Firm Gaylord Shangrila and Another vs Kwality Restaurant and Ice Cream Company, New Delhi

Khanna, J.—This appeal filed by firm Gaylord Shangrila of Chandigarh and its partner Basant Kumar Wadhera is directed against the order of learned District Judge, Ambala, whereby the appellants have been restrained during the pendency of the suit from carrying on with the use of the word ''Gaylord'' as part of their firm name and on their goods, literature, advertisements and premises.

The impugned order was made on an application under Order 39, Rules 1 and 2 read with section 151, Civil Procedure Code, in a suit brought by Messrs. Kwality Restaurant and Ice Cream Company of New Delhi, plaintiff-respondent, against firm Gaylord Shangrila, Chandigarh, and its partner Basant Kumar Wadhera, defendant-appellants. According to the allegations of the plaintiffs, they were carrying on their business under the trading style ''Gaylord Restaurant'' in New Delhi since 1952. The plaintiffs also started similar other concerns at New Delhi and Bombay bearing the distinctive trading style ''Gaylord'' which had become exclusively associated with the plaintiffs among the members of the public. The plaintiffs also used the word as their trade mark on their confectionery. The plaintiffs restaurant ''Gaylord'' acquired great reputation and good will on account of the high standard of service and quality of material supplied. The plaintiffs applied for the registration of the trade mark ''Gaylord'' but their application is still pending. The defendants started their restaurant at Chandigarh under the trading style ''Gaylord Shangrila'' on 15th July 1961. The plaintiffs on coming to know of the intention of the defendants served a notice on 7th July 1961 upon the defendants to desist from starting their business. The defendants were also stated to have used the word ''Gaylord'' prominently while the word ''Shangrila'' was written in small letters. The defendants'' act, according to the plaintiffs, caused confusion in the minds of the people that it was the restaurant of the plaintiffs who thus suffered grave and irreparable injury. The plaintiffs accordingly prayed for a decree for permanent injunction restraining the defendants and their agents from using the word ''Gaylord Shangrila'' or ''Gaylord'' as their trading style and from passing off their goods as the goods of the plaintiffs. Beside some ancillary relief, the plaintiffs also prayed for a decree for recovery of Rs. 1,000/- as damages or in the alternative for accounts of the profits made by the defendants from their business.

The plaintiffs in their application for temporary injunction restraining the defendants till the decision of the suit from using trade style ''Gaylord'' or ''Gaylord Shangrila'' reiterated the allegations made in the plaint and averred that they had a prima facie case and the balance of convenience was also in their favour.

The defendants in their reply to the application stated that the word ''Gaylord'' was not at all associated by the public with the plaintiffs and that restaurants bearing the style ''Gaylord'' were in existence in Srinagar, Dhanbad, Ghaziabad, Lashkar and several other places in India. According to the defendants, they too had applied for registration of their trade mark. The word ''Gaylord'' was stated to be a Geographical expression and there was no motive on the part of the defendants to trade on the reputation of the plaintiffs or to mislead the public. The other allegations made by the plaintiffs were denied and it was stated that the laches on the part of the plaintiffs disentitled them to the relief which they sought.

The learned District Judge was of the view that the plaintiffs had a prima facie case and the balance of convenience was also in their layout and that it was a fit case in which the in junction for the duration of the suit should be granted.

I have heard the learned counsel for the parties at some length. It is argued by the learned counsel for the appellants that there is a usage in the hotel and restaurant business according to which hotels and restaurants of the same name exist in different places without there being any connection between them. There are, it is stated, Grand Hotels in Calcutta, Simla, Ambala and other places. The owners of those hotels are different and there is no connection between them. Likewise, there are Savoy Hotels, Imperial Hotels and Claridge Hotels at different places without any connection between them. This usage, according to the learned counsel, can be taken note of by the Courts u/s 122 of the Trade and Merchandise Marks Act 1958 which is to the following effect:-

Trade usage, etc., to be taken in to consideration.-In any suit or other proceedings relating to a trade mark, the tribunal shall admit evidence of the usages of the trade concerned and of any relevant trade mark or trade name or get up legitimately used by other persons.

