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Judgment
Z.S. Negi, J
Above miscellaneous petition filed along with the appeal is for direction from this Appellate Board to the Registrar of Trade Marks not to issue the
registration certificate, pursuant to the impugned order dated 2.7.2008, till the appeal is decided by the Appellate Board.
2 . It is stated in the miscellaneous petition for stay of the impugned order dated 2.7.2008 (in short the petition) that the respondent No. 1 filed trade
mark application No. 606409 for registration of the trade mark 'NALLI'S SILK SAREE CENTRE wit device of bust of woman' in class 24 in respect
of silk sari and textile goods claiming user since the year 1981, which was advertised in the Trade Marks Journal No. 1213 dated 16.12.1999 at pages
2366 and 2367. Thereupon the appellant, which is a partnership firm trading as Nalli Chinnasami Chetty and the proprietor of mark 'Nalli' registered
under No. 472754, filed notice of opposition being No. BOM-55054 claiming that the appellant is the prior adopter and user of mark Nalli which is
registered on the basis of application dated 27.5.1987 and the mark has acquired tremendous reputation and goodwill due to extensive, continuous and
long use and by incurring huge expenses for promotional activities. The mark is used in throughout India and in certain other countries of the world.
After completion of procedural requirements, the Assistant Registrar of Trade Marks heard the matter and by order dated 2.7.2008 dismissed the
opposition and ordered the application to proceed to registration for sale of goods in all jurisdictions other than in the State of Tamil Nadu and use in
the form of label mark after notification in the Trade Marks Journal.
Aggrieved by the impugned order dated 2.7.2008, the appellant has preferred an appeal and also sought for stay of the impugned order and to direct
the Registrar of Trade marks not to issue the registration certificate till the appeal is decided. The grounds taken up are, inter alia, that the appellant is
the prior adopter of the mark and has been using the mark Nalli since 26.1.1935 in respect of textile piece goods including sarees, etc.; that the
respondent No. 2 has erred in not taking on record the fact that even as of the early 1970's, the word Nalli, which forms the integral and dominant part
of the appellant's trade name, was represented in a distinctive and prominent manner to have the effect of a brand and this distinctive mark is
exclusively identified with the appellant's concern; that the respondent No. 2 erred in not taking the bad faith involved in adoption of the label mark by
the respondent No. 1 who adopted the same having full knowledge of use of the mark by the appellant and the respondent No. 2 failed to direct the
respondent No. 1 to explain as to how it came upon the adopting this mark which was already well known in the market and solely associated with the
appellant's concern in the year 1981; that the respondent No. 2 has failed to appreciate the evidence of user and reputation adduced by the appellant in
support of opposition; that the respondent No. 2 has wrongly construed the issue of deception and confusion and that the respondent No. 2, whereas
the respondent No. 1 has not filed any document to prove the alleged claim of use of the impugned mark; that respondent No. 2 grossly erred in
holding that the appellant has acquiesced by not taking action against the respondent No. 1 for all these long years and also holding that the opposition
fails on this account and that the documents filed by the appellant in support of opposition showed beyond doubt the bad faith of respondent No. 1 in
the adoption of the mark NALLI with a face of woman as well as the impugned order is also bad in holding that the impugned mark is entitled to be
registered under Section 12 of the Act. The appellant has averred that grave prejudice will be caused to it if the impugned order is not stayed as its
mark is registered for more than a decade and the very purpose for which this appeal is filed will get defeated.
Copies of the appeal along with the stay petition were sent to the respondents in October, 2008 but the respondent No. 1 has sought extension of
time for filing the counter-statement which was allowed till 28.2.2009. However, the respondent No. 1 did not file reply to the stay petition. The stay
petition came up before us for hearing on 5.2.2009 when Shri Amit Janshandekar, Advocate appeared for the appellant and Shri Mohan Vidhani,
Advocate appeared for the respondent No. 1.
