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Judgment
S.N. Sapra, J.—The present suit for perpetual injunction, infringement of trade mark, passing off and rendition of accounts has been filed by two plaintiff''s, namely, Sarabhai International Limited and Ambalal Sarabhai Enterprises Limited.
In the plaint, it has been alleged that plaintiff No. 1 is a leading Indian Export House recognised by the Government of India and it is engaged in the export of drugs, pharmaceuticals and allied items, chemicals, dyestuffs & pigments, synthetic detergents, soaps, cosmetics, toiletries ,laboratory chemicals, computer hardware and software, machinery and equipments, textiles ,and are engaged in other services including designing, packaging & printing. Plaintiff No. 1 has exported to various countries during the last 8 years the aforesaid goods to the tune of about 46.20 crores of which 7.24 crores (approximately) accounts for Drugs and Pharmaceuticals alone. The name Sarabhai International Limited is well known for the last many years in the field of export of the aforesaid goods, and by virtue of huge exports -it has acquired considerable goodwill amongst manufacturers and dealers as well both in India and abroad.
Plaintiff No. 2 is the owner of the trade style/trade name SARABHAI CHEMICALS and goodwill pertaining thereto in respect of medicinal, pharmaceutical and veterinary preparations by virtue of assignment deed dt/- 25th April,, 1978. The trading style SARABHAI CHEMICALS has been used by plaintiff 2 and their predecessors in business and title for the last more than 30 years with respect to the aforesaid goods. The goods manufactured by plaintiff 2 are exported by and through plaintiff 1, as an associate company.
It is further alleged that plaintiff 2 is the proprietor of the following trade marks registered under the Trade and Merchandise Marks Act, 1958 (hereinafter called the Act):
"(a) Trade mark containing the word ''SARA'' under No. 113071 in Class 5 as of 27-8-1945 in respect of pharmaceutical, veterinary and sanitary substances; infants and invalids'' foods, plasters, material for surgical bandaging; materials for stopping teeth; dental wax; disinfectants, preparation for killing weeds and destroying vermin.
(b) Trade mark containing the word ''SARA ''under No. 113072 in Class 1 as of 27-8-1945 in respect of chemical products used in industry, science, photography, agriculture, horticulture, forestry, manures, (natural and artificial); fire extinguishing compositions; tempering substances and chemical preparations for soldering; chemical substances for preserving food stuffs; tanning substances; adhesive substances used in industry."
The registration of the aforesaid trade marks have been renewed from time to time and the registration is subsisting and valid
Plaintiff No. 2 is also the proprietor of trade mark SARABHAI per se and SARABHAI emblems. At the time of filing of the suit it was alleged that the trade mark S AR ABHAI and SARABHAI emblems were pending for registration under No. 310659B, 310658B as of 9-12-1975 and No. 361884 as of 15-5-1980 in respect of medicinal, pharmaceutical and veterinary preparations in Class 5 under the Act.
However, during the pendency of the suit these trade marks have been registered vide aforesaid numbers. According to plaintiff 2 the trade mark Nos. 310658B, 310659B and 361884 are being used since March, 1977. The sales turnover of the goods under the marks SARABHAI and SARABHAI emblems during the period March, 1977 to June, 1981 is approximately Rs. 223.34 crores. The expenditure incurred to make the products, bearing these trade marks known to Doctors, chemists, general public and all other concerned is of the order of Rs. 17.38 crores. It is further alleged that plaintiff 2 and his predecessors in business and, title, manufactured, sold and offered for sale the above mentioned goods during the last 30 years under the trade name/trading style SARABHAI CHEMICALS to the tune of Rs. 549.78 crores. The present annual sale is approximately Rs. 56.56 crores. The plaintiff''s have further stated in the plaint that by virtue of long, continuous and extensive user, huge sales and expenditure incurred the trading style SARABHAI CHEMICALS and the trade marks SARA, SARABHAI AND SARABHAI emblems have acquired very wide reputation, goodwill and name all over India and abroad in respect of pharmaceutical, medicinal and veterinary preparations and the said trading style and trade marks are exclusively associated with the plaintiff and none else
It was only of June 20,1981, plaintiff 2 came to know of the existence of the defendant i.e, Sara Exports International and their alleged activities when a letter dt/- June 14, 1981 from defendant was received by. plaintiff 2. In the letter defendant stated that they were having connections with eastern markets importing drugs and pharmaceuticals. Thereafter, the defendant was called upon to discontinue with use of the word ''SARA'' as part of the trading style Sara Exports International This was followed by another letter sent by registered AD post The defendant did reply to the aforesaid letters but refused to accept the suggestions made by plaintiff''s. Thereafter when defendant was again asked to discontinue with the use of the trade name ''SARA'' but no reply was given.