It is further argued on behalf of the appellants that Gaylord Restaurants are also to be found in different places and are being run by parties different from the plaintiffs. The word ''Gaylord'' is stated to be a Geographical name and not a coined or fancy expression and the plaintiffs can claim no originality about it. Injunction, it is further argued, should be refused because of delay in filing the suit. The learned counsel has also contended that the balance of convenience lies not in stopping the business of the appellants but in putting them to terms. An offer has also been made on behalf of the appellants to display the word ''Shangrila'' along with the word ''Gaylord'' on the sign-board of the appellants and on the cash memos and the menu books as prominently as the word ''Gaylord''. Offer has also been made on behalf of the appellants to issue a notice in a newspaper that the restaurant of the defendants has no connection with that of the plaintiffs.

The learned counsel for the respondents has controverted the above contentions on behalf of the appellants and has argued that the appellants are trying to trade on the reputation and the good name of the plaintiffs by use of the word ''Gaylord''. It is also argued that the Court below having granted temporary injunction its order should not be lightly interfered with.

Most of the contentions of the learned counsel for the parties are on the point as to whether the plaintiffs'' suit should be ultimately decreed or dismissed and although they have bearing in the context of the plaintiffs having a prima facie case or not. I am of the opinion that at this stage I should refrain from expressing any view in the matter lest any observation of this Court might have the effect of prejudging the matter and prejudicing one party or the other at the time of the final decision in the trial Court. There are certain broad features of the ease to which a reference may be made in order to decide whether a temporary injunction for the duration of the suit should issue or not. No registration of the trade mark ''Gaylord'' has so far been effected in favour of the plaintiff and according to them their application for this purpose is still pending. The defendants started doing business under the name and style of ''Gaylord Shangrila'' on 15th July, 1961 and though the plaintiffs served a notice upon the defendants in the first week of July 1961 and subsequently also the present suit was filed on 24th May, 1962. In English case Bravingtons Ld. v. Barrington Tennant 1957 Reports of Patent Design and Trade Mark Cases, P. 183, the head note reads as under:-

The plaintiffs Bravingtons Ld. had traded as jewellers for over a century. In August, 1956, the Defendant Barriagton Tennant, using the name Barrington, opened a jeweller''s shop at 452, Strand, whose appearance was alleged to resemble that of a neighbouring shop of the plaintiffs. The plaintiffs issued a writ in December, 1956, and moved for an interim injunction restraining the Defendant from carrying on business at 452, Strand, except under his full name ''Barrington Tennant''.

Held by Upjohn, J., (1) That it was doubtful whether the similarity of the shops would deceive potential customers, (2) That there had been undue delay by the plaintiffs in taking action, (3) That in view of these facts no interim relief should be granted.

Dealing with the matter of delay, which was only of four months, it was observed as under:-

I think that is all I need say about the history of the matter except this. We are now in December, 1956, and the Defendant has been openly carrying on business since August, 1956. Delay in bringing proceedings is important in an interlocutory motion. It is explained, but, in my view, only partly explained, but the circumstance that in September somebody in the Plaintiff ''Solicitors'' firm made a search in the Business Names Register against the name of ''Barrington'' and through a most unfortunate slip (for which the Registrar of Business Names has since apologised) they were wrongly informed that there was no such entry. Therefore, some time was lost in suing the company Barrington Tennant Ld. who, for the reasons I have mentioned, have absolutely no connection with this matter at all. It was only later that they discovered the true identity of the Defendant. Nevertheless, it does seem to me remarkable that they have taken all this time to find out who the defendant was, when a letter addressed to the shop might possibly have brought forward some perfectly adequate reply for the purposes of the Defendant being sued. Therefore, it does not seem to me that the plaintiffs have really acted with the speed with which they ought to have acted.

Interim injunction was refused and it was further observed:-

But, of course, there is a triable issue and the less I say about the merits the better. The matter can be fully debated when the Judge who hears the case will have the advantage of oral evidence, cross-examination, and so on.

The defendants in the present case have already carried on their business for about ten months and the balance of convenience, in my opinion, lies not in stopping the business of the defendants altogether during the pendency of the suit but in putting them to terms. The effect of the temporary injunction has virtually been to grant the decree prayed for by the plaintiffs even before the recording of the evidence. For the purpose of putting the defendants to terms, they can be directed, as offered on their behalf, to display the word ''Shangrila'' along with the word ''Gaylord'' as prominently as the word ''Gaylord'' on the sign-board, cash memos, cartons and menu books, The defendants can also be directed to maintain true and proper accounts and file them periodically in Court and to furnish security for payment of profits to the plaintiffs in case the plaintiffs ultimately succeed in the suit. The defendants can further be directed to publish a notice in newspapers as offered on their behalf to the effect that their concern has nothing to do with the plaintiffs'' concern.

