RAMDEV FOOD PRODUCTS PVT. LTD. v. ARVINDBHAI RAMBHAI PATEL AND ORS

Citation: [2006] SUPP. 5 S.C.R. 521

Court: Supreme Court of India

Bench: S.B. SINHA, P.P. NAOLEKAR

Case summary

RAMDEV FOOD PRODUCTS PVT. LTD. v. ARVINDBHAI RAMBHAI PATEL AND ORS.pdf

Judgment text

RAMDEV FOOD PRODUCTS PVT. LTD. v. ARVINDBHAI RAMBHAI PATEL AND ORS. AUGUST 29, 2006 [S. B. SINHA AND P. P. NAOLEKAR, JJ.

] Trade and Merchandise Marks Act, 1958-Sections 20), 15, 17, 28, 2-9, 30(/)(b) 33, 48 and 49-Trade mark-Infringement of-Business under a particular trademark run though a Company-Another firm running business of retail sale of the products of company-User agreement between the Company and the firm to use the registered trade mark for seven years- Memorandum of Understanding entered into by the parties-Firm started manufacturing its own products under the said trade mark-The use oftrade mark by thefinn questioned as infringement oftrade mark by the Company- Suit-Trial Court restrained the firm from using the trade mark by temporary injunction except in seven outlets mentioned in Memorandum of Understanding-High Court upheld finding of trial court except the finding that printing and publication of the principal display panel was creating infringement of trademark-On appeal, held: Use of the trade mark of the Company by the firm for the goods manufactured by it.

is infringement of trademark-Firm had only a limited right under the MOU-Grant of trademark is an indicator ofexclusivity in trade mark and this right cannot be transferred-Only a limited right ofuser can be granted via licence-User agreement having come to an end on expiry of seven years and such right not having conveyed in the MOU, Firm could not use the trade mark under either of them-By reason of interpretation of MOU trade mark cannot be infringed especially when the right of user has been relinquished-When defences in regard to right of user are set up, the onus is on the party who takes such defence -Standards of Weights and Measures Act-Prevention of Food Adulteration Act. Deeds and Documents-Interpretation of-Held: A document must be construed having regard to the terms and conditions as well as nature thereof-It should be read as a whole and to be construed keeping in view of the existing law. ..

Interpretation ofStatutes-Interpretation ofnon-obstante clause-Held: The interpretative process ofa non-obstante clause must be kept confined to the legislative policy. Interlocutory hyunction-Grant of-In cases of infringement of trade mark-Held: In such cases injunction would ordinarily follow where it is established that the defendant had infringed the trade mark and has not been able to discharge the burden as regards its defence-When a prima facie case is made out and balance of convenience is in favour ofproprietor of trade mark only loss ofgoodwill and reputation to fulfil the condition ofirreparable injury is necessary-In such case delay by itself may not be a ground for refusing to issue injunction. Evidence-Onus to prove-In case of infringement of trade mark- Held: In such cases, the onus is on the defendant to show that he is entitled thereto either by reason of acquiescence on the part of the owner of the registered trade mark or he himself has acquired a right thereto.

Doctrines/Principles: Doctrine ofPassing Offand Doctrine ofWaiver- Meaning of . Principle of Estoppel and Principle of Acquiscence-Applicability of Jurisdiction-Jurisdiction of appellate Court-To interfere with order ofinterlocut01y injunction-Held: Usually appellate court should not interfere with such order as the same is in exercise ofdiscretionary jurisdiction oftrial court-However, it can substitute its discretion iffinds that the discretion has been exercised arbitrarily, capriciously, perversely or where the court has ignored settled principles oflaw regulating grant or refusal ofinterlocutory injunctions. Words and Phrases: 'Trade mark', 'Passing off and 'Irreparable ilyury '-Meaning of A business of manufacturing and selling of spices under the trade name of'Ramdev' was being run by three brothers through the appellant-company. partnership firm of the respondents being 'Ramdev Masala' was being run through seven outlets for retail sale of the products of the Company.

An user agreement was entered into by and between the appellant-company and the said firm permitting the firm to use the registered trade mark for seven yeal'li. Still another partnership under the name 'Ramdev Exports' was to export the RAMDEV FOODPRODUCTS PVT. LTD. v. ARVINDBHAI RAMBHAI PATEL 523 spices manufactured by the appellant-company. On disputes between the partners, a Memorandum of Understanding (MOU) was executed. Appellant-company filed a suit against the respondents on the premise that the respondents had been infringing its rights. It also filed an application for interim injunction seeking to restrain the respondents from using the trademark 'Ramdev'.