Vide order dt/- Sept. 21,1982 ex parte temporary injunction was granted in terms of prayer as contained in I. A. 3475 of 1982 against the defendant.
Defendant filed written statement in suit. In the written statement defendant took various preliminary objections. In the written statement, it was alleged that name of the daughter of proprietor of defendant was "SARA" and on account of this name defendant 1 adapted the word "SARA" in the trading style. It was further alleged that the trading name Sara Export International was duly registered and none of the plaintiff''s had raised any objection against the registration of the trade mark/trading style i.e. Sara Exports International, therefore, the plaintiff''s were estopped to raise any objection. It was further alleged in the written statement that trading style/trading mark/ trading emblems of the plaintiff are "SARABHAI", which is absolutely distinguishable and different from the word "SARA".
On the pleadings of the parties on Sept. 15, 1983 the following issues were framed :
"1. Whether the plaint has been signed, verified and instituted by a duly authorised person?
Whether plaintiff 2 is the registered proprietor of the word/mark SARA under numbers 113071 and 113072, if so to what effect?
Whether plaintiff''s are the proprietors of trade mark SARABHAI, if so to what effect?
Whether the defendant''s use of the word/mark SARA in their trading style is an infringement of plaintiff 2''s registered trade mark SARA?
Whether the defendant''s trading style "SARA Export International" is deceptively similar to the plaintiff No. 1''s trading style "Sarabhai International" and plaintiff No, 2''s trading, style "Sarabhai Chemicals"?
Whether the defendants by using the trading style "Sara International" are passing off their goods and business, and are likely to pass off their goods and business as those of the plaintiff''s?
Whether the trade name of the defendant is registered under any law, if so to what effect?
Relief."
Vide order dt/- Nov. 5, 1984 M.''K. Chawla, J. allowed the interim application I. A. 3475 of 1982 and confirmed the ad interim injunction already granted in favour of the plaintiff by order dt/- Sept. 21, 1982. On several dates none appeared on behalf of the defendant. Vide order dt/- Nov. 18,1985 M.K. Chawla, J. observed that since Nov. 15, 1984 defendant had not cared to file the list of witnesses in spite of eight opportunities. Even nobody was present and, therefore, it was held that the provision of O. 17, R. 3, C.P.C. could be invoked.
Evidence of three witnesses of the plaintiff''s was recorded on Commission. P.W. 1 Shri J.S. Kothari proved various documents which were exhibited as Exts. P.W.1/1 to P.W. 1/49.P.W. 2.ShriS.M. Dongre was examined and he proved documents which were exhibited as P.W.2/1 to P.W.2/8. P.W. 3 Shri H.A. Shah was examined and he proved the documents Exts. P.W. 3/1 to P.W. 3/14.
ISSUE NO. 1
Shri S.M. Dongre P.W. 2 has deposed that he has signed the plaint on behalf of plaintiff''s 1 and 2 in his capacity as he was the constituted attorney of the plaintiff''s. In his statement, he has further deposed that he identifies the signatures of one Mr. J.S. Kothari Mr. K.H. Bhatt who have also signed the plaint. He has proved two power of attorneys which are Ext. P.W.2/2 and P.W. 2/3. Therefore, issue No. 1 is decided in favour of plaintiff''s and I hold that the plaint has been signed and verified and the suit has been instituted by duly authorised persons.
ISSUE NO. 2
Plaintiffs have filed the legal proceedings certificates which are Exts. P.W./4 and P.W. 2/5 with regard to the registration in respect of the word "SARA" under Nos. 113071 in Class 5 as of 27-8-1945 and under No. 113072 in Class I as of 27-8-1945. Hence, plaintiff''s have proved that they are the proprietors of the trade marks containing the word "SARA" under No. 113071 in Class 5 as of 27-8-1945 in respect of the goods mentioned therein and 113072 in Class 1 as of 27-8-1945 in respect of the goods mentioned therein. Issue No. 2 is decided in favour of the plaintiff''s.
ISSUE NO. 3
Exts. PW. 2/6, PW. 2/7 and PW 2/8 are the Legal Proceedings Certificates pertaining to three trade marks Nos. 310658-B, 310659-B and 361884. Issue No. 3 stands proved in favour o f the plaintiff and plaintiff''s are the proprietors of the trade marks SARABHAI & SARABHAI emblem. These trade marks were registered during the pendency of the suit.
