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Tea Board India v/s I.T.C. Limited


Tea Board, India vs I.T.C. Limited, judgment delivered on 24 August, 2011

IN THE HIGH COURT AT CALCUTTA

Civil Appellate Jurisdiction

(Original Side)

Present:

The Hon’ble Mr. Justice Bhaskar Bhattacharya

And

The Hon’ble Mr. Justice Sambuddha Chakrabarti

G.A. No.1631 of 2011

A.P.O.T. No.245 of 2011

C.S. No.250 of 2010

Tea Board, India

Versus

I.T.C. Limited

For the Appellant: Mr. S.K. Kapoor, Mr. Ranjan Bachawat,

Mr. Vipul Kundalia,

Mrs. Rajashree Kundalia,

Mr. Ravi Kapoor,

Mr. Pithiraj Sinha,

Ms. Sonal Shah,

Mr. Kushagra Shah.

For the Respondent: Mr. Anindya Kr. Mitra, Mr. Abhrajit Mitra,

Mr. sarbopriya Mukherjee,

Mr. Soumya Sen,

Mr. Shaunak Mitra,

Ms. Debamitra Adhikari,

Ms. Siddique Parveen.

Heard on: 12.08.2011

Judgment on: 24th August, 2011.

Bhaskar Bhattacharya, J.:

This appeal is at the instance of a plaintiff in a suit for permanent injunction and is directed against order dated April 20, 2011 passed by a learned 2

Single Judge of this Court by which His Lordship rejected an application for interlocutory injunction in such a suit by which the plaintiff prayed for restraining the defendant from using or conducting or marketing in any manner or in any way carrying on its business at the hotel situated in Kolkata by using in any manner whatsoever the name “DARJEELING LOUNGE” or any other name or mark or word which is phonetically or structurally similar or identical or deceptively similar to the registered geographical indications “DARJEELING”, the name and logo in the name of the plaintiff in any manner whatsoever and/or passing off or attempting to pass off its business or services so as to discredit the fame of DARJEELING tea as a geographical indication and/or to mislead persons as to the nature of the beverages sold at the said premises of the defendant so as to allude a nexus with the registered geographical indications for the name DARJEELING or logo and to confuse persons in any manner. Being dissatisfied, the unsuccessful plaintiff has come up with the present appeal.

The case made out by the plaintiff in the plaint may be summed up thus: 1) The plaintiff is an autonomous, non-profit making statutory body created under the Tea Act, 1953 and a part of the Ministry of Commerce and Industry, Government of India and was established by the Government of India in the year, 1953 for the purpose of controlling the Indian Tea Industry. The Constitution of the plaintiff is varied and its members 3

include members of the Indian Parliament, owners of tea estates, growers of tea, the Government of the principal tea growing State of India, employees of tea estates and gardens, exporters and internal traders of tea, tea manufacturers and tea consumers.

2) Objects of the plaintiffs are, inter alia, to regulate the production, cultivation, marketing, sale and export of tea, encourage research, and other numerous statutory duties and functions under the Tea Act. 3) In order to preserve the integrity of tea sold under the name DARJEELING, the plaintiff has developed a distinctive DARJEELING logo which consists of the image of a woman holding two tea leaves and a bud in a roundel with the name DARJEELING prominently displayed along the top of the logo as indicated in the plaint.

4) On October 9, 1986 the plaintiff duly applied to be registered as the proprietor of the DARJEELING logo, while on December 10, 1998 the plaintiff duly applied to be registered as the proprietor of the name DARJEELING both as certification trade marks under Chapter IX of the Trade and Merchandise Marks Act, 1958 and the same were duly registered under the said Act in class 30 in the name of the plaintiff as the owner thereof. With the enactment of the new Trade Marks Act, 1999 (“Act”) these registrations continued under the new Act. 4

5) By virtue of these registrations, the plaintiff has the sole authority to certify that any tea marked by the said name DARJEELING or logo is guaranteed to be 100% DARJEELING tea originating from the 87 tea gardens in the Darjeeling District of West Bengal and possesses certain organoleptic qualities and characteristics. The certification trademark registrations of the DARJEELING name and logo have been duly renewed from time to time.

