Soore Detergents, By Proprietor vs D. Mohanraj And Anr. on 30 July, 2004

    Soore Detergents, By Proprietor vs D. Mohanraj And Anr. on 30/7/2004

ORDER 39 RULE 1 AND 2 - LAW OF TORTS -

   'Passing off - Meaning of - HELD - 'passing off is an action in Tort - The
tort of 'passing off is regarded as an action for deceit - It involves a
misrepresentation made by a trader to his prospective customers calculated to
injure as a reasonably foreseeable consequence the business of goodwill of
another which actually or probably cause damages to the Business or Goods of
other trader - An action for 'passing off' as the phrase itself suggests is to
refrain the defendants from passing off its goods or services to the public as
that of the plaintiffs. It is an action not only to preserve the reputation of
the plaintiff but also to safeguard the public.

   (B) CIVIL PROCEDURE CODE - ORDER 39, RULE 1 & 2 - Inter locutory application
for injunction in passing off action, under - HELD - in an action for passing of
, it is usual and essential to seek an order of injunction -The plaintiff must
prove a prima facie case, availability of balance of convenience in his favour
and irreparable injury caused to him - Having regard to the over all
similarities both Etymologically and phonologically it is clear that the
essential feature and characteristic of the plaintiff's trade mark 'Sundari' has
been made use of by the defendant in the wrapper produced by him used for
marketing the detergent cake - Hence plaintiff has made out a prima facie case
for passing off the detergent cake by the first defendant under the trade name
of the plaintiff and the balance of convenience is also in favour of the
plaintiff and the plaintiff would be put to irreparable loss which cannot be
compensated if plaintiff succeeds in the suit; So the plaintiff is entitled to
an order of injunction.

   Held:

   The defendants do not dispute that plaintiff has been marketing detergent
cake under trade name 'SUNDARI' since 8.3.2003 and there is no material on
record to show that defendants had commenced sale of detergent cake prior to
4.1.2004 in the trade name of 'SOUNDARI' or 'SOUNTHARI' hence the material an
record also shows that prima facie as the plaintiff's husband and after
assignment his wife the plaintiff were successful in marketing and earning
reputation and goodwill the defendants were attracted to market detergent cake
under the trade name deceptively similar and likely to confuse the prospective
customers and to indulge in passing off. The very conduct of the first defendant
would prima facie show that he is trying to do indirectly what he is not allowed
to do directly in view of the contents of the agreement dated 8.3.2003 as he is
not permitted to sell the detergent cake in the name of 'SUNDARI' as it is
exclusive right given to the husband of the plaintiff to sell the detergent cake
under the name of 'SUNDARI' in Karnataka State and wherefore what was required
to be decided by the Trial Court was as to whether there is deceptive similarity
and confusion was caused in the mind of the customers and as to whether the
prima fade case of passing off the detergent cake marketed by the defendant in
the name of the plaintiff had been made out.

   It is clear from the perusal of the order passed by the Trial Court that the
Trial Court has compared the trade names 'SUNDARI' with 'SOUNDARI' and
'SOUNTHARI' as it is the case of the first defendant to find out the
dissimilarities between the two Wrappers of the detergent cake produced before
the Court and has found out certain distinct dissimilarities between the two
wrappers by comparing the label on a careful comparison two wrappers and the
Trial Court apart from stating that there is striking dissimilarities between
the two wrappers referred to, the Trial Court has not considered as to whether
the two trade names under which the detergent cake has been marketed viz.,
'SUNDARI' and 'SOUNTHARI' is similar and would cause confusion in the mind of
the customers in detergent cakes,

   The Trial Court has done what ought not to be done and what is required to be
done by the Trial Court was to consider as to whether there was deception and
not whether striking dissimilarity between the two wrappers produced before the
Court and wherefore the order passed by the Trial Court is contrary to the
settled principles referred to above and wherefore arbitrary and capricious.

   (C) CIVIL PROCEDURE CODE, 1908 - ORDER 39 RULES 1 & 2 - Passing off action -
Plaintiff passing of his soaps and detergents - Passing off detergent goods
bearing the label mark "SUNDARI" plaintiffs label "SUNDARI" infringed by
printing the label of the defendant as "SOUNDARI" and "SOUNTHARI". Wrapper used
and colour and design of the Wrapper similar in size as that of the plaintiff -
HELD - Phonetically also both the names 'SOUNDARI' and 'SOUNTHARI' sounds
similar to 'SUNDARI' and further, having regard to the design, layout, getup,
colour scheme, size there is every possibility of confusion when looked at the
point of view of an unwary purchaser with imperfect recollection that if the
detergent cake wrapped in the wrapper produced by the defendants is handed over
to the customer, he is likely to mistake the same as the detergent cake marketed
by the plaintiff as the similarities in the design, layout, getup, feature and
essential characteristic would put the customer who are common namely,
purchasers of detergent cake most of whom may not be literate and not acquainted
with their own mother tongue would be confused, and there is possibility of
every confusion that on seeing the mark of the defendant, the customer would
think that it is the same article which he had brought earlier but is doubtful
as to whether that impression is not due to imperfect recollection and there is
also every likelihood that the customer would accept the detergent cake marketed
by defendant No. 1 as that of the plaintiff and having regard to the fact that
both the first defendant and the plaintiff are marketing the same detergent cake
manufactured with the same technology and quality, there is every likelihood
that an unwary purchaser would be confused by the detergent that is marketed by
the first defendant as that of the plaintiff and wherefore it is clear that the
wrapper that is used by the defendants by marketing the detergent cake in
Karnataka makes out prima facie case of passing off detergent cake manufactured
by him with the trade name deceptively similar to the trade name of the
plaintiff though he is not directly permitted to market the said detergent cake
as he is not permitted to market the detergent cake under the name of 'SUNDARI'
pursuant to the admittedly binding agreement dated 8.3.2003.

