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High Court Of Delhi
K.G.KHOSLA COMPRESSORS PRIVATE LIMITED - Appellant
Versus
KHOSLA EXTRAKTING LIMITED - Respondent
Interim Application 631 of 1985
Decided On : 06/19/1985
Khosla Extraktions Ltd. (Defendant No. 1) was registered under the Companies Act, 1956, with a name similar to that of the plaintiff company, K. G. Khosla Compressors Ltd. The plaintiff filed a suit seeking a permanent injunction restraining the defendants from using, trading, or carrying on business under the name Khosla Extraktions Ltd. and from making a public issue under this name. The plaintiff claimed that the use of the word "khosla" in the defendant's name was an infringement of its trademark and goodwill and would cause confusion among the public. The defendants argued that they had a right to use their own name in their business and that the plaintiff's suit was not maintainable. The court held that the plaintiff had a prima facie case and granted an injunction restraining the defendants from entering the capital market and making a public issue under the name Khosla Extraktions Ltd.
Fact of the Case:
The plaintiff, K. G. Khosla Compressors Ltd., is a pioneer in the field of air compressors industry in India and has a reputation and goodwill in the market. The defendants, Khosla Extraktions Ltd. and its promoters, were former employees of the plaintiff. The defendants formed Khosla Extraktions Ltd. with the intention to encash the name, reputation, and goodwill of the plaintiff. The defendants used the word "khosla" in their company's name and in their advertisements, which created confusion among the public.
Finding of the Court:
The court held that the plaintiff had a prima facie case and granted an injunction restraining the defendants from entering the capital market and making a public issue under the name Khosla Extraktions Ltd. The court found that the defendants' use of the word "khosla" in their company's name was an infringement of the plaintiff's trademark and goodwill and would cause confusion among the public. The court also held that the plaintiff's suit was maintainable and that the defendants did not have a right to use their own name in their business in a way that would infringe the plaintiff's trademark and goodwill.
Issues: 1. Whether the defendants' use of the word "khosla" in their company's name was an infringement of the plaintiff's trademark and goodwill? 2. Whether the defendants' actions were likely to cause confusion among the public? 3. Whether the plaintiff's suit was maintainable? 4. Whether the defendants had a right to use their own name in their business in a way that would infringe the plaintiff's trademark and goodwill?
Ratio Decidendi: The court held that the defendants' use of the word "khosla" in their company's name was an infringement of the plaintiff's trademark and goodwill and would cause confusion among the public. The court also held that the plaintiff's suit was maintainable and that the defendants did not have a right to use their own name in their business in a way that would infringe the plaintiff's trademark and goodwill. The court relied on the following legal principles:
Final Decision: The court granted an injunction restraining the defendants from entering the capital market and making a public issue under the name Khosla Extraktions Ltd. The court also awarded costs to the plaintiff.
( 1 ) THE plaintiff, a public limited company, has filed this suit praying for a decree of permanent injunction restraining the defendants from using, trading or carrying on business under the name and style of M/s Khosla Extraktions Limited and or making public issue under this name. There are three defendants. Defendant No. 1 is, of Extraktions Ltd. and Others. course, M/s Khosla Extraktions Ltd. Defendants Nos. 2 and ? are stated to be the promotors and Directors of defendant No. 1. Defendant No. 2 Naresh Chandra Bansal and defendant No. 3 is S. K. Khosla. With this suit the plaintiff filed an application under Order 39, Rules I and 2 of the Code of Civil Procedure, praying that during the pendency of the suit, the defendants be similarly restrained from using, trading and carrying on business and from entering the capital market and making public issue under the name M/s Khosla Extraktions Ltd.
( 2 ) THE pleadings in, the case are complete. Considerable arguments were addressed by both the parties, on the application which I am now to decide.
( 3 ) THE case of the plaintiff is that it is a pioneer in the field of air compressors industry in India and is a company of rational and international repute and standard. It came into existence in 1945 and in time grew into a dynamic group of diversified companies and this group is now registered under the Monopolies and Rejstrictive Trade Practices Act. Four companies are named in the plaint which are stated to be registered under the MRTP Act and are known in the capital market as khosia Group of Companies . The names of these companies are : 1. K. G. Khosla Compressors Ltd 2. Khosla Foundry Limited. 3. Khosia Indair Limited. 4. Prashant Khosla Pneumatics Ltd. " It is stated that the value of gross assets of this group is around Rs. 38 crores. Gross profits are stated to be over Rs. 2. 69 crores and profits after tax are over Rs. I crore. Branches of the plaintiff are stated to be located all over the important cities in India. It is then stated that the plaintiff is the only comply with the word khosla in its name and by this name it is quoted in the stock exchanges in. India. The Khosla shares are very active and popular in the capital market and presently shares of the plaintiff of the face value of Rs. 10 are quoted at around Rs. 50. It is stated that whenever the word KHOSLA is used in the capital market it invariably is attributed to the plaintiff. The aforesaid four companies are known in the capital market as khosia Group or khosla Group of Companies and the name and family of khosla have become identified with the outstanding financial results and returns. It is then stated that the Khosla family connected with these companles is settled in New Delhi. K. G. Khosla, who is the Chairman of three of the aforesaid companies, and his family are settled in Delhi for needy six decades. Then it is stated that K. G. Khosla is well-known in business circles and had been holding various positions in, various organisations. It is further stated that the word KHOSLA is also the registered trade mark of the plaintiff and is used on the products of the plaintiff and the word KHOSLA is also the logo of the plaintiff and is frequently used in the advertisements, pamphlets and publications of the plaintiff. It is registered under the Copyright Act as well as an artistic word and the plaintiff has copyright over it.
( 4 ) THE plaintiff then states that defendants Nos. 2 and 3 were its former employees. Defendant No. 3 left the service of the plaintiff in 1983 and defendant No. 2 in 1984. In December 1983, they both formed a company under the name New Delhi Equipment Leading Company Ltd. which was registered under the Companies Act, 1956 (for short the Act ), but they failed to establish the business of this company as they could not sell the shares of this company to the general public. Then, with a view to play fraud and deception on the investing public and enc
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