2016 Supreme(Raj) 929

IN THE HIGH COURT OF RAJASTHAN
Arun Bhansali, J.
M/s. Perry Beverages India Private Limited – Appellant
Versus
Mr. Bharat Chandiramani S/o Bhojraj Chandiramani – Respondent
Civil Misc. Appeal No. 263 of 2016
Decided On : 29-09-2016

The trial court erred in passing an order beyond the pleadings and case set up by the plaintiff and in granting an injunction regarding use of similar bottles without any material available on record regarding the design of the plaintiff's bottle.

Headnote:

TRADE MARK - INJUNCTION - SIMILARITY - PASSING-OFF - VALIDITY OF ASSIGNMENT - INTERPRETATION OF FAMILY ARRANGEMENT - SCOPE OF INJUNCTION - JUDICIAL DISCRETION - REMAND:

Fact of the Case:

Bharat Chandiramani ('Bharat') filed a suit against Perry Beverages India Pvt. Limited ('Perry Beverages') and Hemant Chandiramani ('Hemant') as Director of Perry Beverages under Section 134 of the Trade Marks Act, 1999 ('the Act') for permanent injunction. Bharat claimed that Perry Beverages was a family company whose head was Bhojraj, the two sons Hemant & Bharat used to mainly look after the business of the company; the arrangement continued till 2014; on intention being expressed by members of the family to start independent business, Bhojraj proposed that a family settlement be executed wherein every member of the family would get his share and arrangement regarding the brand developed by Bhojraj be also made in the said settlement. As per the family settlement, the plaintiff relinquished his share holding in Perry Beverages resulting in two share holders Bhojraj & Hemant remaining in the company, Bhojraj is the Managing Director and Hemant is Director. Before execution of family settlement it was decided that the entire business of Perry Beverages would be looked after by Bhojraj and Hemant and Perry Beverages would have right to manufacture all the drinks except 'Fruit Beer' it was decided that Perry Beverages would not have any right to manufacture 'Fruit Beer' or any drink having flavour similar to 'Fruit Beer' and all the rights with regard to 'Fruit Beer' would be with the plaintiff. Hemant accepted the said arrangement; when the issue regarding executing the said arrangement in writing came up, Hemant proposed that he would get the document prepared, in the meanwhile Bhojraj fell ill and was required to be hospitalized, Hemant brought the document for signatures, after reading the document Bhojraj told Hemant that oral conditions agreed in relation to 'Fruit Beer' have not been incorporated in the document and, therefore, amended document be got prepared, however, Hemant told that whatever has been decided orally would be followed and if the document was not signed by all the parties, he would take steps. It is claimed that on account of family circumstances, the agreement was signed. Bharat claimed that as per the agreement, Perry Beverages could not have manufactured any product similar to 'Fruit Beer', despite that it was doing the same which was not legal and the same amounts to passing-off and the plaintiff was entitled to injunction. It was then claimed that as per the family arrangement, the trade mark 'Fruit Beer' would be transferred to Bharat and in future the same would be owned by him and in consideration Hemant/Perry Beverages would have right to produce 'Black Horse', 'Perry Drink', 'Dr. Masala', 'India King Soda' and 'India King Water'. It was indicated that trade mark 'Perry's Fruit Beer' is a registered trade mark, which was got registered by Bhojraj under the then Trade Marks Act, 1958, which has been renewed from time to time and last renewal is up to 2020. It was further claimed that Hemant by Assignment Deed transferred the said trade mark in favour of Bharat and Rs.50,000/- was paid vide cheque dated 30.12.2014. It was clarified in the Assignment Deed that in future the defendants would not use the trade mark 'Fruit Beer' in any form and would not sell the said product in a similar bottle. Copy Right of the label pertaining to product 'Fruit Beer' was also got registered by Bhojraj, which was also transferred to Bharat by way of Assignment Deed dated 1.2.2015 and since then under the Trade Mark Assignment Deed and Copyright Assignment Deed, the product 'Fruit Beer' is being held by the plaintiff and no one else is entitled to use the trade mark or copy the label. It was alleged that recently it came to the notice of the plaintiff that after the family arrangement, the bottles which were left out in the factory, the defendants were filling product similar to the plaintiff's product and were deceiving the consumers by claiming the same as 'Perry's Fruit Beer' and on account of deception the consumers are purchasing the same resulting in loss of business to the plaintiff. A legal notice dated 26.5.2015 was sent to the defendants, to which an incorrect reply dated 26.6.2015 was given by Hemant, wherein, it was claimed that defendants were not using the trade mark 'Fruit Beer' and was using 'Fruit Scotch' on its product and the same was not violation of trade mark. It was alleged that the bottles in which the defendants were selling the product 'Fruit Scotch' is similar to the bottles being used by the plaintiff and by use of words 'Fruit Scotch' the defendants were deceiving the consumers and the same are being purchased by them by treating it as 'Perry's Fruit Beer', which amounts to passing-off and is in violation of plaintiff's trade mark and, therefore, the plaintiff was entitled to permanent injunction against the defendants. It was claimed that the cause of action arose on 20.5.2015.

Finding of the Court:

The trial court passed an order directing the defendants not to use the word “Perry” on the bottles similar to the plaintiff’s product. The court found that the bottles of plaintiff’s and defendants’ product were similar and that the word “Perry” indicated on the bottles and design of the bottles are similar to the plaintiff’s product by which consumers are confused that the product is that of the plaintiff as on the product except for the word “Perry” nothing is indicated, in those circumstances prima facie case is in favour of the plaintiff, issues pertaining to balance of convenience and irreparable injury was also held in favour of the plaintiff and order, as noticed hereinbefore, injuncting the defendants was passed.

Issues: 1. Whether the trial court erred in passing an order beyond the pleadings and case set up by the plaintiff? 2. Whether the trial court erred in granting an injunction regarding use of similar bottles without any material available on record regarding the design of the plaintiff's bottle?

Ratio Decidendi: 1. The trial court erred in passing an order beyond the pleadings and case set up by the plaintiff. The plaintiff had not made out a case regarding the respondents passing-off the goods by using the word “Perry”. The trial court also erred in granting an injunction regarding use of similar bottles without any material available on record regarding the design of the plaintiff's bottle. 2. The trial court's order was perverse and could not be sustained.

Final Decision: The appeal was allowed, the order dated 11.1.2016 passed by the trial court was set aside. The matter was remanded back to the trial to rehear and re-decide the application filed by the respondent in view of the observations made by the court and confining itself to the record of the case.