Trial Judge restrained the respondents by temporary injunction from using registered trademark, logo 'Ramdev' or any other trademark, which is identical and deceptively similar to the trademark ofthe appellant in respect of label and packing material of their goods except in seven outlets mentioned in MOU till final disposal of the suit. They were held to be at liberty to run business of spices under the trade name 'Ramdev Masala' without using the registered trademark 'Ramdev Masala' except in seven outlets. In appeals by both the parties, High Court held that trial court was wrong in holding that printing and publication of the principal display panel was creating infringement of trademark as it was deceptively similar and that respondents could not be prevented from using the words 'Ramdev' and 'Masala' on their label and packing. Rest of the findings of the trial court were upheld.

In appeal to this Court, appellant contended that it was impermissible for the respondents to use the registered trademark of the appellant either in the seven outlets or for the goods manufactured by them because by reason ofMOU, they were not permitted to start manufacturing spices under the name and style of'Ramdev Masala' as they were entitled to carry on retail business from the seven outlets for the purpose of selling only the end products manufactured by appellants upon printing the words 'not for resale'.

Respondents contended that remedies under Trade and Merchandise Marks Act, 1958 were not available against ~he respondents, and the appellants could exercise their right only for the purpose of implementing the MOU which must be read with deed of retirement; that in the present case principles for grant of injunction in case of passing off are to be applied and not that of trade mark; that the claim of the appellant was barred by Sections 15(1) and 15(2) of 1958 Act; that the stipulations made in MOU do not oblige the respondent to buy any product from the appellant-company; MOU must be interpreted in the light of deed of retirement which categorically contained a stipulation that the continuing partner "have also decided to continue the said business in the same firm names" and thus if appellant's claim is accepted the right of the respondent to continue the business under the name and style of or in the firm name would become inconsistent with the deed of retirement.

Allowing the appeals, the Court HELD: 1. 1. In this case the courts below proceeded on a prima facie misconstruction ofdocuments. They adopted and appiied wrong standards. The seven outlets were meant to be used for retail sale of the products of the appellant alone. They, however, failed to notice two significant and important provisions in the said MOU, viz. , (i) the defendants could not carry on business in wholesale of the said products; (ii) it was meant to be sold directly to the consumers and on the productions "not for resale" was required to be printed on each packet. What, therefore, could be done by the respondents was to sell the products of the appellant through the said outlets. The respondents, however, were not restrained from manufacturing spices in their own factory. They started the same under the brand name of'Swad'.

They could even use the same retail outlets for the purpose of promoting their own products but prima facie they could not use the mark registered in the name of the appellant-Company. [557-A-El 1. 2. Once the appellant had acquired goodwill and reputation thereto, in the event of any infringement to the said right, the remedies provided for in Merchandise and Trades Mark Act, 1958 would be available to it. The terms of the MOU are clear and unambiguous. It was required to be construed, even if it was obscure to some extent by making attempt to uphold the one, which would be in consonance with law and not offend the same. (557-E-F( 1. 3. The respondents in the instant case have adopted a part of the appellant's registered trade mark as a part of its corporate name. In that view of the matter, they had a limited right under the MOU and by reason thereof they could not have been permitted to start manufacturing of spices under the name and style of'Ramdev Masala'.

Even under the common law, licence has to be interpreted to subsume the law and prevent the mischief which is deceptive having regard to the fact that trafficking in trade mark is not permitted. [558-B-CI 1. 4. The grant of a trade mark is an indicator of exclusivity in trade mark and this right cannot be transferred. Only a limited right of user can be granted via licence. Making use of another's trade mark is not only a violation of business ethics but has also been linked to dishonestly making RAMDEV FOODPRODUCTSPVT. LTD. v. ARV! NDBHA! RAMBHA! PATEL 525 use of the goodwill and reputation built up and associated with the mark. (551-D-E; 552-8-Cl Laxmikant V. Patel v. Chetanbhai Shah and Anr. , 120021 3 SCC 65, relied on. Gujarat Bottling Co. Ltd. and Ors v. Coca Cola Co. and Ors. , (1995] 5 sec 545, referred to. The Modern law ofTrade Marks by Christopher Morcom, Butterworths, (1999), referred to. 1. 5. A trade mark is the property of the manufacturer.

The purpose of a trade mark is to establish a connection between the goods and the source thereof which would suggest the quality of goods. If the trade mark is registered, indisputably the user thereof by a person who is not otherwise authorised to do so would constitute infringement. Ordinarily under the law there can only be one mark, one source or one proprietor. The first respondent herein is a rival trader of the appellant-Company. It did not in law have any right to use the said trade mark, save and except by reason of the terms contained in the MOU or continuous user. When defences in regard to right of user are set up, the onus would be on the person who has taken the said plea. Equally a person cannot use a mark which would be deceptively similar to that ofthe registered trade mark. Registration of trade marks is envisaged to remove any confusion in the minds of the consumers.