   Setting aside the order of the Trial Court rejecting the I.A. filed under
Order 39 Rule 1 & 2, the Court,

   JUDGMENT

   V.G. Sabhahit, J.

   1. These three appeals by the plaintiff in O.S.No.1259/2004 on the file of
the VIII Addl. City Civil Judge, Bangalore, are directed against the order dated
27.5.2004 wherein I.As.I to III filed by the plaintiff under Order 39 Rules 1
and 2 CPC., wherein ad-interim order of Injunction granted has been vacated.

   2. The facts of the case in brief leading up to these appeals with reference
to the rank of the parties before the Trial Court are as follows:

   The plaintiff filed a suit O.S.1259/2004 against the defendants seeking for
permanent injunction restraining the defendants by themselves, their partners,
manufacturers, servants, licensees, agents, printers, carriers and distributors
or any one claiming under them from in any manner:

     a) committing 'passing off' their detergents goods bearing the label mark
"SOUNDARI" as and for or being connected with the business of plaintiff by using
deceptive similar mark in any modified form or by using the colour scheme or get
up.

     b) committing 'infringement of copyright' in the artistic work of
plaintiff's label "SUNDARI" by distributing printing or cause to be printed the
impugned label of the defendants "SOUNDARI".

     c) from marketing and selling detergent goods under any deceptively similar
name to that of "SUNDARI" in the State of Karnataka either directly or
indirectly by violating the terms and conditions of the settlement Deed dated
8.3.2003 entered between the plaintiff's husband and first defendant;

     d) directing the defendants to surrender to the plaintiff all the unused
labels, wrappers and other printed matters containing or consisting of the
offending mark together with blocks used for the purpose of printing the same
for destruction and costs.

   3. In the said suit, the plaintiff filed I.As.I to III under Order 39 Rules I
and 2 CPC., seeking for an order of temporary injunction against the defendants
in terms of the final relief sought far as per clauses (a)(b) and (c) referred
to above. An order of exparte temporary injunction was granted on 25.2.2004.
After the appearance the defendants filed objections to the applications with
the counter affidavit of the defendants and the Trial Court by its order dated
27.5.2004 vacated the ad-interim injunction granted on 25.2.2004 and being
aggrieved by the said Common order on I.As.I to III the plaintiff is before this
Court in this appeal.

   4. I have heard the learned Senior Counsel appearing for the plaintiff-
appellant and the learned Senior Counsel appearing for the defendants-
respondents and scrutinised the material on record.

   5. It is clear from the material on record that the plaintiff filed I.As.I to
III for the above said reliefs of temporary Injunction under Order 39 Rules I
and 2 .CPC, along with the affidavit of the Power of Attorney Holder of the
plaintiff averring that the plaintiff is a proprietorship firm carrying on the
business of manufacture and sale of detergent soaps and detergent powder under
the labelmark "SUNDARI". Originally the label mark "SUNDARI". was being used by
the plaintiff's husband viz., D. Suyaraj along with his brother D. Mohanraj, who
is first defendant herein under the name and style of `Lakshmi Industries" at
No. 138, Sundakkamuthur Road, Coimbatore-641 026. Subsequently there were
several changes in the constitution of the firm 'Lakshmi Industries'. Finally, a
settlement was effected on 8.3.1993 between the plaintiffs husband D. Suyaraj
and the first defendant D. Mohanraj with regard to the continuous and
simultaneous use of the label mark "SUNDARI" by both of them. Accordingly the
plaintiff's husband D. Suyaraj is entitled to use the label mark "SUNDARI" in 17
Districts of the State of Tamilnadu including the entire State of Karnataka. The
first defendant is entitled to use the label mark "SUNDARI" in the State of
Tamilnadu including the entire State of Andhra Pradesh. Thereby the first
defendant is not entitled to market the detergent cakes and powder under the
label mark "SUNDARI" in the State of Karnataka by virtue of settlement deed
dated 8.3.2003. It is also averred that after effecting the said Settlement
Deed, the plaintiff's husband assigned his rights over the label mark to the
plaintiff under one Assignment Deed dated 30.10.2003 from which date the
plaintiff is using the label mark "SUNDARI" and used to sell the detergent goods
in the 17 Districts of Tamilnadu and in the state of Karnataka. The plaintiff
has got exclusive rights to use and sell the detergent goods bearing the label
"SUNDARI" by virtue of the said Assignment deed dated 30.10.2003. Thereby the
plaintiff claim use of the said label mark from the date of predecessor-in-title
i.e. from the year of 1986. The plaintiff has also gained reputation and
goodwill attached to the label mark "SUNDARI" during the last 16 years by
selling the detergent goods in the State of Karnataka. The plaintiff has
appointed sole selling agents for their goods "SUNDARI" in Karnataka State also.