6) The Geographical Indications of Goods (Registration and Protection) Act, 1999 (“G.I. Act”) was promulgated in order, inter alia, to comply with India’s international obligations under the TRIPS Agreement to provide legal means for the protection of geographical indications and with the further object that under Article 24.9 of the TRIPS Agreement, the geographical indications from India may not be refused protection in other member countries of the WTO on the ground of lack of protection at home. 7) The name DARJEELING and the logo were the very first geographical indications to be registered under the G.I. Act with numbers 1 and 2 respectively in Class 30 in respect of tea.

8) The defendant is a company incorporated under the Companies Act, 1956 having its registered office at 37, Jawaharlal Nehru Road, Kolkata 700071 and the defendant carries on business and describes itself as an industrial conglomerate with a presence in various commercial enterprises including the hospitality industry and owns and operates several hotels and resorts. 5

9) One of the hotels owned and operated by the defendant is a hotel named ITC Sonar Bangla (hereinafter referred to as the ‘hotel’). In April, 2005 the plaintiff became aware of the defendant’s impugned trademark application for DARJEELING LOUNGE in Class 41 when the same was advertised in the Trademarks Journal.

10) Immediately upon coming to know of the purported attempted registration of the mark DARJEELING by the defendant, the plaintiff made an enquiry into the matter and came to know that a portion of the hotel at the ground floor with the name DARJEELING LOUNGE had been made available for use by all customers/patrons having access to the hotel, in the said lounge, which is for practical purpose like a restaurant on its premises, the said hotel was serving food, beverages and providing other varieties of consumables to its consumers.

11) The plaintiff objected to the said registration and ultimately came to know that by operation of Section 21(2) of the Act, the said application for registration DARJEELING LOUNGE was abandoned.

12) The plaintiff, however, came to know from subsequent enquiry that though the defendant was not pursuing its application for registration, it was wrongfully and fraudulently pursuing and had not discontinued the use of the said proprietary name of the plaintiff by using name DARJEELING LOUNGE.

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13) The edible commodities and beverages sold and served in the said lounge by the defendant indisputably have no connection whatsoever with Darjeeling region or the geographical indication DARJEELING and the intention of the defendant to convey a nexus therewith is false and fraudulent. By the use of the impugned name DARJEELING for the purposes of its lounge and for all purposes connecting therewith the defendant has willfully and deliberately falsified a geographical indication registered and owned by the plaintiff, and has also falsely applied the same to goods sold in the said lounge which have nothing whatsoever to do with the Darjeeling District or Darjeeling tea.

14) The Lounge which the defendant is using as the impugned mark DARJEELING LOUNGE catered to a wide range of beverages and thus such use in connection with beverages other than Darjeeling teas is an act of unfair competition inasmuch as it discredits the famous Darjeeling tea and misleads the defendant’s patrons as to the nature of the beverages served there.

Hence the suit.

In connection with the aforesaid suit, the plaintiff prayed for an interlocutory injunction in terms of the main prayer made in the suit so that during the pendency of the suit, the defendant was restrained from using the 7

lounge of the said hotel by describing the same as ‘DARJEELING LOUNGE’ in violation of the registered mark of the plaintiff or by passing off. The aforesaid application was opposed by the defendant thereby contending, in substance, that by virtue of the Registration of the plaintiff under Act or G.I. Act, the plaintiff had not obtained any right to restrain the defendant from rendering its service to its customers in the Lounge named DARJEELING LOUNGE and adoption of such a name by the defendant had not violated any of the rights created in favour of the plaintiff by virtue of its Registration either under the Act or under the G.I. Act. The defendant, thus, prayed for dismissal of the said application for interlocutory relief.

As indicated earlier, the learned Single Judge, by the order impugned in this appeal, has rejected the prayer of the plaintiff with a detailed finding that the plaintiff failed to prove a strong prima facie case to have an order of injunction. The learned Single Judge has also taken into account the question of balance of convenience and inconvenience and has further held that delay is a factor in the present case which should weigh with the Court in rejecting the application for interlocutory relief. The learned Single Judge, thus, dismissed the application. Being dissatisfied, the plaintiff has come up with the present appeal. Mr. Kapoor, the learned Senior Advocate appearing on behalf of the appellant, has vehemently attacked the findings recorded by the learned Single 8