If, thus, goods are sold which are produced from two sources, the same may lead to confusion in the mind of the consumers. In a given situation, it may also amount to fraud on the public. A proprietor of a registered trade mark indisputably has a statutory right thereto. In the event ofsuch use by any person other than the person in whose name the trade mark is registered, he will have a statutory remedy in terms of Section 21 of the 1958 Act. Ordinarily, therefore, two people are not entitled to the same trade mark, unless there exists an express licence in that behalf. (552-G-H; 553-A-D] Suma/ Prasad Jain v. Sheojanam Prasad (Dead) and Ors. and State of Bihar, 1197311 sec 56; Canon Kabushiki Kaisha v. Metro-Goldwyn-Mayer Inc. , (1999) RPC 117; Baker Hughes limitedv. Hiroo Khushalani, (1998) PTC (18) 580; Baker Hughes ltd. and Anr. v. Hiroo Khushlani and Anr. , (2004] 12 SCC 628 and Mi/met Oftho Industries and Ors. v. Allergan Inc. , (2004] 12 sec 624, referred to. 1. 6.

Traditionally, a trade mark has always been considered a vital and inseparable part of the goodwill of the business. In fact, the sale of a trade mark without the sale of the goodwill to the same buyer is considered null and void. However, the trade mark can be assigned with or without the goodwill of business though subject to certain conditions. 1556-C-DI Trade Marks, Passing Offand Franchising by V. A. Mohta, pp. 12 and 313, referred to. 1. 7. It is true that the respondents have been permitted in terms of the MOU to continue their business in the name of the partnership firm and to use the label mark, logo, etc. but the said MOU must be construed in the light of the law operating in the field. For the said purpose, primafacie, the deeds of retirement are not required to be looked into. When a right to use a trade mark is given, such a right can be exercised only in the manner laid down therein.

If in absence of any express licence or agreement to use its label the respondents use the self-same trade mark, the same would not only lead to confusion but may also cause deception. Even a common law licence, it is well-settled, cannot result in the dilution of the trade mark. 1558-C-E) 1. 8. The question which also escaped the attention of the High Court was that having regard to the non-obstante clause contained in the 1958 Act ordinarily for any purpose, the trade mark cannot be infringed. If an infringement of trade mark is established, the onus would be on the defendants to show that he is entitled thereto either by reason of acquiescence on the part of the owner of the registered trade mark or he himself has acquired a right thereto.

The Provisions of the Standards of Weights and Measures Act or the Prevention of Food Adulteration Act do not confer such right Yet again, significantly, a pre-emptive right had been conferred in favour of the first respondent which is itself suggestive of the fact that the first respondent admitted and acknowledged the right of the appellant to the said trade mark. (559-B-D) 1. 9. The non-obstante nature of a provision although may be of wide amplitude, the interpretative process thereof must be kept confined to the legislative policy. A non-obstante clause must be given effect to, to the extent the Parliament intended and not beyond the same. 1559-A-B) ! CIC/ Bank Ltd. v. Sidco leathers ltd. and Ors. , 120061 5 SCALE 27, referred to. 1. 10. Respondents did not have any right over the trade mark. They in fact, assigned the same in favour of the appellant-Company. They having RAMDEV FOOD PRODUCTS PVT. LTD. v.

ARVINDBHAI RAMBHAI PATEL 527 relinquished their right, now cannot fall back on Section 33 of the 1958 Act It may be true that there exists a distinction between a suit in a trade mark action against the whole world and a suit for implementation of division of assets amongst the members of the family. But, after the MOU was entered into the parties having separated, ceased to be members of a joint family. What was, thus, essential for determining the right of the parties would be the terms of the MOU. (572-F-H] 1. 11. The conduct of the respondents also cannot be appreciated. They were aware of the rights under the MOU. They had all along been enforcing the same. Legal defence were available to them under the 1958 Act. (574-8] P. M Diesels Ltd. v. Patel Field Marshal Agencies and Ors. , (2001) PTC 20 Del, referred to. 1. 12. By reason of interpretatio'!

of MOU, trade mark cannot be infringed and further when the right of user has been relinquished, the same could not have been claimed by the respondents. (560-E-F) 1. 13. MOU, for the purpose of these appeals, may be treated to be a family settlement. Intention of the parties to an instrument must be gathered from the terms thereof examined in the light of the surrounding circumstances. The document is to be read as a whole. The deed has also to be construed keeping in view the existing law. A docm,nent must be construed having regard to the terms and conditions as well as the nature thereof. [547-C-D; 548-8-CJ Sohan Lal Naraindas v. Laxmidas Raghunath Gadit, [1971] l SCC 276; Delta International Ltd. v. Shyam Sundar Ganeriwalla, (1999] 4 SCC 545 and Union ofIndia v. Mis. Mil/enium Mumbai Broadcast Pvt. Ltd. , (2006) 5 SCALE 44, referred to. 1. 14.