   6. It is further averred that while so, knowing the popularity and demand
made by the plaintiff's label mark "SUNDARI" in the State of Karnataka, it is
found that the first defendant is indulged in manufacturing and marketing the
detergent cakes under the label "SUNDARI" in the State of Karnataka either
directly or Indirectly inspite of the fact that he is not empowered to do so as
per the Settlement Deed dated 8.3.2003. It has been brought to the notice of the
plaintiff that the first defendant has made an advertisement in the Kannada
newspaper viz., "VIJAY KARNATAKA" dated 4.1.2004 by soliciting the trade
enquiries for marketing detergent soaps under one deceptively similar label mark
"SUNDARI". Therefore, the first defendant is making efforts to sell the
detergents cakes in the name of "SUNDARI" which is identical with and
deceptively similar to the plaintiff's label "SUNDARI". The letters in Kannada
language for both the names "SUNDARI" and "SOUNDARI" are almost similar. Since
the first defendant could not market the detergent cakes under the label mark
"SUNDARI" directly in the State of Karnataka he is trying to sell the detergent
goods through the second defendant indirectly under the deceptively similar
label mark "SOUNDARI". Further it seems from the said advertisement, the first
defendant claims rights over the deceptive label "SOUNDARI" by filing trademark
application. But it is well settled principle of law that mere filing of
trademark application will not confer any rights of the applicant.

   7. It is further averred that the defendants label mark "SOUNDARI" is the
substantial reproduction of the plaintiff's artistic work in her label mark
"SUNDARI" with respect to the colour scheme distribution of letters and size of
the letters except the letter "O". Hence the defendants have conspired to injure
the business of the plaintiff by selling the detergent goods under the
deceptively similar label "SOUNDARI". The conduct of the defendants amount to
infringement of plaintiffs copyright in the artistic work of the label mark
"SUNDARI" and it also amounts to passing off as the label mark "SUNDARI" as like
that of plaintiff's label "SUNDARI" in the State of Karnataka the conduct of the
defendants amount to fraud on the plaintiff as well as consumer public. The near
total similarity of the defendants spurious label trademark "SOUNDARI" cannot be
a mere coincidences. It is a deliberate attempt on the part of the defendants to
'pass off' their goods as the goods of plaintiff. It shows commercial dishonesty
on the part of the defendants and thereby the defendants have passed off their
goods "SOUNDARI" as like that of plaintiff's "SUNDARI". Hence the adoption of
deceptively similar label "SOUNDARI" by the first defendant is not honest but
mollified one as far as selling of detergent goods in the State of Karnataka is
concerned by totally violating the spirit of settlement deed dated 83.2003. It
is also averred that the defendants are trying to sell their detergent soaps in
Karnataka State with the label "SOUNDARI" which is identical and deceptively
similar with that of the plaintiff's label "SUNDARI" and is likely to deceive or
cause confusion or injury to goodwill of plaintiff's business. The general
public are likely to be deceived by the defendants' use of the label mark
"SOUNDARI". The plaintiff has a prima facie case. The balance of convenience
lies in its favour. If the interim order as prayed is not granted the plaintiff
will be put to greater hardship and cause irreparable loss. On the other hand no
hardship is going to cause defendants.

   8. The affidavit filed in support of all the three applications are common.
The defendants filed a common counter by way of objections to the applications
I.As.I to III and it is averred that the plaintiff has filed the above case
seeking various reliefs of injunction on the ground that the defendant has
infringed the copyright of the plaintiff and that the defendant is passing of
the product of the plaintiff. It is submitted that the above suit is without
basis and requires to be rejected in limie. He also contended that the plaintiff
has filed three I.As., I.A.I is for injunction to restrain the defendants from
passing of their detergent goods bearing label mark 'Soundari' or any other
deceptively similar mark I.A.II is for an injunction to restrain the defendants
from infringing the copyright of the plaintiff in the label I.A.III is for an
injunction to the defendants from either directly or Indirectly violating the
Settlement Agreement dated 8.3.2003 and submitted that the affidavits in support
of all three applications are identical in nature and hence all the applications
are replied to by a common counter affidavit. He further submitted that the only
parties to the Settlement Deed are the plaintiff's husband and defendant No. 1.
The only person who can claim performance of the said Agreement is the
plaintiff's husband. As no right has been assigned in favour or the plaintiff,
the question of seeking an injunction in the form in which it has been sought in
I.A.III does not arise and the plaintiff cannot make any valid claim for
infringement of copyright or for passing off as the suit is misconceived and
requires to be rejected at the threshold. He further alleged that in the absence
of any visual or phonetic similarity, the defendants are now prevented from
continuing their business as a result, great losses are being suffered by the
defendants and the plaintiff has not even disclosed any shred of evidence to
demonstrate any goodwill or sales in the market and he cannot seek any relief at
the hands of this Hon'ble Court without even satisfying the minimum requirements
of passing off and hence the reliefs claimed cannot be granted. He has also
submitted that the defendants have demonstrated the market share that it
possesses and the sales that it has made over the months and the plaintiff has
no such market share nor have they done any sales. In that view of the matter,
the plaintiff cannot be seen to claim any right of passing off or infringement
and as the defendants have already suffered irreparable loss owing to the
exparte injunction order which the plaintiffs are using inappropriately, the
plaintiff will suffer no harm as there is no market for its products, nor are
there any sales that it has done and wherefore it is submitted by him that the
said order of injunction is continuing to cause irreparable harm and injustice
and the defendant will be put to grave prejudice if the same is continued.

   9. The plaintiff has produced eight documents along with the plaint
comprising of Power of Attorney, Assignment Deed dated 31.10.2003, defendants
advertisement in the newspaper dated 4.1.2004 and application of the plaintiffs
for registration of trademark dated 5.11.2003 and the defendants have produced
documents comprising of deed of assignment dated 15.4.1993, partnership deed
dated 5.4.1995 wrappers used by the defendant to market detergent cake wrappers
used indicating colour of soap assignment deed dated 30.10.2003, invoices, as
per D1 to D7 referred to in the written statement.