ISSUES Nos. 4, 5 and 6
Mr. Anoop Singh, learned counsel for plaintiff''s, contends that there are common fields of activities in respect of goods of the parties. Thus, there is likelihood of great confusion between the business activities and goods of the parties in India'' and abroad. He further contends that in the international markets it is likely to be taken that the goods exported by defendant are coming from the plaintiff''s, and are the manufacture of plaintiff 2 and exported by any of the plaintiff''s. He further contends that defendant''s adoption of the trading style SARA EXPORTS INTERNATIONAL and their offering for sale, selling, exporting and advertising goods and/or business under the said trading style/trade mark is fraudulent and is calculated to deceive and create confusion among the trade and general public in India and abroad and give an impression that defendant is an organisation, branch or a division of plaintiff''s or that they have some connection with plaintiff''s which in fact is not true. He further submits that the use of the word ''SARA'' as a part of defendant''s trading style ''SARA EXPORT INTERNATIONAL'' is an infringement of plaintiff 2''s registered trade mark Nos. 113071 and 113072 containing the word ''SARA as essential feature thereof. It includes the main portion of the registered trade of plaintiff''s.
P. W. 1. Shri J.S. Kothari is one of the Directors of plaintiff 1 and he has stated that he has travelled many times in India and abroad in connection with the activities of Sarabhai International Ltd. Ambalal Sarabhai Enterprises. Limited. He has deposed that Sara groups of companies are engaged in a number of industrial, business and research activities in many technological fields and many of these activities were sponsored by Shri Ambalal Sarabhai during his long business career which dates back to post World War I era. He has also stated that for the last 10 years his company has exported goods worth about Rs. 50 crores to various countries. According to him, by virtue of its business policy and exports during the last several years the name SARABHAI has acquired valuable reputation and goodwill amongst the concerned people in India and also among importers/ consumers in several countries of the World. Many of the goods exported are exported under the trade marks Sarabhai/Sarabhai emblem/Sara and/or other product trade concerned where the goods are manufactured by Sarabhai Chemicals/Sarabhai Machinery Divisions of Ambalal Sarabhai Enterprises Limited The trading style "Sarabhai Chemicals" is also used prominently for the goods manufactured by it and exported to various countries. He has deposed that the names Sarabhai Chemicals and trade marks and emblems SARA/SARABHAI which are extensively used on products manufactured by Sarabhai Chemicals division of plaintiff 2 are known to many doctors, chemists and general public all over India and abroad. He has proved that it was only in June, 1981 that the existence of defendant came to the notice of the plaintiff''s through a letter dt/- June 16, 1981. P.W. 2 Shri S.M. Dongre is the Legal Executive of plaintiff No. 1. P.W. 23. Shri H.A. Shah is a qualified chartered accountant and is Accounts Officer in the company, plaintiff 2. He has deposed that he has collected particulars of export turnover of plaintiff No. 2 for the past years relating to Sarabhai International Limited plaintiff 1. The information is Ext. P.W. 1/2. He has also proved the particulars of the sales turnover promotion expenses relating to Sarabhai Chemicals, division of plaintiff 2 and the same have been exhibited as P.W. 3/1 and P.W. 3/2. He has proved further documents also.
Learned counsel for the plaintiff''s has placed reliance on the judgments in case Rawel v. Duke Enterprises, 1975 RLR 440, Suit No. 163/74; Ellora Industries Vs. Banarsi Das Goela and Others, , K.G. Khosla Compressors Ltd. Vs. Khosla Extrakting Ltd. and Others, , and Hindustan Radiators Co. Vs. Hindustan Radiators Ltd., ). In case Ellora Industries Vs. Banarsi Das Goela and Others, M/s. Banarsi Dass and brothers were the registered proprietors Of trade mark ''Ellora'' in Class 14 as of the date August 11, 1956 in respect of watches, time pieces, clocks etc. The objection of plaintiff was to the use of the name Ellora Industries with Ellora as the trade mark by defendant. It was held as under : -
"Take the present case, The words "Ellora Industries" which is the trading name of the defendants is likely to mislead the public as to the source of manufacture and to create a likelihood that customer of the plaintiff''s would be diverted to the defendants. In a passing-off action "all that need be proved is that the defendants'' goods are so marked, made up or described by them as to be calculated to misled ordinary purchasers and to lead them to mistake the defendants'' goods for those of the plaintiff''s". It is the tendency to misled or confuse that thus forms the gist of action;. and the plaintiff need not establish fraud, nor that any one was actually deceived, or that he actually suffered damages. The tort is thus (like libel) actionable perse. Indeed the forms of passing off, like the forms of nuisances, are infinite. As Salmond puts it:
"The gist of the conception of passing off is that the goods are in effect telling a falsehood abou 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 (Law of Torts 17th Edn.p. 401) Winfield says :
"The law of passing off arose to prevent unfair trading and protects the property rights of a trader in his goodwill "
(Tort 9th Edn. p. 485)
"The function of the trade marks is to identify the source of manufacture of goods. It is an indicia of origin. With the expansion of markets and the development of large scale advertising, trade marks began to perform the additional function of an advertising and selling device. In the market the chief value of the trade mark is its power to stimulate sales. In Jaw, the fundamental theory upon which the interest in the trade mark is protected is that a trade mark identifies the goods coming from a particular source, and that an infringing designation tends to divert customer from that source by falsely representing that other goods come from it. This at any rate is the theory of Ss, 28 and 29 of the Act. Thus "Ellora Industries is an "infringing designation" a misleading name and its use must be restrained by injunction so that the competitor is prohibited from gaining an unfair advantage by confusing potential customers. "The tendency of law, both legislative and common, has been in the direction of enforcing increasingly higher standards of fairness or commercial morality in trade."