It may be proceeded on the basis that the MOU answers the principles of family settlement having regard to the fact that the same was actuated by a desire to resolve the disputes and the courts would not easily disturb them. [548-D-E] S. Shanmugam Pillai and Ors. v. K. Shanmugam Pillai and Ors. , [1973] 2 SCC 312; Kale and Ors. v. Deputy Director ofConsolidation and Ors. , [1976] 3 SCC II9 and Hari Shankar Singhania and Ors. v. Gaur Hari Singhania and Ors. , JT (2006) 4 SC 251, relied on. 1. 15. Although at one point of time the appellant-Company had taken a stand that it being not a party to the MOU, it is not bound by the terms thereof but the same would not mean that in an action for infringement of trade mark, when the MOU was put as a shield to its claim, it could not have taken recourse to proper interpretation thereof for the purpose of determination of the rights of the parties to use the trade mark in question.

It is not a case where the courts refused to lean in favour of family arrangement or base its decision on technical or trivial ground. [548-E-Gl · 2. If the first respondent has expressly waived his right on the trade mark registered in the name of the appellant-Company, he cannot claim the said right indirectly. What cannot be done directly cannot be done indirectly. Waiver may sometimes resemble a form of election, and sometimes be based on ordinary principles of estoppel. [560-G-H; 561-El lndu Shekhar Singh and Ors. v. State ofU. P. and Ors. , (2006) 5 SCALE 107, referred to. 16 Ha/sbury's Laws (4th edn. ) para 1471; 45 Ha/sbury's Laws (4th edn. ) para 1269, referred to. 3. 1. Section 15 of the 1958 Act, is not attracted in the instant case. By reason of the said provision, registration of trade mark in regard to the exclusive use is permissible both in respect of the whole trade mark as also the part thereof separately.

Wllere such separate trade mark in regard to a part of it is applied for, the applicant must satisfy the conditions applying to and have all the incidents of an independent trade mark. (562-A-Bl The Registrar ofTrade Marks v. Ashok Chandra Rankhit Ltd. , (19551 2 SCR 252, distinguished. Pinto v. Badman, 8 RPC 181, referred to. 3. 2. It cannot be said that only a label has been registered and not the name 'Ramdev'. Definition of'mark' as contained in Section 2(j) of the 1958 Act also includes name, signature, etc. [563-B-CI 3. 3. Section 29of1958 Act provides for the remedies for infringement of trade mark. What is needed by way of cause of action for filing a suit of infringement of trade mark is use of a deceptively similar mark which may not be identical. What would be deceptively similar, as defined in Section 2(d) RAMOEV FOODPRODUCTS PVT. LTD. v.

ARVlNDBHAI RAMBHAI PATEL 529 of the 1958 Act, would be a mark ifit nearly resembles that other mark as to be likely to deceive or cause confusion. It is, therefore, not a case where the respondents could raise valid defence in terms of Section 29 of the 1958 Act. (563-C-F( 3. 4. The right conferred in terms ofSection 28 of the 1958 Act although is required to be read with Sections 15 and 17 thereof but it is difficult to accept that each part of the logo was required to be separately registered. Section 28 of the 1958 Act confers an exclusive right of using trade mark to a person who has got the trade mark registered in his name. Such right is, thus, absolute. (563-D-F) 3. 5. It cannot be said that the MOU for the purpose ofSection 28 of the 1958 Act should be read with the partnership deed. The user agreement having come to an end on the expiry of seven years from the date of execution, the respondents could no more claim any right thereunder.

The right to user has not been conveyed by reason ofthe said MOU. The cut offdate for determining the respective rights ofthe parties would, thus, be the date when MOU came into force i. e. on expiry of the user agreement. (563-F-H; 564-A) 3. 6. It is not a case where Sections 48 and 49 of the 1958 Act would be applicable so as to ena! Jle the respondents to raise a defence in terms ofSection 30(l)(b) thereof. [564-A-B) Amteshwar Anand v. Virender Mohan Singh and Ors. , (2006) 1 SCC 148, distinguished. Re Cadbury Brothers' Application, referred to. 4. 1. The doctrine of passing off is a common law remedy whereby a person is prevented from trying to wrongfully utilise the reputation and · goodwill of another by trying to deceive the public through 'passing ofr his goods. [565-B-C) 'Law of Trade Marks and Trade Names' by Karly Supplement pp. 42 and 43, referred to. 4. 2.