   10. The learned Senior Counsel for the appellant Sri Udaya Holla submitted
that order passed by the Trial Court rejecting application for temporary
injunction is capricious and arbitrary and the Trial Court has proceeded to
compare the two wrappers side by side which it was not expected to do and has
merely held that there is dissimilarity and there is no likelihood of confusion
and no finding has been be recorded as to deceptiveness and confusion. The
learned Senior Counsel further submitted that the first defendant who cannot
market the detergent cake under the name "SUNDARI" in Karnataka as per the
agreement is indirectly trying to market the cake by passing off the detergent
cake as that of the plaintiff under the deceptive trade mark "SOUNDARI" and
"SOUNTHARI" which is etymologically and phonetically similar and the learned
Counsel submitted that the order passed by the Trial Court is contrary to the
settled principles laid down by the Supreme Court and that the plaintiff is
entitled to temporary injunction as sought for in the suit. He has relied upon
the following decisions in support of his contentions:

     1. AMRITDHARA PHARMACY v. SATYA DEO,

     2. BANIK RUBBER INDUSTRIES v. K.B. RUBBER INDUSTRIES, 2. 1990 PTC 58
(CALCUTTA)

     3. MANGALORE R.K. BEEDIES v. MOHAMMED HANEEF, 1993(3) KLJ 37(DB)

     4. GOEL POCKET BOOKS v. RAJA POCKET BOOKS, 1997 PTC (17) (DELHI)

     5. BENGAL WATERPROOF LTD., v. BOMBAY WATERPROOF Co., 1997 PTC (17) (SC)

     6. AMAR SUITINGS LTD., v. AMAR SUNTEX PRIVATE LIMITED, 2000 PTC 77 (P&H)

     7. CADILA HEALTH CARE LTD., v. CADILA PHARMACEUTICALS LTD., 2001 AIR SCW
1411

     8. LAKSHMIKANT V. PATEL v. CHETAN BHAT SHAH,

     9. SATYAM INFOWAY PVT. LTD. v. SIFYNET SOLUTIONS PVT.LTD., 2004 AIR SCW
3409

     10. BROOKE BOND INDIA LTD. v. ROYAL PRODUCT, 1981(2) KLJ 92

   11. Per contra, the learned Senior Counsel appearing for the respondents-
defendants Sri K.G. Raghavan submitted that there is no material to prima facie
show that the defendant is passing off the detergent cake as that of the
plaintiff. The learned Counsel submitted that there is no material to show the
reputation and the goodwill earned by the plaintiff by marketing the detergent
cake and in passing off action when the defendant is successful in showing that
the trade name under which he is marketing the product is dissimilar, he is
entitled to succeed as it is not a case for infringement and the learned Counsel
further submitted that the order passed by the Trial Court indicating the
dissimilarities between the two trade names used by the defendants and the
plaintiff would clearly show that there is no deception and there would not be
any confusion in the mind of the customers who would be the purchasers of the
detergent cakes and no case of passing off is made out as rightly held by the
Trial Court. The learned Counsel also submitted that the order passed by the
Trial Court cannot be said to be arbitrary or perverse as to call for
interference in these appeals and appeals are liable to be dismissed. In support
of his contentions, he has relied upon the following decisions:

     1. WANDER LTD., v. ANTOX INDIA PVT.LTD., 1990 (SUPP) SCC 727

     2. COLGATE PALMOLIVE (INDIA) LTD., v. V. HINDUSTAN LEVER,

     3. UNIPLY INDUSTRIES LTD., v. UNICORM PLYWOOD LTD.,

     4. MAHENDRA & MAHENDRA PAPER MILLS v. MAHINDRA AND MAHINDRA LTD.,

     5. GUJARAT BOTTLING CO., LTD., v. COCACOLA CO. AIR 1995 SC 2373

     6. BESCO ENTERPRISES v. PRADHAN PERFUMES, ILR 2002 KAR. 235

   12. Having regard to the contentions urged, the points that arise for
determination in these appeals are:

     1) Whether the order passed by the Trial Court dated 27.5.2004 dismissing
I.As.1 to 3 filed under Order 39 Rules 1 and 2 of CPC., calls for interference
in these appeals?

     2) What order? and I answer the above points as follows:

     POINT NO. 1: Partly in the affirmative. The order passed by the Trial Court
is capricious and arbitrary in so far as it relates to rejection of I .A.I.

     POINT NO. 2: As per the final order for the following reasons:

   13. I have given anxious consideration to the contentions of learned Senior
Counsel for the parties, scrutinised the material on record and perused the
decisions relied upon by both the Counsel. In view of the principles laid down
in the decisions relied upon by the learned Counsel appearing the parties it is
well settled that 'passing off' is an action in tort. The tort of passing off is
regarded as an action for deceit. It involves a misrepresentation made by a
trader to his prospective customers calculated to injure as a reasonably
foreseeable consequence the business or goodwill of another which actually or
probably causes damage to the business or goods of other trader. An action for
'passing off' as the phrase itself suggests is to refrain the defendants from
passing off its goods or services to the public as that of the plaintiffs. It is
an action not only to preserve the reputation of the plaintiff but also to
safeguard the public. The defendant must have sold its goods in a manner which
has deceived or likely to deceive the public in to thinking that the defendants
goods are the plaintiffs. (Satyam Infoway Ltd v. Sifynet Solutions Pvt. Ltd.,
2004 AIR SCW 3403). The development of law of passing off, the gist of the
action, requirement of proof and consideration of interlocutory applications for
injunction in passing off action has been succinctly laid down by the Supreme
Court in Lakshmikant V. Patel v. Chetanbhat Shan as follows:

