Sustainability of the claim u/s 26.

RAMACHANDRA IYER, C.J. :- This appeal arises out of an action instituted by the appellant in the District Court, Madurai for infringement of their trade mark. Messrs Parry and Co. Ltd. the appellant herein is a company with limited liability engaged on several lines of business activity. They are interested in a sugar factory at Nellikuppam in South Arcot District. They have also been manufacturing confectionary. For marketing their confectionary products they are using two trade marks which have been registered under Class 30 of the Trade Marks Act, 1940, the registered numbers being 92, 251 and 1,24634. The first of the two marks is in the name "Parrys" in block letters and the second is a design which contains the word Parrys written in script form. Both the marks were by virtue of the original registration to enure for a period of 7 years the former being in respect of sugar and all kinds of confectionary, while the latter was confined to all kinds of confectionery.

The said trade marks have been subsequently renewed for a further period of fifteen years from 5-2-1951 and 30-2-1953 respectively. The respondents, Messsrs. Perry and Co. is a firm consisting of two partners by name K. K. Palanikumar Nadar and K. K. P. T. Periasami Nadar who are engaged in the manufacture and sale of biscuits at Usilampatti in Madurai District. Evidence shows that they have been trading under the name of Perry and Company since at least the year 1934. In respect of biscuits manufactured by them, they have been using labels containing the words Perry and Co. In the year 1950, the respondent applied to the Registrar of Trade Marks, Bombay for registration of their trade marks in regard to biscuits manufactured by them. Their applications were registered as Nos. 106242, 106244 and 121221 the trade mark being the name Perrys written in script form and also written in block letters. The appellant protested against the use of the words Perry as according to them they would amount to a colourable limitation of their mark. Correspondence followed between the parties with a view to explore possibilities of settlement. The respondents assured the appellant company that as they were going to use the labels only in respect of biscuit manufactured by them and that they would give an undertaking not to use the mark in respect of the pepermints or other confectionary even if they were to manufacture them in future.

The appellants were not satisfied with that assurance, as they thought that as both confectionary and biscuits come under the same category, in class 30 for purposes of registration of trade marks it was necessary to protect their property rights in their trade mark with respect to the word Parrys in script form. The parties ultimately entered into an agreement on 4th of May, 1951 under which they, proceeding on the assumption that Parrys were manufacturers of confectionary while Perrys were manufacturers of biscuits, agreed that the respondents might use or adopt as their trade mark Perrys or labels containing that word if they were to use block letters. If, however, the script form were to be adopted, the agreement, specified the form of the script in which the name Perry could be used. The respondents further agreed to amend the application for registration of their trade marks in accordance with the terms of the agreement. After doing so they obtained registration for their trade mark Perry in regard to biscuits manufactured by them. They subsequently obtained renewal of registration for their trade mark for a period of 15 years from 19th February, 1952.

2. In the year 1956 the respondents extended their business activity to manufacturing and putting into the market confectionery. For the sale of their manufactured products they began to use wrappers containing their registered trade mark. The appellants complained that the user by the respondents of their trade mark in connection with confectionery manufactured by them amounted to an in