Although, the defendant may not be using the actual trade mark of the plaintiff, the get up of the defendant's goods may be so much like the plaintifrs that a clea~ case of passing off could be proved. It is also possible that the defendant may be using the plaintiffs mark, the get up of the defendant's goods may be so different from the get up of the plaintifrs goods and the prices also may be so different that there would be no probability of deception of the public. However, in an infringement action, an injunction would be issued if it is prov,ed that the defendant is improperly using the plaintiffs mark. In an action for infringement where the defendant's trade mark is identical with the plaintiffs mark, the Court will not enquire whether the infringement is such as is likely to deceive or cause confusion. The test, therefore, is as to likelihood of confusion or deception arising from similarity of marks is the same both in infringement and passing off actions.

(566-A-D) Parle Products (P) Ltd. v. JP. and Co. , Mysore, (1972) I SCC 618; Kaviraj Pandit Durga Dutt Sharma v. Navaratna Pharmaceutical La4oratories, AIR (1965) SC 980 and K. R. Chinna Krishna Chettiar v. Shri Ambal and Co. , Madras and Anr. , (1969) 2 SCC 131, relied on. Ruston and Hornsby Ltd. v. The Zamindara Engineering Co. , (1969) 2 SCC 727; Poddar Tyres Ltd. v. Bedrock Sales Corporation Ltd. andAnr. , AIR (1993) Bombay 237 and De Cordova and Ors. v. Vick Chemical Co. , (1951) 68 RPC 103, referred to. 5. 1. Relief by way of interlocutory injunction would be material in a suit for infringement of trade mark. Balance of convenience, however, would have a vital role to play. Thus, when a prima facie case is made o·ut and balance of convenience is in favour of the appellant, it may not be necessary to show more than loss ofgoodwill and rerutation to fulfil the condition of irreparable injury.

In fact, if the first two pre-requisites are fulfilled, in trade mark actions irreparable loss can be presumed to have taken place. The expression "irreparable injury" in that sense would have established injury which the plaintiff is likely to suffer. [574-D; 575-C-EJ ' Mahendra and Mahendra Paper Mills Ltd. v. Mahindra and Mahindra Ltd. , (2002) 2 SCC 147, referred to. Law of Trade Marks and Trade Names by Karley Thirteenth Edition, referred to. 5. 2. Registration of a trade mark and user thereofper se may lead to the conclusion that the plaintiff has a primafacie case, however, existence thereof would also depend upon the determination of the defences raised on behalf of the respondents. The appellant has raised a triable issue. The same by itself although may not be sufficient to establish a primafacie case but the Court is satisfied that the appellant has been able to establish existence of a RAMDEV FOODPRODUCTS PVT LTD. v.

ARVINDBHAI RAMBHAI PATEL 53 J legal right in itself and violation of the registered trade mark on the part of the respondents. The case of the plaintiff-appellant stands on a better footing than the defendants-respondents. An injunction can also be granted against the respondents to use the corporate name. Specific knowledge on the part of the plaintiff and prejudice suffered by the defendant is also a relevant factor. 1573-A-CI SM. Dyechem ltd. v. Cadbw:v (India) ltd. , 120001 5 SCC 573, relied on. Colgate Palmolive (India) ltd. v. Hindustan lever ltd. , 119991 7 SCC I; American Cyanamid v. Ethicon Ltd. , 119751 I All ER 853 and Mis. Transmission Corporation ofA. P. Ltd. v. Mis. lanco Kondapalli Power Pvt. Ltd. , JT (2005) I0 SC 542, referred to. Equitable Remedies by Spray, Fourth Edition, page 433, referred lo. 5. 3. Normally the appellate court would be _slow to interfere with the discretionary jurisdiction of the trial court.

The grant of an interlocutory injunction is in exercise ofdiscretionary power and hence, the appellate courts will usually not interfere with it. However, appellate courts will substitute their discretion if they find that discretion has been exercised arbitrarily, capriciously, perversely, or where the court has ignored settled principles of law regulating the grant or refusal of interlocutory injunctions. The appellate court would normally not be justified in interfering with the exercise of discretion under appeal solely on the ground that if it had considered the matter at the trial stage it would have. come to a contrary conclusion. (576-G-H; 577-A-C) Wander Ltd. v. Antox India P. Ltd. , (1990) Supp SCC 727; lakshmikant V. Patel v. Chetan bhai Shah, 12002) 3 SCC 65 and Seema Arshad Zaheer v. MC ofGreater Mumbai, (2006) 5 SCALE 263, referred to. 5. 4.