     "10.A person may sell his goods or deliver his services as in case of a
profession under a trading name or style. With the lapse of time such business
or services associated with a person acquire a reputation or goodwill which
becomes a property which is protected by Courts. A competitor initiating sale of
goods or services in the same name or by imitating that name results in injury
to the business of one who has the property in that name. The law does not
permit any one to carry on his business in such a way as would persuade the
customers or clients in believing that the goods or services belonging to
someone else are his or are associated therewith. It does not matter whether the
latter person does so fraudulently or otherwise. The reasons are two. Firstly,
honesty and fair play are and ought to be the basic policies in the work of
business. Secondly, when a person adopts or intends to adopt a name in
connection with his business or services which already belongs to someone else
it result in confusion and has propensity of diverting the customers and clients
of someone else to himself and thereby resulting in injury.

     11. Salmond & Heuston in Law of Torts call this form of injury as
'injurious falsehood' and observe the same having been awkwardly termed as
passing off and state:-

     "the legal and economic basis of this tort is to provide protection for the
right of property which exists not in a particular name, mark or style but in an
established business, commercial or professional reputation or goodwill. So to
sell merchandise or carry on business under such a name, mark, description or
otherwise in such a manner as to mislead the public into believing that the
merchandise or business is that of another person is a wrong actionable at the
suit of that other person. This form of Injury is commonly, though awkwardly,
termed that of passing off one's goods or business as the goods or business of
another and is he most falsehood. The gist of the conception of passing off is
that the goods are in effect telling a falsehood about themselves, are saying
something about themselves which is calculated to mislead. The law on this
matter is designed to protect traders against that form of unfair competition
which consists in acquiring for oneself, by means of false or misleading
devices, the benefit of the reputation already achieved by rival traders.

     12. In Oertil v. Bowman (1957) RPC 388, the gist of passing off action was
defined by stating that it was essential to the success of any claim to passing
off based on the use of given mark or get up that the plaintiff should be able
to show that the disputed mark or get up has become by user in the country
distinctive of the plaintiffs goods so that the use in relation to any goods of
the kind dealt in by the plaintiff of that mark or get up will be understood by
the trade and the public in that country as meaning that the goods are the
plaintiff's goods. It is in the nature of acquisition of a quasi-proprietary
right to the exclusive use of the mark or get up in relation to goods of that
kind because of the plaintiff having used or made it known that the mark or get
up has relation to his goods. Such right is invaded by anyone using the same or
some deceptively similar mark, get up or name in relation to goods not of
plaintiff. The three elements of passing off action are the reputation of goods,
possibility of deception and likelihood of damages to the plaintiff. In our
opinion, the same principle, which applies to trade mark, is applicable to trade
name.

     13. In an action for passing off it is usual, rather essential to seek an
injunction temporary or ad-interim. The principles for the grant of such
injunction are the same as in the case of any other action against injury
complained of. The plaintiff must prove a prima facie case, availability of
balance of convenience in his favour and his suffering an irreparable injury in
the absence of grant of injunction. According to Kerly passing off cases are
often cases of deliberate and intentional misrepresentation, but it is well
settled that fraud is not a necessary element of the right of action, and the
absence of an intention to deceive is not a defence though proof of fraudulent
intention may materially assist a plaintiff in establishing probability of
deception. Christopher Wadlow in Law of Passing off states that the plaintiff
does not have to prove actual damage in order to succeed in an action for
passing off. Likelihood of damage is sufficient. The same learned author states
that the defendant's state of mind is wholly irrelevant to the existence of the
cause of action for passing off. As to how the Injunction granted by the Court
would shape depends on the facts and circumstances of each case. Where a
defendant has imitated or adopted that plaintiff's distinctive trade mark or
business name, the order may be an absolute injunction that he would not use or
carry on business under that name".

   14. Three Judges Bench of Hon'ble Supreme Court after considering the earlier
decisions of Supreme Court has laid down as follows in the case of AMRITDHARA
PHARMACY v. SATYA DEO :

     "As to confusion it is perhaps an appropriate description of the state of
mind of a customer who, on seeing mark thinks that it differs from the mark on
goods which he has previously bought but is doubtful whether that impression is
not due to imperfect recollection (Kerly on trademark)."

   15. In CADILA HEALTH CARE Ltd., v. CADILA PHARMACEUTICALS LTD., (AIR 2001 SCW
1411) Hon'ble Supreme Court has observed as follows:

     "35. Broadly stated in an action for passing off on the basis of
unregistered trade mark generally for deciding the question of deceptive
similarity the following factors to be considered:

     a) the nature of the marks i.e. whether the marks are work marks or label
marks or composite marks, i.e. both words and label works.

     b) the degree of resembleness between the marks, phonetically similar and
hence similar in idea.

     c) the nature of the goods in respect of which they are used as trade
marks;

     d) the similarity in the nature, character and performance of the goods of
the rival traders.

     e) the class of purchasers who are likely to buy the goods bearing the
marks they require on their education and intelligence and a degree of care they
are likely to exercise in purchasing and/ or using the goods.

     f) the mode of purchasing the goods or placing orders for the goods and

     g) any other surrounding circumstances which may be relevant in the extent
of dissimilarity between the competing marks".

   16. The manner in which the principles laid down by the decision of Apex
Court and this Court have to be applied as is laid down by the Division Bench
decision of this Court in MANGALORE R.K. BEEDIES v. MOHAMMED HANEEF (1993(3) KLJ
37).