The learned counsel for the plaintiff-respondents has referred to cases Ishar Das v. Firm Bhaion Ki Dokan AIR 1940 Lab 39, and Oriental Government Security Life Assurance Co. Ld. v. Oriental Assurance Co., Ld. ILR 40 Cal. 570, in which injunction restraining the defendants from the use of particular name during the pendency of the suit was issued. So far as the former case is concerned, temporary injunction was issued on the application of the plaintiff firm Bhaion Ki Dokan, which was carrying on business at Lahore, against the defendant which had started business at Lahore under the name and style Punjabi Bhaion Ki Dokan. It was held that the two names were so similar as to cause confusion in the mind of intending purchasers. In Calcutta case, the plaintiff was an old and well known Insurance Company, entitled Oriental Government Security Life Assurance Co. Ltd. The Company had a Branch Office in Calcutta. The defendant Company was incorporated in Calcutta in November 1912 with a small capital. It was held that in as much as the term ''Oriental'' had become identified with the plaintiff company, an injunction should issue restraining the defendant company from using the term ''Oriental'' in its name, as such user would be likely to deceive the public. The common feature of both the above cited cases was that the defendant started its business under a similar name in the same city in which the plaintiff was carrying on business. In the present case, however, the plaintiffs are carrying on business in New Delhi and Bombay while the defendants are carrying on business in Chandigarh. The learned counsel for the respondents has also cited case The Clock Ld. v. The Clock House Hotel, Ld., 1936 Reports of Patent, Design, Trade Mark and other cases, p 269. In that case, the plaintiffs'' restaurant opened an establishment known as road-house and it acquired the reputation and was known to many people as The Clock. The defendants'' restaurant, The Clock House Hotel Ld., was incorporated subsequently and opened a hotel at a point five miles south of the point occupied by the plaintiffs road-house. In an action brought by the plaintiffs to restrain the defendants from carrying on business under the name Hotel Clock House or any other name calculated to cause confusion with and damage to the business, it was held that the plaintiffs had acquired a reputation under the name of Clock in connection with their road-house and that in the locality the words ''The Clock'' had come to mean the plaintiffs'' premises. It was further held that the use of the words ''Hotel Clock House'' by the defendants constituted a real possibility of confusion which might result in actual damage to the plaintiffs. Injunction was granted restraining the defendants from using the words ''Hotel Clock House''. The facts of this case go to show that an important factor which weighed in the decision of the case was that the plaintiffs road-house and the defendants'' hotel were in the same locality. In the present case, as remarked above, the plaintiffs'' restaurant and the defendants'' restaurant are in two different cities.

After giving the matter my earnest consideration I am of the view that the present is not a fit case in which the temporary injunction should have been issued. The balance of convenience, that is the relevant amount of damage which seems likely to result if the injunction is granted and the plaintiffs ultimately fail or if it is refused and they ultimately succeed, in my opinion, lies not in stopping the business of the defendants but on putting them to terms. I accordingly accept the appeal set aside the order of the learned District Judge granting the temporary injunction and direct that the defendants shall display the word ''Shangrila'' on their sign-board, cash memos, cartons and menu books as prominently as the word ''Gaylord''. The defendants are further directed to maintain true and proper accounts and file statement of those accounts in the trial Court every three months during the pendency of the suit. The defendants should also furnish security to the satisfaction of the trial Court for payment of profits made by them to the plaintiffs up to the extent of Rs. 5,000/ in case the plaintiffs ultimately succeed in the suit. The defendants are also directed to publish general notices in the Tribune and Hindustan Times to the effect that the restaurant of the defendants has no connection with the restaurant of the plaintiffs. In case the defendants fail to furnish the security as mentioned above, the appeal shall be deemed to have been dismissed and the temporary injunction as issued by the trial Court shall stand. I make no order as to costs of the appeal. Looking to the facts of the case, it appears desirable that its hearing should be expedited. I accordingly direct the trial Court to expedite the hearing of the case. No observation herein contained should be construed as an expression of opinion in respect of any matter which may arise at the time of the final decision of the case in the trial Court.