Quality control by a registered trade mark holder vis-a-vis the one produced by an unregistered one is one of the factors which is required to be taken into consideration for the purpose of passing an order of injunction. 1557-F-Gl 5. 5. Delay in some cases may defeat equity but the chronology of events in the present case does not suggest that the appellants consciously allowed the respondents to use the trade mark. 1570-C-D) 5. 6. Acquiescence is a facefofdelay. The principle ofacquiescence would apply where: (i) sitting by or allow another to invade the rights and spending money on it; (ii) it is a course of conduct inconsistent with the claim for exclusive rights for trade mark, trade name, etc. The defence of acquiescence, thus, would be satisfied when the plaintiff assents to or lay by in relation to the acts of another person and in view of that assent or laying by and consequent acts it would be unjust in all the circumstances to grant the specific relief.

[570-D-E; 571-A-B) Mis. Power Control Appliances and Ors. v. Sumeet Machines Pvt. ltd. , [1994) 2 sec 448, relied on. c:: "Treatise on the Law and Practice ofInjunction", by Kerr, Sixth Edition, pages 360-361, referred to. 5. 7. In an infrL :ement of trade mark, delay by itself may not be a ground for refusing to issue injunction. The time gap between the issuance of the notice and filing of an application for grant of injunction was not a voluntary act on the part ofthe appellant herein. It had to wait for the outcome of various proceedings pending before different courts. The respondents having themselves taking recourse to judicial proceedings cannot now be permitted to set up the defence ofacquiescence on the part ofthe appellant. Indisputably, in a case of infringement of trade mark, injunction would ordinarily follow where it is established that the defendant had infringed the trade mark and had not been able to discharge its burden as regard the defence taken by it.

(570-F-G; 571-E-H) Midas Hygiene Industries (P) Ltd. v. Sudhir Bhatia and Ors. , (2004) 3 sec 90, relied on. Pioneer Electronic Corporation and Anr. v. Registrar of Trade Marks, (1978) RPC 716, referred to. 6. The appellant shall, as and when demands are made, supply spices produced by it for retail sale thereof to seven outlets belonging to respondents on usual terms, and in respect of such articles on the labels/pouches, on the reverse thereof, the following shall be mentioned in the minimum permissible size in terms of the provisions of Weights and Measures Act and Prevention of Food Adulteration Act: "This product is manufactured and marketed by Mis. Ramdev Masala (Arvindbhai Group) (Or Mis. Ramdev Exports Arvindbhai Group) having no relationship whatsoever with Ramdev Food Products Pvt. Ltd. " [578-B-DJ ,. RAMDEVFOOD PRODUCTS PVT. LTD. v. ARVINDBHAI RAMBHAI PATEL [S. B. SINHA,J. J 533 CIVIL APPELLATE JURISDICTION :Civil Appeal Nos. 8815-16 of2003.

From the Judgment and Order dated 8. 5. 2003 of the High Court of Gujarat at Ahmedabad, in Appeal From Order Nos. 113 and 130/2003. WITH C. A. No. 8817 of2003. Ashok H. Desai, C. A. Sundaram, Mihir Joshi, Hazefa Ahmadi, Devang S. Nanavati, Lalit Chauhan, Saurin Mehta, Nokul Diwan, Anshuman Mohapatra, Shiva Santanam and P. H. Parekh (for Mis. P. H. Parekh & Co. ) for the Appellant. F. S. Nariman, Dr. Abhishek M. Singhvi, Mihir Thakore, Mahesh Agarwal, Unmesh Shukla, Janak Shah, Nitin Mehta, Manu Krishnan and E. C. Agrawala for the Respondents. The Judgment of the Court delivered by S. B. SINHA, J. Interpretation of the provisions of the Trade and Merchandise Marks Act, 1958 (for short "the 1958 Act") arises for consideration in these appeals arising out of a judgment and order dated 08. 05. 2003 passed by the High Court of Gujarat at Ahmedabad. FACTS The appellant is a company incorporated under the Companies Act, 1956. The other parties to these appeals were/are its Directors.

