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Delhi High Court
H. L. ANAND
Chandra Bhan Dembla Trading, Delhi - Appellant
Versus
Bharat Sewing Machine Co., Bikaner - Respondent
I.A. Nos.968 and H94 of 1981
Decided On : 10/30/1981
TRADEMARK - STAY OF SUIT - RECTIFICATION PROCEEDINGS - INJUNCTION - JURISDICTION - DELAY - MISREPRESENTATION - BALANCE OF CONVENIENCE - ACCOUNTING.
Fact of the Case:
Plaintiff, an Ex-serviceman, filed a suit alleging infringement of trademark and passing off against the defendant, who also manufactured and marketed sewing machines with identical trademarks. The plaintiff sought an injunction to restrain the defendant from using the trademarks 'Sainik' and 'Harsha'. The defendant opposed the injunction and sought a stay of the suit under Section 111 of the Trade and Merchandise Marks Act, 1958, on the ground of pendency of rectification proceedings in respect of the plaintiff's trademarks.
Finding of the Court:
The court held that the suit was liable to be stayed under Section 111 of the Act as both parties were registered owners of the identical trademarks and rectification proceedings were pending before the Registrar of Trademarks and in the court. The court also held that the plaintiff was not entitled to an injunction as the suit suffered from a fatal infirmity of lack of jurisdiction in respect of the trademark 'Sainik', the newspaper advertisement on which the interim order was issued was a local Bikaner paper with no circulation outside that territory, and there was a delay of six years in seeking protection by a restraint order. The court further held that the plaintiff's conduct in relation to the proceedings, including concealing the fact of the notice and pendency of criminal proceedings, disentitled him to any protection. The court also found that the defendant had been using the trademarks earlier than the plaintiff and that the plaintiff's marketing was confined to the Canteen Stores Department, while the defendant had a wider market.
Issues: 1. Whether the suit is liable to be stayed owing to the pendency of rectification proceedings? 2. Whether the defendant should be restrained from the use of the two trademarks in relation to sewing machines as an interim measure?
Ratio Decidendi: 1. The court held that the suit was liable to be stayed under Section 111 of the Trade and Merchandise Marks Act, 1958, as both parties were registered owners of the identical trademarks and rectification proceedings were pending before the Registrar of Trademarks and in the court. 2. The court held that the plaintiff was not entitled to an injunction as the suit suffered from a fatal infirmity of lack of jurisdiction in respect of the trademark 'Sainik', the newspaper advertisement on which the interim order was issued was a local Bikaner paper with no circulation outside that territory, there was a delay of six years in seeking protection by a restraint order, and the plaintiff's conduct in relation to the proceedings disentitled him to any protection.
Final Decision: The court dismissed the plaintiff's application for injunction and vacated the interim injunction granted earlier. The court also allowed the defendant's application and stayed the proceedings in the suit. However, the defendant was directed to maintain regular accounts of the dealings in the sewing machines under any of the above trademarks and file a quarterly statement of account in the court.
ORDER :- By I.A. 968/81, plaintiff in a suit based on allegations of infringement of trademark and of passing off, seeks to restrain the defendant from manufacturing, selling, advertising and offering for sale sewing machines under the trademarks 'Sainik' and 'Harsha'. The defendant opposes the plea for injunction and, by I.A. 1794/81, seeks to have the suit itself stayed u/s.111 of the Trade and Merchandise Marks Act, on the ground of pendency of rectification proceedings in respect of the plaintiff's trademarks.
2. Parties have been manufacturing and marketing sewing machines with the identical trademarks 'Samik' and 'Harsha'. Parties are at variance as to whose user has been earlier in point of time to the other. Parties are, however, agreed that both the parties are registered users of the trademarks, the use and registration of the trademark 'Sainik', in favour of defendant, being confined to the State of Rajasthan, Parties also assail the validity of the registration of each other in respect of both the marks and are agreed that proceedings for rectification, at the instance of both the parties, are pending before the Registrar as also in this Court. It is a common case of the parties that the defendant never manufactured or marketed sewing machines with the trademark 'Sainik' in the Union Territory of Delhi or elsewhere than the State of Rajasthan, but the same was advertised in a local Rajasthan paper, which could also be sent for through the dealer in Delhi and had, in fact, been obtained by post by the plaintiff. It is not disputed that but for the advertisement contained in the said paper, there would be no jurisdiction in this Court to deal with the action for infringement and passing off in relation to the trademark 'Sainik' because no part of the cause of action ever arose within this jurisdiction, other than the physical existence of the newspaper and the defendant admittedly carries on business in Bikaner, within the State of Rajasthan. It was also, by and large, admitted that the dealings of the plaintiff in the aforesaid sewing machines with one or the other of the trademarks aforesaid were confined to the Army authorities, presumably because the plaintiff happens to be an Ex-serviceman. An interim injunction restraining the defendant from using the trademark 'Sainik' was granted by this Court on April 7, 1981 and continues to operate. This was based on the issue of the aforesaid newspaper. A similar injunction in respect of 'Harsha' was impliedly turned down.
3. Two questions arise for decision. One is whether the suit is liable to be stayed owing to the pendency of rectification proceedings and the second is, if the defendant should be restrained from the use of the two trademarks in relation to sewing machines as an interim measure and alternatively, if any other appropriate order be made to do justice between the parties during the pendency of the suit.
4. As for the question of stay, the position appears to be quite simple. Both the parties are registered owners of the identical trademarks. The trademarks in favour of one are under challenge by the other. Rectification proceedings in respect of the registration of the trademark 'Sainik' in favour of the plaintiff were pending before the Registrar of Trademarks, New Delhi, even before the institution of the suit and the factum of pendency is admitted in the plaint in terms. The proceedings for the rectification of registration in respect of 'Harsha' were filed subsequently and are pending in this Court. Plaintiff has also admittedly challenge the subsisting registration in favour of the defendants and these are pending in this Court. True, one of the rectification proceedings was filed subsequent to the institution of the suit but in view of sub-sec. (3) of S.111 of the Trade and Merchandise Marks Act, 1958, once such proceedings are filed, for the purpose of stay the fact that they are subsequent to the suit would be immaterial. In view of the cont
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