Victory Transport Co. Pvt. Ltd., ... vs The District Judge, Ghaziabad And ...

on 10 September, 1981

Allahabad High Court Allahabad High Court Victory Transport Co. Pvt. Ltd., ... vs The District Judge, Ghaziabad And ... on 10 September, 1981 Equivalent citations: AIR 1981 All 421 Author: A Varma Bench: A Varma ORDER A.N. Varma, J. 1. By means of this petition under Article 226 of the Const., the petitioner who is a plaintiff in a suit pending in the Court of the learned VIII Additional Munsif, Gaziabad, challenges the legality and propriety of two concurrent orders passed by the Courts below- declining to issue a temporary injunction restraining the defendants of the suit from using and displaying their trade name during the pendency of the suit. 2. The petitioner filed a Civil suit No. 163 of 198o at Ghaziabad for a permanent injunction restraining, the defendants, from using and exhibiting the name and style of the plaintiff company "in any manner whatsoever," Simultaneously with the institution of the suit the petitioner also filed an application for temporary injunction with the following prayer:-"It is, therefore, prayed that a temporary Injunction during the pendency of the above case be granted the defendants restraining them from using and exhibiting the name and style of the plaintiff company i. e., Victory Transport Co. "in any manner whatsoever." 3. This application was accompanied by an affidavit of one Sri Surender Pal Singh. The affidavit was virtually a repetition of the plaint allegations. 4. The above application was contested by the defendants, who filed a counter-affidavit refuting the various allegations made by the petitioner in the said affidavit. The trial Court considered the case of the parties in the light of what it considered the relevant principles governing such actions and came to the conclusion that the petitioner had failed to prove, both that it had a prima facie case, and that the balance of convenience was in its favour. The application for injunction was consequently dismissed. 5. Aggrieved, the petitioner filed an appeal, but without any success. The appellate Court concurred with the trial Court in its conclusion that the plaintiff failed to prove a prima facie case which might justify issuance of a temporary injunction. 6. Shortly, the plaint allegations (which were repeated in the affidavit filed in support of the application for temporary injunction) were that the plaintiff was a joint stock Company having been duly registered under the Companies Act. Its head office was in Delhi. It had a branch office at Ghaziabad, The plaintiff was doing transport business under the name and style "Victory Transport Company (Private) Limited'. On account of high quality service rendered by the plaintiff to its numerous customers, its trade name "Victory Transport Company" had come to be associated with high quality transport carrier, The name and essential feature of this trade name of the plaintiff was the word 'Victory' Defendant No. 2 was the managing partner of defendant number 1 concern. Previously, defendant No. 2 was working as an agent for the plaintiff company on commission basis for packing and delivering goods for the plaintiff company at Ghaziabad. His agency was, however, terminated in July 1979. Lately, the said defendant started an independent business of his own as transport carrier under the name and style of Victory Goods Transport Company, "which was deceptively identical with the trading name of the plaintiff company. The defendants were deceiving the customers of the plaintiff, thereby causing substantial loss to the business of the plaintiff. The defendants had put up signboards carrying the name of the plaintiff company along with their own signboards at Grand Trunk Road, Ghaziabad, where they had their office. The customers of the plaintiff were thus being led away by the defendants and
Indian Kanoon - http://indiankanoon.org/doc/1813269/ 1

Victory Transport Co. Pvt. Ltd., ... vs The District Judge, Ghaziabad And ... on 10 September, 1981