In the year 1965, one Rambhai Patel started a business of grinding and selling spices under the name and style of 'Ramdev'. He had three sons and two daughters, Arvindbhai, Hasmukhbhai and Pravinbhai were his sons. · partnership firm was constituted in the year 1975. It applied for registration ofthe trademark 'Ramdev', which was granted on 03. 01. 1986 being Trademark No. 447700. Another partnership deed was executed in supersession of the earlier partnership deed wherein new partners were inducted. On 06. 01. 1989, the appellant company was incorporated whereby and whereunder the pattern of shareholding amongst the three brothers was : Arvindbhai Group (40%); Hasmukhbhai Group (30%); and Pravinbhai Group (30%). The registered trademark was assigned by 'Ramdev Masala Stores' in favour ofthe appellant by a deed dated 20. 05. 1990. However, by the said deed the goodwill was not assigned.

The trademark together with the goodwill was assigned in favour of the appellant company by another deed of assignment dated 20. 05. 1992. A 'user' agreement was also entered into by the same parties permitting the firm 'M/s. Ramdev Masala Stores' to use the said trademark subject to the terms and conditions stipulated therein. Another partnership firm being 'Ramdev Masala' was started on 01. 04. 1991 for carrying on the trade of grinding and trading of masalas. A user agreement was also entered into by and between the appellant company and the said firm permitting the latter to use the registered trade mark for seven years i. e. from 01. 04. 1991 to 31. 03. 1998 in terms whereof it was stipulated : · "3.

AND WHEREAS the User is a firm registered under the Indian Partnership Act and wishes to use in the city of Ahmedabad except the area ofNaroda City of Ahmedabad and district Mehsana, Gujarat State (India) registered proprietors aforesaid registered Trade Mark (hereinafter referred to as "the said Trade Mark") in respect of the said goods. "User restricted to the cities of Ahmedabad and Mehsana; 4(C) That the User will continue to use the said mark only so long as he manufactures his goods in accordance with the terms and specifications devised by the Registered Proprietor. 4(E) That within the terms of this agreement and thereafter the User will not acquire any right to the said mark hy any means whatsoever except in accordance with law.

4(G) That the User covenants not to use the said Trade Mark in the advertisement, journal label and/ or other documents in such a manner that the said Trade Mark may in any way be diluted in respect of distinctiveness of validity if necessary and indication either usually,. phonetically may be given to the purchasing public to the extent that the User uses the said mark by way of permitted use only. " Indisputably, the firm 'Ramdev Masala Stores' was dissolved on 04. 11. 1991. Yet again a new partnership firm came into being under the name and style of 'Ramdev Exports'. The said partnership firm was constituted for the purpose of export of spices manufactured by the appellant company. It is not in dispute that the business of manufacturing and selling of spices under the trade name of 'Ramdev' was being run by the three brothers through the appellant company. Another partnership firm being 'Ramdev Masala' was being run through ... RAMDEV FOOD PRODUCTS PVT. LTD. r.

ARVINDBHAI RAMBHAI PATEL [S. B. SINHA,J. ] 535 seven outlets for retail sale of the products of the Company. A. It is also not in dispute that both the firms 'Ramdev Masala' and 'Ramdev Exports' had distinct and separate existence. Their areas of operation were also different. The respective roles assigned to each of the partnership firm had clearly been specified in their respective partnership deeds. Whereas Mis. Ramdev Masala was allowed to manufacture and trade in spices, the business of Mis. Ramdev Exports was limited to export of the spices manufactured by the appellant company. Yet again, the partnership deed of Ramdev Masala was amended on 01. 04. 1995; in terms whereof the business of the said firm was confined only to trading in spices manufactured by the appellant company. In other words, the respective businesses under the partnership deeds of the said firms are stated to be as under : a.

Type of business of Ramdev Masala under the first partnership deed was grinding and selling of spices. b. Type of business of Mis. Ramdev Masala under the second partnership deed was trading in spices. c. The business of Mis. Ramdev Exports was exporting the goods manufactured by the appellant company. DISPUTES Disputes and differences having arisen between the members of the family and in particular between the three brothers, the same was settled by their well-wishers, pursuant whereto and in furtherance whereof a Memorandum of Understanding (MOU) was executed by and between the parties, to which we would advert to a little later. LEGAL PROCEEDINGS . On the premise that the respondents had been infringing its rights, 7 ··trade name and logo, the appellant company filed a suit in the City Civil Court, j\hmedabad, which was numbered as CS No.

828 of 2000, inter a/ia, for the f~llowing reliefs : "(A) The defendants by themselves, their servants, agents, partners and all persons claiming through or under them be restrained by perpetual order of this Hon'ble Court from, in any manner, using the trade mark 'RAMDEV' in their label, packing materials, advertising materials, business materials etc. , in respect ofgoods which are covered under registration of the plaintiffs mark and/or any mark which may be identical and/or deceptively similar to the plaintiffs registered trade mark and thereby restrain them from infringing the plaintiffs registered trade mark bearing No. 447700 and other marks bearing No. 531084, 531085, 545253, 545253, 545255, 545257 and 545258.