Judge against his client about the prima facie case. Mr. Kapoor contends that the learned Single Judge failed to appreciate the scope of right conferred upon his client by virtue of registration either under the Act or under the G.I. Act. Mr. Kapoor further contends that the learned Single Judge also failed to appreciate the scope of the doctrine of passing off which is equally applicable in the facts of the present case. Mr. Kapoor further contends that his client having alleged both the infringement of Registered trademark and passing off, the learned Single Judge should have restrained the defendant from using the word “DARJEELING” as any part of the name of the lounge adopted by it. Mr. Kapoor, therefore, prays for setting aside of the order of the learned Single Judge and granting the injunction during the pendency of the proceeding. In support of his contention, Mr. Kappor relies upon the following decisions:

1. Strassenburg Pharmaceuticals Limited Vs. Himalyan Drug Co., reported in 24 PTC 441;

2. Century Plyboard (India) Limited Vs. Allied Products, reported in 30 PTC 609;

3. Corn Products Refining Company vs. Shangrela Food Products, reported in AIR 1960 SC 142.

Mr. Mitra, the learned Advocate-General appearing on behalf of the defendant, has, however, opposed the aforesaid contentions of Mr. Kapoor and has contended that by virtue of the certification registration of the plaintiff under 9

the Act or the registration under the G.I. Act in respect of DARGEELING in connection with Tea, no right has accrued in its favour in restraining his client from naming one of its lounges in the hotel as DARJEELING LOUNGE. Mr. Mitra contends that the registration given in favour of the plaintiff was in respect of Certification Trade Marks and thus, there was no scope of alleging infringements under Sections 28-29 of the Act and consequently, no right accrued in favour of the plaintiff also in complaining the alleged violation of passing off as the plaintiff is neither trading with any goods nor is carrying on any business in the name of Darjeeling. Mr. Mitra contends that the learned Single Judge on consideration of the entire materials on record rightly found that the right created under the G. I. Act related to the goods only and not in respect of services and that the plaintiff failed to prove a prima facie case to go for trial and as such, this Court should not interfere with the discretion exercised by the learned Single Judge in favour of his client. Mr. Mitra contends that in the matter of grant of temporary injunction, delay is a vital factor which should weigh with the Court in considering an application for injunction and in the case before us, although the plaintiff was well aware of the existence of the DARJEELING LOUNGE in the hotel of the defendant, it never thought of filing a suit in course of the next six years from the date of knowledge. Mr. Mitra further contends that the balance of convenience and inconvenience in this case is in favour of refusing the prayer of injunction and as such, we should dismiss the appeal filed by the plaintiff. 10

Therefore, the only question that arises for determination in this appeal is whether the learned Single Judge in the facts of the present case was justified in refusing the prayer of interim relief in favour of the plaintiff during the pendency of the suit.

Before deciding the said question, we should bear in mind the scope of investigation at the instance of an appellate Court dealing with an appeal against a discretionary order like temporary injunction. It is now settled law that in such an appeal, the appellate Court generally does not interfere with the discretion exercised by the Trial Court unless it appears that while exercising such discretion, the learned Trial Judge has wrongly applied the principles for grant of such discretion or unless it is established that such discretion has been unreasonably or capriciously exercised. In dealing with such an appeal, the appellate Court would not be justified in interfering with the discretion under the appeal solely on the ground that if it considered the matter at the trial stage, it might have come to a contrary conclusion. (See Uttar Pradesh Co-operative Federation Ltd. Vs. Sunder Bros. Delhi, reported in AIR 1967 SC 249). In a subsequent case of Manjunath Anandappa Urf Shivappa Hansi Vs. Tammanasa and others, reported in AIR 2003 SC 1391, the Apex Court reiterated the aforesaid principles which are required to be followed while hearing an appeal against a discretionary order by observing that “an appellate power interferes not when the order appealed is not right but only when it is clearly wrong. The difference is real, though fine.”

11

Bearing in mind the aforesaid principle, we now propose to consider whether in the facts of the present case, the learned Single Judge was justified in refusing the prayer of the plaintiff.