hence the suit. 7. The defendants, filed a written statement and asserted as follows. The word "Victory" was not a trade name, It was only a "laudatory expression" which could not entitle the plaintiff to any monopolistic rights in respect thereto and in any case, the name "Victory Goods Transport Company" was not identical with or similar to the name of the plaintiff company. The two trade names were distinctly different and were not capable of causing any confusion in the market amongst the customers. No specific instances were quoted by the plaintiff in support of its allegation that its customers were being led away or deceived in any manner. The allegation, therefore, that the plaintiff was suffering any loss of business in consequence of the name and style under which the defendants had been doing business was, therefore, completely wrong and baseless, The defendants were, at all events, doing business under the name and style "Victory Goods Transport Company Registered" ever since 1967. Furthermore, it was wrong to say that the plaintiff had come to acquire any goodwill or distinction in respect of the trade name under which it was carrying on its business so as to entitle it to this sort of injunction. The plaintiff had neither a prima facie case, nor was the balance of convenience in its favour. On the contrary, the defendants who were doing business under the aforesaid name and style ever since 1967 would suffer a serious setback in their established business and would suffer irreparable loss, if the injunction prayed for was granted to the plaintiff. 8. Both the trial Court as well as the learned District Judge, Ghaziabad on appeal have declined to issue the temporary injunction. 9. Learned counsel for the petitioner contended that the Courts below committed a patent error of law in refusing injunction to the petitioner. It was submitted that the name adopted by the defendants was not deceptively identical with and similar to the petitioner's trade name that an unsuspecting average customer was bound to be misled. In refusing to grant temporary injunction, it was argued, the Courts below do not seem to have comprehended truly and correctly the applicable principles governing such actions. Learned counsel cited a few decisions in support of his submission on what ought to be the proper approach to such cases. The burden of counsel's submissions was on the similarity in the trading name adopted by the defendants to that of the petitioner which was according to him, per se sufficient to warrant the temporary injunction. 10. Learned counsel for the defendants on the other hand, vehemently contended that this Court was not hearing an appeal from the decision of the Courts below. This Court was called upon, it was urged, to exercise its extraordinary jurisdiction under Article 226 of the Constitution of India. It was submitted that, therefore, if the Courts below had set before them applicable principles governing grant of injunctions in such action, this Court would not be justified in interfering with the orders passed by the Courts below merely because it is inclined to take a different view of the facts. In support of the submission counsel cited, AIR 1955 Sc 558 and AIR 1976 All 261. It was further argued that the findings recorded by the Courts below on both the main issues, namely, existence of a prima facie case and balance of convenience, were findings of fact and not being vitiated by any error of law, this Court ought not to interfere with the same. 11. Having heard learned counsel for the parties, I find no merits in this petition. I am inclined to agree with the submission of the learned counsel for the defendants-respondents. In my opinion, both the Courts below appear to have comprehended "the applicable principle governing the grant of a temporary injunction in an action of the present character correctly. Both the trial Court as well as the appellate Court directed themselves properly in law. They called their attention to matters which were relevant and proper and applied tests which can be spelled out of the various judicial precedents bearing on the subject. 11A. The action which has given rise to this petition is in essence 'a passing off action'. This class of suits, it has been held by their Lordships of the Supreme Court, must be distinguished from the actions brought on the complaint of infringement of trade marks, which are governed by express statutory provisions, namely, Trade and Merchandise Marks Act (See AIR 1972 SC 1359 Parle Products (Private) Limited v. J. P. & Company,
Indian Kanoon - http://indiankanoon.org/doc/1813269/ 2

Victory Transport Co. Pvt. Ltd., ... vs The District Judge, Ghaziabad And ... on 10 September, 1981