     "16. A trademark, may consist of a name or a pictorial device or a
combination of name and pictorial device. What is important may be the name in
some cases, the pictorial device in some cases, or a combination of the name and
pictorial device in other cases. The Court will have examine the plaintiff's
trademark which may consist of a mere name or a pictorial device or a
combination of both as the case may be, and identify its essential and important
features and characteristics. Thereafter, without having the original, that is,
the plaintiff's mark for comparison, the Court will have to examine the
trademark of defendant to identify its essential features and characteristics.
It should then visualise, putting itself in the place of an average common man
with an ordinary and imperfect memory whether the essential features and
characteristics of plaintiff's mark are reproduced and highlighted in the
defendant's mark. If it is so done and is likely to cause confusion in the minds
of public, then that will be sufficient to grant relief to the plaintiff. A
detailed examination to find out minute distinguishing features between the two
marks ignoring the essential features will defeat the very purpose and object of
finding out whether there is deceptive similarity. The question is not whether
the trademark used by the defendant is distinguishable, but whether it is
deceptively similar."

   17. When the facts of the present case are considered in the light of the
abovesaid principles laid down by the Supreme Court and this Court it is clear
that in the present case that father of the first defendant A. Dharmaraja Nadar
and his son D. Amburaj were doing business under the trademark "SUNDARI" and
their application for registration of trademark was pending. They were marketing
detergent cakes and washing soaps under the trademark "SUNDARI" from eight
years. They decided to retire from business and agreed to help Mohanraj son of
Dharmaraja Nadar and transferred by assignment deed dated 15.4.1993 the
exclusive use and benefit of the trademark "SUNDARI" along with goodwill of the
business in which the said Mohanraj (defendant No. 1) who was doing business
under the name and style "Lakshmi Industries" Mohanraj entered into a
partnership with Suyaraj on 5.4.1995 and it was agreed that partnership shall do
business under the name and style "Lakshmi Industries" with effect from
5.4.1995. The nature of the business agreed to deal is in detergent soaps under
trademark "SUNDARI" and "AGNI" and all other allied business connected with main
business to be carried on by both the partners. Thereafter, on 8.3.2003 a deed
of settlement was entered into between Thiru D. Suyaraj and his brother Thiru D.
Mohanraj (defendant No. 1) agreeing interalia as follows:

     1. To accept the decisions made in the presence of the Thiru A. Dharmaraj
Nadar, Thiru Raja Climax already on 7th day of May 2002, Thiru D. Suyaraj is
taken the factory and other machineries, materials as mentioned in Schedule 1.

     2. Thiru D. Mohanraj is taken over the factory, machineries materials as
mentioned in Schedule 2.

     3. Thiru D. Suyaraj shall do the business in Sundari and Agni Soap and soap
powders in the business places mentioned in Schedule 3.

     4. Thiru D. Mohanraj shall do the business in Sundari and Agni Soap and
soap powders in the business places mentioned in Schedule 4."

     SCHEDULE-1:

     1. Lakshmi Industries, 138, Sundakkamathur Road, Coimbatore

     2. Mahalakshmi Detergents, Karaikkal. SCHEDULE-2:

     1. S.M. Detergents (D) Ltd., 4, Pallikooda Street, Coimbatore-10

     SCHEDULE-3:

     The places allotted to do the business by Thiru D. Suyaraj

     1.Karnataka State fully.

     2.The following districts in Tamil Nadu:

 1. Coimbatore, 2. Nilgiris, 3. Erode,

 4. Karur, 5. Dindigul, 6. Pudukkottai

 7. Thanjavur, 8. Thiruvarur, 9. Nagapattinam,

10. Theni, 11. Marai, 12. Sivagangai,

13. Virudhunagar, 14. Ramanathapuram,

15. Thirunelveli 16. Thoothukudi 17. Kanyakumari.

     SCHEDULE-4:

     The places allotted to do the business by Thiru D. Mohanraj

     1. Andhra Pradesh fully.

     2.The following districts in Tamil Nadu

     Salem, Athur, Namakkal, Trichy, Perambalur, Ariyalur, Kadalur, Villappuram,
Dharmapuri, Thiruvannamalai, Vellore, Kancheepuram, Thiruvalluvar, Chennai.

   18. Thiru D. Suyaraj who had obtained exclusive rights in the label trademark
"SUNDARI" for sale of goods 'Detergents' in the State of Karnataka and 17
districts in the State of Tamilnadu as per Schedule 3 of settlement deed dated
8.3.2003 assigned trademark in favour of his wife S. Shanthi (the plaintiff in
the suit) by executing deed of assignment of trademark on 30.10.2003.

   19. The execution of abovesaid documents and contents thereof are not in
dispute as submitted by the learned Senior Counsel appearing for the parties and
wherefore, it is also indisputable that Mohanraj had no right to sell detergent
cake under the trade name 'SUNDARI' in the State of Karnataka and it is also the
case of first defendant as averred in the written statement and objections to
LA. that he is not doing any business in Karnataka by selling detergent soap
under the trade name 'SUNDARI' contrary to the contents of settlement deed dated
8.3.2003. However what is contended by the first defendant is that he was
selling detergent cake in his own trade name 'SOUNTHARI' and that label and
publication in the name 'SUNDARI' are withdrawn and he is now manufacturing and
selling detergent cake under the name 'SOUNTHARI' which is no way deceptively
similar nor would cause any confusion in the minds of the customers and he has
no intention of passing off detergent cake and detergent cake manufactured by
him under the trade name 'SOUNTHARI' for which also application for registration
of trademark is pending. Hence it is undisputable that defendant No. 1 cannot
market detergent cake under the trade name 'SUNDARI' in Karnataka and such right
vests with the plaintiff and wherefore it is necessary to find out as to whether
the plaintiff has made out prima facie case of passing off and as to whether
balance of convenience is in her favour to grant an order of injunction in her
favour as sought for in the interlocutory application. It may be noted at the
outset that so far as case of the plaintiff in so far as it relates to
infringement of copyright and violation of agreement dated 8.3.2003 are
concerned the plaintiff has not at all made out any prima facie case and
material on record and defence of the defendant when considered in the light of
the settled principles of law, no case is made out for grant of temporary
injunction as sought for in I.A.II and III and the only question that would
require detailed consideration even according to the learned Counsel appearing
for the parties is whether plaintiff is entitled to temporary injunction as
sought for in I.A.I to restrain passing off by defendants during the pendency of
the suit.

