 8-9-1987 under the name and style of Bansisons Beverages Private Limited which was subsequently on or before 19-5-1992 changed to the present name, namely, ESSEL Tea Exports Limited (hereinafter referred to for the sake of brevity as the "impugned name").
9.Some time in September 1993, the plaintiffs came to know about this fact of change of name by the defendants from Bansisons Beverages Private Limited to Essels Tea Exports Limited. The circumstances under which they came to know are indicated by congratulatory letters addressed by some of the friends to the plaintiffs.
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