Mysore). Their Lordships quoted the following excerpts from an earlier decision of the Supreme Court reported in Durga Dutt v. Navratna Pharmaceutical Laboratories, AIR 1965 SC 980 with approval (at p. 990) :-"While an action for passing-off is a Common Law remedy being in substance an action for deceit, that is, a passing-off by a person of his own goods as those of another, that is not the gist of an action for infringement. The action for infringement is a statutory remedy conferred on the registered proprietor of a registered trade mark for the vindication of the exclusive right to the use of the trade mark in relation to those goods (vide Section 21 of the Act). The use by the defendant of the trade mark of the plaintiff is not essential in an action for passing off, but is the sine qua non in the case of an action for infringement." "In an action for infringement, the plaintiff must, no doubt, make out that the use of the defendant's mark is likely to deceive, but where the similarity between the plaintiff's and the defendant's mark is so close either visually, phonetically or otherwise and the Court reaches the conclusion that there is an imitation, no further evidence is required to establish that the plaintiff's right are violated. Expressed in an other way, if the essential features of the trade mark of the plaintiff have been adopted by the defendant, the fact that the get-up packing and other writing or marks on the goods or on the packets in which he offers his goods for sale show marked differences or indicate clearly a trade origin different from that of the registered proprietor of the mark would be immaterial; whereas in the case of passing off, the defendant may escape liability if he can show that the added matter is sufficient to distinguish his goods from those of the plaintiff." 12. Learned counsel for the petitioner placing reliance on the observations made in paragraph 9 of the judgment of their Lordships of the Supreme Court in Parle Products (Private) Limited case (supra) submitted that the lower appellate court was in error in thinking that the question whether the trade name adopted by the defendants was deceptively similar to that of the plaintiff, had to be decided by putting the two trade names side by side and finding out whether they could not be distinguished from each other. In my opinion, the observations made by their Lordships of the Supreme Court in paragraph 9 of the said decision do not help the petitioner at all. In the first place, their Lordships themselves had made it clear earlier in the judgment in paragraphs 6 and 7 that the tests to be applied in the two classes of suits mentioned above are not the same, and that for the success of an action for infringement of trade mark, it was sufficient to show that the essential features of the trade marks of the rivals were the same. It was in the light of these tests that their Lordships made the observations mentioned in paragraph 9 of the judgment with a view to finding out whether there was an infringement of trade mark within the four corners of the Trade and Merchandise Marks Act. 13. In regard to a 'passing off' action, it seems to me that according to settled law, there are broadly two tests which have to be applied for determining the question whether the plaintiff is entitled to an injunction. The law on the subject has been very succinctly stated in the following decisions, the first two of which were cited by counsel for the defendant, and the third by the petitioner's counsel:-1. Teju Singh v. Shanti Devi, AIR 1974 Andh Pra 274 (paragraph 8), 2. Asiatic Government Security Life Assurance Company Ltd. v. New Asiatic Insurance Co. Ltd., AIR 1939 Mad 555 3. AIR 1942 Bom 241. The suggested tests are:-1. Whether the words used in the trade names of the plaintiff are mere descriptive words of common use or have they come to acquire a distinctive or secondary meaning in connection with the plaintiff's business so that the use of those words in the trade name adopted by another was likely to deceive the public? (See AIR 1974 Andh Pra 274 (Paragraph 8)). This test relates to the reputation which the plaintiff claims for itself.
Indian Kanoon - http://indiankanoon.org/doc/1813269/ 3

Victory Transport Co. Pvt. Ltd., ... vs The District Judge, Ghaziabad And ... on 10 September, 1981