Learned Counsel for the appellant submitted that the trade mark Nalli written in a stylized manner was though applied for registration by the
appellant on 27.5.1987 was actually in use since 26.1.1935 in respect of goods in class 24. He took us through the copy of Trade Marks Journal
(Journal No. and date of publication not found on that page) to corroborate his submission. He further submitted that the appellant has adduced
sufficient evidence before the respondent No. 2 to establish its adoption, use and reputation and goodwill accrued to its trade mark but despite that the
respondent No. 2 has held as under:
Now I take up Opponents objection under Section 11 and 12 of the old Act and Section 11 of the present act as stated in earlier paragraphs respective
marks used and registered are distinct and dissimilar the question of confusion and deception does not and would not arise at this stage when the mark
has been continuously used since the year 1981. Further the applicants trade mark has acquired goodwill and reputation by virtue of long and
continuous use which has been established beyond doubt by the applicants whereas the evidence filed by the opponents can hardly be said that
opponents have discharged the onus of proof cast upon them and they have failed to prove the user of the mark. Objection under Section 9 and 11 of
the Act is rejected.
The learned Counsel pointed out that the onus to prove the user of the mark sought to be registered by the respondent No. 1 and that its registration
will not cause confusion or deception is on the respondent No. 1 which has not been discharged by the respondent No. 1. Relying upon the judgment
of the Supreme Court in National Sewing Thread Co. Ltd. v. James Chadwick and Bros. Ltd., A.I.R. 1951 Sc 357, learned Counsel asserted that the
Registrar ought to have to see whether looking at the circumstances of the case the trade mark of the respondent No. 1 is likely to deceive or cause
confusion, which the Registrar has not done. Learned Counsel placing reliance in the decision of this Appellate Board in Mr. Sushil Jindal, Trading as
M/s. Sushil Electricals, Ludhiana v. Jindal Electricals, Ludhiana and Assistant Registrar of Trade Marks, New Delhi, MIPR 2008 (3) SNC 1,
submitted that the true test for determining the deceptive similarity between two marks is whether in totality, the proposed marks are such that they
are likely to cause confusion or deception or mistake in the minds of the persons accustomed to the existing trade mark. Further, honesty of adoption
and user is the sine qua non for application of Section 12 of the Trade Marks Act, 1999. It was also submitted that the respondent No. 2 has
erroneously held that the appellant have acquiesced by not taking action against the respondent No. 1 for the last several years. By referring to the
ruling given by the Apex Court in Power Control Appliances and Ors. v. Sumeet Machines Pvt. Ltd., (1994) 2 SCC 44 8the learned Counsel
submitted that acquiescence is sitting by, when another is invading the rights and spending money on it. It should involve positive act by the proprietor
of an earlier mark inconsistent with a claim of exclusive right. In fact the respondent No. 2 failed to appreciate that in the present case the appellant
has been vigilant and have consistently opposed all the applications filed by the respondent No. 1 and as a matter of fact the appellant have duly
instituted proceedings under MAS-56475 for cancellation of 'NALLI' trade mark registered in the name of mother of Mr. Sambasivam of M/s. Nalli's
Silk Sari Centre (the respondent No. 1) under No. 366240 as of 17.9.1980 and the same is pending before the Trade Marks Registry. Having regard
to what is stated here before, there does not arise any question of appellant's acquiescence and the defence under Section 33 claimed by the
respondent No. 1 is also not available to it. The learned Counsel concluded by submitting that the stay prayed for may be granted otherwise the whole
purpose of filing the appeal will get defeated as the appellant has fair chances of succeeding in the appeal.
6 . Learned Counsel for the respondent No. 1 while vehemently opposing the stay petition submitted that the appellant has by a Deed of Settlement,
dated 8.2.1997 consented to amend the Application for registration of word mark Nalli (objected to by the registrar of Trade Marks, Singapore) to
Nalli word mark to include the device of a woman's head. From the perusal of Schedule A and Schedule B of the said Deed, it is clear that both the
marks are different and there is no likelihood of causing any confusion or deception in the trade. The present registered mark disputed by the appellant
is similar as the appellant has consented to respondent No. 1 to amend before the Registrar of Trade Marks Singapore, therefore the objection raised
by the appellant by way of appeal is frivolous. He submitted that the claim of the appellant that its trade mark is in use throughout India is contrary to
paragraph 12 of affidavit of Dr. N. Kuppusami Chetty (evidence in support of opposition) wherein it is admitted that the appellant's products bearing
the trade mark NALLI are sold only through its establishments. Learned Counsel also pointed out that the others have also obtained registration of the
word mark Nalli in class 24 and took us through to pages 146-147 of appeal and submitted that the said registration is renewed and subsisting.