After hearing the learned Counsel for the parties and after going through the materials on record, we find that the appellant has registered its name for the word mark ‘DARJEELING (DEVICE OF WOMEN)’ under the goods and description “tea” and such registration has been made under Chapter IX relating to Certification Trade Marks under the Act. There is also no dispute that the plaintiff is not a trader dealing with tea but according to its own statements made in the plaint, it has the right of certification in India and other jurisdiction governing the use of the geographical indication “DARJEELING”, by its LOGO which guarantees that the tea sold under the same is produced in the defined region and district of Darjeeling and meets the criteria laid down by the plaintiff. Therefore, the first question that arises for determination is whether by virtue of such registration, the plaintiff can restrain the defendant who is carrying on a business of hospitality from naming one of its lounges in the hotel as “DARJEELING LOUNGE” where among the beverages and foods served to its customers, tea is also one of the items which is not necessarily restricted to the one grown only in the district of Darjeeling.

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The grievance of the plaintiff is that because of the name of the lounge containing DARJEELING, its Trademark, the people at large will be under an impression that the tea that is served in the said lounge is grown in the region of Darjeeling although according to the admission of the defendant in the written objection to the application for injunction, tea of other regions is also served in the said lounge.

This, according to Mr. Kapoor, amounts to violation of the registered trademark and also amounts to passing off.

In order to appreciate the aforesaid question, it will be profitable to refer to the provisions conferred in Section 69 of the Act which specifically says that the provisions contained in Clauses (a) and (c) of sub-section (1) of Section 9, Sections 18, 20 and 21 except as expressly applied by Chapter IX and Sections 28 to 30, 41, 42, 47, 48, 49, 50, 52, 54 and sub-section (2) of Section 56 and Chapter IX except Section 107 shall not apply to Certification Trade Mark. The various decisions cited by Mr. Kapoor relate to the violation of the trade marks granted under Section 18 of the Act and infringement of those types of trade marks is protected by Sections 28 and 29 of the Act. We have already pointed out that protection conferred under Section 29 of the Act is not available to the plaintiff being holder of a Certification Trade Mark. 13

As pointed out in Chapter IX of the Act by virtue of registered certifications, the holder thereof is entitled to protect its right conferred under Section 78 of the Act as provided in Section 75 of the said Act. In order to consider the nature of rights conferred under Section 78 and the nature of infringement mentioned in Section 75 of the Act, we propose to consider Sections 75 and 78 of the Act which are quoted below:- “75. Infringement of certification trade marks. – The right conferred section 78 is infringed by any person who, not being the registered proprietor of the certification trade mark or a person authorized by him in that behalf under the regulations filed under section 74, using it in accordance therewith, uses in the course of trade, a mark, which is identical with, or deceptively similar to the certification trade mark in relation to any goods or services in respect of which it is registered, and in such manner as to render the use of the mark likely to be taken as being a use as a trade mark. “78. Rights conferred by registration of certification trade marks. – (1) Subject to the provisions of sections 34, 35 and 76, the registration of a person as a proprietor of certification trade mark in respect of any goods or services shall, if valid, give to that person the exclusive right to the use of the mark in relation to those goods or services. (2) The exclusive right to the use of a certification trade mark given under sub-section (1) shall be subject to any conditions and limitations to which the registration is subject.”

(Emphasis supplied by us).

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Along with the aforesaid provisions, we also quote below Sections 28 and 29 for the purpose of comparing of nature of rights accrued and the infringement mentioned therein with those provided in Sections 75 and 78 of the Act. “28. Rights conferred by registration.–(1) Subject to the other provisions of this Act, the registration of a trade mark shall, if valid, give to the registered proprietor of the trade mark the exclusive right to the use of the trade mark in relation to the goods or services in respect of which the trade mark is registered and to obtain relief in respect of infringement of the trade mark in the manner provided by this Act.

(2) The exclusive right to the use of a trade mark given under sub-section (1) shall be subject to any conditions and limitations to which the registration is subject.

(3) Where two or more persons are registered proprietors of trade marks, which are identical with or nearly resemble each other, the exclusive right to the use of any of those trade marks shall not (except so far as their respective rights are subject to any conditions or limitations entered on the register) be deemed to have been acquired by any one of those persons as against any other of those persons merely by registration of the trade marks but each of those persons has otherwise the same rights as against other persons (not being registered users using by way of permitted use) as he would have if he were the sole registered proprietor. “29. Infringement of registered trade marks. – (1) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which is identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered and in such manner as to render the use of the mark likely to be taken as being used as a trade mark. 15

(2) A registered trade mark is infringed by a person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which because of –

(a) its identity with the registered trade mark and the similarity of the goods or services covered by such registered trade mark; or (b) its similarity to the registered trade mark and the identity or similarity of the goods or services covered by such registered trade mark; or