   20. It is clear from the material on record that the defendants do not
dispute that in view of the settlement arrived at between the husband of the
plaintiff and the first defendant who are brothers the first defendant was
permitted to do business in the detergent cake under the trade name 'SUNDARI' in
the entire State of Andhra Pradesh and certain districts in Tamilnadu and the
right to market the detergent cake under the trade name 'SUNDARI' was given to
the husband of the plaintiff in respect of entire State of Karnataka and 17
Districts in Tamilnadu. The said agreement is not disputed by the defendants. It
is also the contention of the defendants even according to the averment made in
the counter affidavit and the written statement that defendant No. 1 has been
marketing the detergent cake under the name 'SOUNTHARI' which is distinctly
different from the trade name 'SUNDARI' and there is no deception or likelihood
of confusion in the goods marketed by the defendant and defendant is marketing
his goods in his own right and he is not trying to pass off the detergent cake
manufactured by him as that of the plaintiff. In view of the fact that the first
defendant does not dispute the contents of the agreement dated 8.3.2003 and the
fact that the husband of the first defendant was entitled to sell detergent cake
under the trade name 'SUNDARI' in the entire state of Karnataka and there is
also no dispute that the said agreement is given effect to. There is no material
on record to show that on 8.3,2003 an agreement was entered into wherein the
territory to which the first defendant and his brother is entitled to sell the
detergent cake under the trademark 'SUNDARI' that the first defendant had
launched his detergent cake under the name 'SOUNDARI' and 'SOUNTHARI' and
according to the averments made in the plaint and the application only after the
advertisement was given by the first defendant calling for enquiries for
marketing detergent soaps under the trademark 'SOUNDARI' in Vijaya Karnataka
daily on 4.1.2004. The cause of action for the suit and application arose for
the plaintiff. The defendants do not dispute that plaintiff has been marketing
detergent cake under trade name 'SUNDARI' since 8.3.2003 and there is no
material on record to show that defendants had commenced sale of detergent cake
prior to 4.1.2004 in the trade name of 'SOUNDARI' or 'SOUNTHARI' hence the
material on record also shows that prima facie as the plaintiff's husband and
after assignment his wife the plaintiff were successful in marketing and earning
reputation and goodwill the defendants were attracted to market detergent cake
under the trade name deceptively similar and likely to confuse the prospective
customers and to indulge in passing off. The very conduct of the first defendant
would prima facie show that he is trying to do indirectly what he is not allowed
to do directly in view of the contents of the agreement dated 8.3.2003 as he is
not permitted to sell the detergent cake in the name of 'SUNDARI' as it is
exclusive right given to the husband of the plaintiff to sell the detergent cake
under the name of 'SUNDARI' in Karnataka State and wherefore what was required
to be decided by the Trial Court was as to whether there is deceptive similarity
and confusion was caused in the mind of the customers and as to whether the
prima facie case of passing off the detergent cake marketed by the defendant in
the name of the plaintiff had been made out. It is clear from the perusal of the
order passed by the Trial Court that the Trial Court has compared the trade
names 'SUNDARI' with 'SOUNDARI' and 'SOUNTHARI' as it is the case of the first
defendant to find out the dissimilarities between the two Wrappers of the
detergent cake produced before the Court and has found out certain distinct
dissimilarities between the two wrappers or by comparing the label on a careful
comparison two wrappers and the Trial Court apart from stating that there is
striking dissimilarities between the two wrappers referred to, the Trial Court
has not considered as to whether the two trade names under which the detergent
cake has been marketed viz., 'SUNDARI' and 'SOUNTHARI' is similar and would
cause confusion in the mind of the customers in detergent cakes. The Trial Court
has done what ought not to be done and what is required to be done by the Trial
Court was to consider as to whether there was deception and not whether striking
dissimilarity between the two wrappers produced before the Court and wherefore
the order passed by the Trial Court is contrary to the settled principles
referred to above and wherefore arbitrary and capricious.