After having heard the learned Counsel for both the parties and having perused the documents available on record, the issue for our consideration is
whether stay as prayed for may be granted. Section 95 of the Trade Marks Act, 1999 which deals with conditions as to making interim orders, provide
that no interim order shall be made on, or in any proceedings relating to, an appeal unless copies of such appeal and of all documents in support of the
plea for such interim order are furnished to the party against whom such appeal is made or proposed to be made and opportunity is given to such party
to be heard in the matter. In the present case stay of impugned order and of issuance of registration certificate is sought by the appellant and copies of
appeal and stay petition were forwarded to respondents vide notice on Form 'C' dated 23.10.2008 and the notice of hearing have been sent to all the
parties on 15.1.20089 and thus the requirements of Section 95 of the Act have been complied with. Now for considering the prayers made in the stay
petitions, we are required to consider prima facie case, balance of convenience and irreparable injury. These well established principles govern the
exercise of discretionary power of issuing interim injunction or stay order as may be sought for by the applicant. We have noticed that there the
appellant has adduced sufficient evidence before the respondent No. 2 to prove its prior adoption and use of its mark. The copy of Trade Marks
Journal shows the date of user, statement of year wise sales (from the audited accounts) from 1970-71 to 1989-90 accompanied by certain copies of
invoices filed in support of opposition show continuous and ever developing business. The respondent No. 2 has admitted the presence of these
documents in para 4 of the impugned order. Statement of advertisement expenses certified by the Chartered Accountant has been filed from the years
1970-71 to 1999-2000 which is to the tune of Rs. 1,26,39,648.92 in the year 1999-2000. In the affidavit of Mr. N. Kuppusami filed in support of the
firm's application for registration of trade mark Nalli under No. 47275 shows year wise sales and advertisement expenses from the year 1963-64 to
1989-90. Copies of advertisements are also available on the record. On the face of these documents, prima facie it is difficult to agree with the
conclusion arrived at by the respondent No. 2 that the evidence filed by the opponent can hardly be said that it has discharged the onus of proof cast
upon it and it has failed to prove the user of the mark. When the finding of user is prima facie erroneous, the findings in relation to other provisions of
the Trade Marks Act, 1999 will be influenced by the said erroneous finding. We are inclined to agree with the averment made in the application that
the respondent No. 2 has not sought explanation from the respondent No. 1 as to how it came to settle on the impugned mark when it knew that the
similar/identical mark is in use before its adoption by it. In the absence of any finding that the respondent No. 1 has honestly and bonafidely adopted
the impugned mark, the respondent No. 2 has no basis to hold that the applicant is entitled to registration under Section 12 of the Act. Further in view
of the submissions made by the counsel for the appellant against the observation of the respondent No. 2 that the appellant has acquiesced, we are
prima facie of the view that such observation may be difficult to sustain. The counsel for the respondent No. 1 while referring to Deed of Settlement
has missed the point that the consent by the appellant was given only for the Singapore jurisdiction as is evident from para 2 which state that the 1st
party (Respondent No. 1 herein) shall register and use the mark Nalli on their products and packaging (including carrier) in Singapore only in the form
shown in Schedule B. Further the statement referred to at para 12 at page 44 of the appeal, did not say that the appellant's goods is not sold by them
on all India basis. On the contrary the appellant at para 18 of the stay petition has averred that the appellants have their business outlets under the
brand NALLI in several jurisdictions in India such as Chennai, New Delhi, Hyderabad, Mumbai, Bangalore, Vishakhapatnam, etc. Hence, the
submissions to these effects made by the counsel for the respondent No. 1 are unacceptable. The submission of the counsel for the respondent No. 1
that others have registered the trade mark NALLI by referring to pages 146-147 is not sustainable as that referred mark is under rectification
proceedings. We are of the opinion that, the appellant has made out the prima facie case for stay, and we need not any more go into the other grounds
specified in the stay petition. We do not visualise any prejudice or hardship that may be caused to the respondent No. 1 as it can still carry on its
business under the common law rights and as such the balance of convenience is in favour of the appellant.
8 . The result is that the applicant has established a prima facie case for interim injunction and the balance of convenience is in favour of the appellant.
We, therefore, grant stay in terms of prayer (i) and (ii) of para 26 of the stay petition that is to say, the impugned order dated 2.7.2008 is stayed and
the Registrar of Trade Marks is directed not to issue registration certificate in application No 606409 in class 24 till the appeal is disposed of by the
Appellate Board. There shall be no order as to costs.