(c) its identity with the registered trade mark and the identity of the goods or services covered by such registered trade mark, is likely to cause confusion on the part of the public, or which is likely to have an association with the registered trade mark. (3) In any case falling under clause (c) of sub-section (2), the court shall presume that it is likely to cause confusion on the part of the public. (4) A registered trade mark is infringed by person who, not being a registered proprietor or a person using by way of permitted use, uses in the course of trade, a mark which –

(a) is identical with or similar to the registered trade mark; and (b) is used in relation to goods or services which are not similar to those for which the trade mark is registered; and

(c) the registered trade mark has a reputation in India and the use of the mark without due cause takes unfair advantage of or is detrimental to, the distinctive character or repute of the registered trade mark.

(5) A registered trade mark is infringed by a person if he uses such registered trade mark, as his trade name or part of his trade name, or name of his business concern or part of the name, of his business concern dealing in goods or services in respect of which the trade mark is registered.

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(6) For the purpose of this section, a person uses a registered mark, if, in particular, he –

(a) affixes it to goods or the packaging thereof;

(b) offers or exposes goods for sale, puts them on the market, or stocks them for those purposes under the registered trade mark, or offers or supplies services under the registered trade mark; (c) imports or exports goods under the mark; or

(d) uses the registered trade mark on business papers or in advertising. (7) A registered trade mark is infringed by a person who applies such registered trade mark to a material intended to be used for labelling or packaging goods, as a business paper, or for advertising goods or services, provided such person, when he applied the mark, knew or had reason to believe that the application of the mark was not duly authorized by the proprietor or a licensee.

(8) A registered trade mark is infringed by any advertising of that trade mark if such advertising –

(a) takes unfair advantage of and is contrary to honest practices in industrial or commercial matters; or

(b) is detrimental to is distinctive character; or (c) is against the reputation of the trademark.

(9) Where the distinctive elements of a registered trade mark consist of or include words, the trade mark may be infringed by the spoken use of those words as well as by their visual representation and reference in this section to the use of a mark shall be construed accordingly.”

(Emphasis supplied by us).

If we consider the rights conferred on obtaining a trademark as provided in Section 28 and the nature of infringements provided in Section 29 and 17

compare those with Sections 78 and 75 respectively, it will appear that in sub- section (1) of Section 28, there exists a positive right to “obtain relief in respect of infringement of the trade marks in the manner provided by this Act” which is conspicuously absent in Section 78 of the Act. Similarly, while in Section 75, the right conferred under Section 78 is infringed by a person who, not being the registered proprietor of the certification trademark or a person authorized by him in that behalf under the regulations filed under Section 74, using it in accordance therewith, uses in the course of trade, a mark, which is identical with, or deceptively similar to the certification trade mark in relation to any goods or services in respect of which it is registered, and in such manner as to render the use of the mark likely to be taken as being a use as a trademark, in Section 29, the list of infringements of the rights conferred under Section 28 is far more extensive as detailed in nine different sub-sections quoted above including the act of use without permission by a person if he uses such registered trade mark, as his trade name or part of his trade name, or name of his business concern or part of the name, of his business concern dealing in goods or services in respect of which the trade mark is registered as provided in sub-section (5) thereof, which is the allegation against the defendant by the plaintiff in substance. The above phrase indicated in Section 29 is noticeably absent in Section 75 of the Act.

Therefore, the decisions cited by Mr. Kapoor mentioned above based on infringement of the right conferred under Section 18 of the Act cannot have any 18

application while alleging infringement of the rights conferred under Section 78 of the Act.

Apart from the decisions indicated by us above, Mr. Kapoor also placed before us some foreign decisions showing that in foreign courts his client has succeeded to prevent some foreign traders who are using the word “Darjeeling” in their trade name from so doing. In those decisions, those foreign courts had no occasion to deal with the provisions contained in the Trademarks Act or the G.I. Act of this country. Since we are not finally deciding the matter but are dealing with an appeal preferred against an order of interlocutory injunction where the main matter is yet to be decided on merit, we are concerned with the existence of a prima facie case of the plaintiff based on the abovementioned two Indian Statutes and as such, we do not intend to deal with those foreign decisions based on the law prevailing in those countries at this stage. As regards the allegation of passing off, as the phrase “passing off

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