I am in respectful agreement with the judgment of Avadh Behari Rohtagi J.
There is sufficient documentary evidence on record to establish that the trading style Sarabhai Chemicals and the trade marks SARA/SARABHAI and SARABHAI emblems have acquired very wide reputation, goodwill and name all over India and abroad in respect of medicinal, pharmaceutical and veterinary preparations and said trading style and trade marks are exclusively associated with the plaintiff''s and none else. The aforesaid articles bearing the trade mark SARA and SARABHAI denotes and connotes the goods of the plaintiff and no one else, and is an indication of the source of manufacture as such. I am of the view that there are common fields of activities in respect of the similar if goods of plaintiff''s and defendant and the adoption of trading style Sara Exports International by the defendant and offering for sale, export and advertising the goods under the aforesaid trading style, that is Sara Exports International is calculated to deceive and create confusion amongst the doctors, chemists and the general public in India and the Importers and general public abroad The use of the trading1 style Sara Exports International creates an impression in the mind of the general public, dealers and importers that defendant may be an : organisation or a Division or Branch of the plaintiff''s. Plaintiffs have produced not only documentary evidence but the trust-worthy evidence on record.
I thus hold that the use by the defendant of the word/mark SARA in their trading style is an infringement of the plaintiff 2''s registered mark ''SARA''. I further hold that the use of the trading style Sara Exports International is deceptively similar to plaintiff- l''s trading style ''Sarabhai'' International and plaintiff 2''s trading style Sarabhai Chemicals. I am of the view that the defendant''s trading style i.e. Sara Exports International is deceptively similar to the trading style of the plaintiff''s Sarabhai International and Sarabhai Chemicals. I am of the view that there is a deceptive similarity of the trading name Sara Exports International with the name Sarabhai International Ltd. of plaintiff 1. On account of the deceptive trading style Sara Exports International which includes the main portion of registered trade mark of the plaintiff, the defendant is passing off, enabling others or causing and assisting others to pass off their goods and/or business as the goods and/or business of the plaintiff''s 1 and 2.
For the reasons stated above, it is held that there is an infringement of the registered trade marks of plaintiff''s by the defendant by adopting the trading style Sara Exports International In addition, defendant is also guilty of tort of passing off. Issue Nos. 4, 5 and 6 are decided in favour of plaintiff''s and against defendant.
ISSUE NO. 7
Defendant has not led any evidence to prove the registration. Even otherwise, this is not a relevant factor in view of the facts and circumstances of the present case. Issue No. 7 is decided against the defendant.
ISSUE NO. 8
The suit of the plaintiff''s is decreed as under : -
(a) A decree for permanent injunction restraining the defendant by themselves, their servants, agents stockists and all persons on their behalf from using the word ''SARA'' as part of their trading style/trade name ''Sara Exports International'' which is deceptively similar to the trading style Sarabhai International Limited of plaintiff No. 1 and the trading style Sarabhai Chemicals of plaintiff No. 2 and which includes registered trade mark SARA of plaintiff 2 or part of their trade mark SARABHAI;
(b) A decree for permanent injunction restraining the defendant themselves their agents, servants, dealers, importers and ail other persons acting for and on their behalf from infringing by using the trade mark ''SARA'' as part of defendant''s trading style/trading name SARA EXPORTS INTERNATIONAL in respect of goods for which plaintiff 2 is the registered proprietor of the trade mark SARA under No. 113071 in Class 5 and 113072 in Class 1;
(c) A decree for permanent injunction restraining the defendant themselves, their servants, agents, stockists and all other persons on their behalf from passing off or enabling others and causing or assisting others to pass off their business and/or goods as and for business and/or goods of the plaintiff''s by using the trading style ''Sara Exports International'' or any other trading style/trade name in which the word SARA forms a part The defendant is also directed to deliver up offending wrappers, cartons, labels ,stationary, literature, dies, blocks and all other material bearing the trading style Sara Exports International for destruction.
Plaintiffs are also entitled to costs of the suit.