2. Whether there is a reasonable probability that the use of the name adopted by the defendants was likely to mislead the customers of the plaintiff by reason of similarity of the two trade names, 14. In order to succeed the plaintiff has to establish both these things. Furthermore, Madras High Court in the case reported in AIR 1939 Mad 555 (supra) observed that for the success of a passing off an action, it was not sufficient to show that there was a similarity of names, but that there was a reasonable probability that the use of the name complained of the defendants would result in the defendants' appropriating some material advantage of the plaintiff's business. 15. I am in respectful agreement with the enunciation of the law by all the three High Courts in the cases mentioned above. These High Courts have rightly emphasised that the Court shall insist on a very high standard of proof before it would grant injunction in favour of the plaintiffs, in view of the seriousness of the repercussions which such an injunction is bound to have on the rights of the defendants. The injunction prayed for in such cases prohibits the defendants altogether from carrying on their existing business under a trade name adopted by it at the instance of a plaintiff whose claim is founded on no more than such illusive concepts as 'reputation' or goodwill and so forth. In the cases of infringement of trade marks, the right is founded on registration of the mark which per se is property. It must be borne in mind that in the case of an action on infringement of a trade mark in view of the statutory provisions. (The Trade and Merchandise Marks Act), a similarity in the trade marks is per se actionable. In passing off actions, however, the plaintiff has to prove further that his trade name has by reputation and use, come to acquire a secondary meaning indicating distinctiveness and quality of the business being carried on by him. 16. It is precisely these tests which the courts below have applied to the facts of the present case. Indeed, both the courts below have specifically relied on the case reported in AIR 1974 Andh Pra 274 (supra). Applying these tests, the courts below have held that on the material brought on the record, it was prima facie not proved that the name of the plaintiff's trading name had come to acquire that secondary meaning or reputation. They were not satisfied, on the present state of the record, that the trading name of the plaintiff concern was distinctive of its business or quality thereof. I fully agree with the conclusion reached by the courts below. On the material existing on the record, the view taken by the courts below could not be said to be wrong, much less one vitiated in law. The courts below have further observed that the name of the defendant's concern is not such as was likely to create a confusion in the market. This opinion of the courts below again cannot be said to be wrong or one which it is not reasonable to take having regard to intelligence of the average customer, who hire the services of transport carriers. 17. Learned counsel for the petitioner, however, vehemently contended that the question whether there was a likelihood of confusion as a result of similarity of the two trading names has to be decided from the standards of an average, unwary customer. I have no reason to think that the opinion ex- pressed by the courts below was formed without having this aspect in mind. It may be observed that the courts below were disposing of an application for temporary injunction. They were not, therefore, expected to express themselves more elaborately or categorically. When the courts below observed that the trading name of the defendant was not such as was likely to cause any confusion in the market of transport business, they must have had in their mind the class of persons which normally hires a transport carrier. 18. It may be mentioned that the trial court has given a further finding that the balance of convenience is also in favour of the plaintiffs. From a perusal of the affidavits filed in the courts below on behalf of the two parties, I find myself in agreement with the conclusion reached by the trial court on the issue of balance of convenience. There is absolutely no material on the record which might justify the conclusion that the plaintiffs would suffer greater loss than the defendants, much less irreparable loss. 19. Thus in the view of the matter, the decision of the courts below in refusing to grant a temporary injunction cannot be said to be wrong or unjustified. In my opinion, on the material existing on the record, their conclusions were fully justified.
Indian Kanoon - http://indiankanoon.org/doc/1813269/ 4

Victory Transport Co. Pvt. Ltd., ... vs The District Judge, Ghaziabad And ... on 10 September, 1981

20. Learned counsel for the petitioner cited a few decisions reported in:-1. Bhandari Homeopathic Laboratories & Co. v. L. R. Bhandari, 1976 Tax LR 1382 (Delhi); 2. Anglo Dutch Paint, Colour & Varnish Works (P) Ltd. v. India Traders House, AIR 1977 Delhi 41; 3. Shyam Lal v. Interads Advertising (Private) Ltd. Co., AIR 1978 Delhi 270 and 4. K. M. Multani v. Paramount Talkies of India Ltd., AIR 1942 Bom 241. I have examined these authorities but with utmost respect I am of the opinion that the same are not of any assistance beyond the point where they lay down the principles. Each case has turned on its own facts. As regards the principles which have been laid down therein, I do not find them to be at variance with the decisions of the Madras and Andhra Pradesh High Courts referred to above, which the courts below have followed. 21. Furthermore, some of these decisions were cases arising out of actions for infringement of trade marks and not for 'passing off'. As regards the decision of the Bombay High Court namely AIR 1942 Bom 241, I find that observations therein are completely in accordance with the view I have ventured to take. Their Lordships have observed that in an action for 'passing off', the plaintiff must establish that he has come to acquire a reputation in respect of his business which is known by its trading name to the public dealing with the plaintiff, and that this must be established by actual results. Another observation made by the Bombay High Court is that in a 'passing off action' the question whether the use by the defendant of a trading name, which is similar to that used by the plaintiff is not really one of law, but a question of fact to be decided on the evidence of each case. 22. On the facts of the present case, I am clearly of the view that the conclusions reached by the courts below are perfectly sound and correct and call for no interference by this Court. 23. In the result the petition fails and is dismissed. The interim injunction granted by this Court is hereby discharged. There will be no order as to costs.

Indian Kanoon - http://indiankanoon.org/doc/1813269/