   21. When the wrappers of the detergent cake produced before the Court under
which the detergent cake marketed by the first defendant which is produced
before the Court under the trade name 'NEW SOUNDARI' and 'NEW SOUNTHARI' is
looked at from the point of view man of average intelligence and imperfect
recollection, it is clear that having regard to the colour scheme the size of
the wrapper and also the contents on the wrapper it is clear that the wrapper
which is similar in size as that of the plaintiff wrapper containing the
detergent cake under the name 'SUNDARI' is of identical size and the essential
characteristic of the plaintiff's trade name is also contained in the wrapper
used by the defendant. Having regard to the over all similarities both
etymologically and phonologically it is clear that the essential feature and
characteristic of the plaintiff's trade mark 'SUNDARI' has been made use of by
the defendant in the wrapper produced by him used for marketing the detergent
cake. So far as the product to which the wrapper is used is the name namely, the
detergent cake and it is not disputed that the first defendant is authorised to
sell the detergent cake under the name 'SUNDARI' in the State of Andhra Pradesh
fully and in certain districts of Tamilnadu and not in Karnataka and therefore,
the quality of the detergent cake would also be the same as the plaintiff and
defendant have only allocated the area of operation of marketing as defendant
No. 1 and his brother have allocated the area of operation for marketing the
detergent produced by them and it is also clear from the perusal of the wrappers
that having regard to the broad and essential features of the two wrappers and
the important feature and the characteristic, the design, layout, getup, colour
scheme of the wrapper used by the defendant for marketing the same, it is clear
that the same is similar to the wrapper in so far as it relates to the important
feature and characteristic. It is also submitted by the learned Counsel for the
parties that the word 'SOUNDHARI' and "SOUNTHARI" in Tamil would carry same
meaning 'SUNDARI' in Kannada language. Phonetically also both the names
'SOUNDARI' and 'SOUNTHARI' sounds similar to 'SUNDARI' and further, having
regard to the design, layout, getup, colour scheme, size there is every
possibility of confusion when looked at the point of view of an unwary purchaser
with imperfect recollection that if the detergent cake wrapped in the wrapper
produced by the defendants is handed over to the customer, he is likely to
mistake the same as the detergent cake marketed by the plaintiff as the
similarities in the design, layout, getup, feature and essential characteristic
would put the customer who are common namely, purchasers of detergent cake most
of whom may not be literate and not acquainted with their own mother tongue
would be confused, and there is possibility of every confusion that on seeing
the mark of the defendant, the customer would think that it is the same article
which he had brought earlier but is doubtful as to whether that impression is
not due to imperfect recollection and there is also every likelihood that the
customer would accept the detergent cake marketed by defendant No. 1 as that of
the plaintiff and having regard to the fact that both the first defendant and
the plaintiff are marketing the same detergent cake manufactured with the same
technology and quality, there is every likelihood that an unwary purchaser would
be confused by the detergent that is marketed by the first defendant as that of
the plaintiff and wherefore it is clear that the wrapper that is used by the
defendants by marketing the detergent cake in Karnataka makes out prima facie
case of passing off detergent cake manufactured by him with the trade name
deceptively similar to the trade name of the plaintiff though he is not directly
permitted to market the said detergent cake as he is not permitted to market the
detergent cake under the name of 'SUNDARI' pursuant to the admittedly binding
agreement dated 8.3.2003. Wherefore, It is clear that the plaintiff has made out
a prima facie case of passing off the detergent cake by the first defendant
under the trade name of the plaintiff and it is no answer to say that a person
educated in Kannada and Tamil language would go by the etymologically meanings
and therefore the difference between the two wrappers, as customers would not be
having the opportunity to see both the wrappers and compare the same. Even if
they are literate and are in a position to read the contents of the wrapper as
they would be purchasing the detergent across the counter and most of the
customers would be unwary customers purchasing the detergent cake and mass of
the customers would be illiterate and badly educated and wherefore it is clear
that the plaintiff has made out a prima facie case of passing off by the
defendant and the balance of convenience is also in favour of the plaintiff in
as much as the first defendant who is not permitted to sell the detergent cake
under the trade name 'SUNDARI' pursuant to a binding agreement with his brother
the assignor of the trademark to the plaintiff and he is permitted to
exclusively market the detergent cake under the name 'SUNDARI' in Andhra Pradesh
and certain Districts of Tamilnadu and the first defendant who is exercising his
right pursuant to the said agreement of marketing detergent cake 'SUNDARI' in
Andhra Pradesh and some of the Districts in Tamilnadu as per the agreement is
trying to pass off the detergent cake under the trade name 'SOUNDARI' and
'SOUNTHARI' by passing off the detergent cake as that of the plaintiff and
therefore balance of convenience is in favour of the plaintiff who is entitled
to exclusively market the detergent cake under the trade name 'SUNDARI' as per
agreement dated 8.3.2003 and plaintiff's business would be grossly affected if
the defendants are permitted to pass off the detergent cake as that of the
plaintiffs. Accordingly, I hold that balance of convenience is also in favour of
the plaintiff and the plaintiff would be put to irreparable loss which cannot be
compensated if plaintiff succeeds in the suit; and wherefore to preserve and
protect in status-quo the right of the plaintiff the plaintiff is entitled to an
order of injunction as sought for in I.A.I. Accordingly, I hold that the order
passed by the Trial Court rejecting I.A.I is liable to be set aside and
plaintiff is entitled to an order of temporary injunction to restrain the
defendants from passing off their detergent cakes bearing trade mark 'SOUNDARI'
or any deceptive mark in Karnataka during the pendency of the suit as sought for
in I.A.I and accordingly, I pass the following order-.

   MFA.No.4437/2004 is allowed. Order passed by the Trial Court in
O.S.No.1259/2004 dismissing I.A.I is set aside and I.A.I is allowed as prayed
for. Order passed by the Trial Court dismissing I.As.II and III is confirmed and
MFA Nos. 4435/2004 and 4436/2004 are dismissed. It is made clear that any
observations made in this judgment on the merits of the case would not influence
the Trial Court while considering the suit on merits and suit shall be disposed
of independently in accordance with law on the basis of the material produced by
the parties. The Trial Court is directed to dispose of the suit within nine
months from the date of receipt of copy of this order or production of certified
copy of this order whichever is earlier. Parties to bear their own costs in
these appeals.