" An application for injunction was also filed wherein the following interim prayers were made : "(A) The defendants by themselves, their servants, agents, partners and all persons claiming through or under them be restrained by an order of temporary injunction of this Hon'ble Court from, in any manner, using the trademark 'RAMDEV' in their label, packing materials, advertising materials, business materials etc. in respect ofgoods which are covered under registration of the plaintiffs mark and/or any mark which may be identical and/or deceptively similar to the plaintiffs registered trade mark and thereby restrain them from infringing the plaintiffs registered trade mark bearing No. 447700 and other marks bearing No. 531084, 531085, 545253, 545255. 545257 and 545258, till the hearing and final disposal of the suit.

(B) The defendants by themselves, their servants, agents, partners and all persons claiming through or under them be restrained by an order of temporary injunction of this Hon'ble Court from using in relation to any spices, masala bearing the name 'RAMDEV' as produced with separate list or any label or packing material or advertising material containing the trade mark 'RAMDEV' and/or any mark which is identical and/or mark containing word 'RAMDEV' either on label or in trading style or trading name, so as to pass off the defendants goods and/or business as that of the plaintiff, till the hearing and final disposal of the suit. " An application was also filed for appointment of a Court Commissioner. DEFENCES OF THE RESPONDENTS The principal defences raised by the respondents in the said suit are as under: (i) The appellant has no exclusive statutory right to use 'Ramdev' RAMDEV FOOD PRODUCTS PVT. LTD. 1: ARVJNDBHA! RAMBHAI PATEL [S. B S! NHA,J] 537 apart from the label as a whole.

(Sections 15 and 17 issue) (ii) The first respondent has a right to use the mark as concurrent user. (Section 29 issue) (iii) That the use complained of is protected, as bona fide user and furthermore the appellant is not entitled to the reliefs sought for as the same were barred under the principles of estoppel, acquiescence, etc. ORDER ON THE APPLICATION FOR INJUNCTION By a judgment and order dated 17. 03. 2000, the learned Trial Judge opined that the plaintiff company was the owner of the trademark. It was further held that the defendants had started manufacturing and marketing the same business which is deceptively similar to the trademark of the plaintiff which created confusion in the mind of public. However, the defe1;1dants were given liberty to manufacture spices in their factory and sell the same in seven outlets under the trademark 'Ramdev Masala'. On an interpretation of the said MOU dated 30. 05. 1998, it was, inter alia, held : "...

Therefore, if there is agreement between the parties that the defendant No. I should purchase spices from the plaintiff for the purpose of retail-sale in 7 outlets, it must have been mentioned in the ·· MOU. No such condition is mentioned. If that be so, it cannot be presumed that the defendants should purchase spices from the plaint:ff for the purpose of retail-sale in 7 outlets. In case of written-agreement between the parties, it should be taken as it is. It should be read as it is. No additional terms and conditions or agreement can be presumed. Therefore, in absence of any specific condition that the defendants should sell spices by using trade-mark "Ramdev" in 7 outlets by purchasing the goods from the plaintiff is not believable. 13. This condition also does not seem to be possible..... 14..... The defendants have arranged for the packing material bearing regd. trade-mark "Ramdev" and used the same for the purpose of retail business.

These facts clearly suggest that there was no restriction on the defendants to purchase spices from the plaintiff for the purpose of retail business. in 7 outlets. On the contrary, the defendant was at liberty to manufacture in their factory and sell the same in 7 outlets for the purpose of retail business. 15. Relevant portion of MOU is reproduced earlier. Accordingly, the defendants are permitted to use the trade-mark or logo "Ramdev'' for the purpose of retail-sale in 7 outlets. The words used suggest that the defendants were entitled to use the tra9e-mark "Ramdev" without any restriction for the purpose of retail sale of spices. It was not compulsory on the part of the defendants to purchase spices from the plaintiff. They can arrange or manufacture in their way and sell the same in 7 retail outlets under the trade-mark "Ramdev". 21 ..... Therefore, he cannot sell spices in other shops under the trademark "Ramdev".

He cail run spices' business and other business in his shop Ramdev Masala. The plaintiff cannot restrict him. " The respondents had been selling a large variety of spices under the trade name "Swad". However, the packings and labels adopted by them were also held to be deceptively similar to the trade-mark "Ramdev" ofthe appellant. Although they had been manufacturing and marketing spices under the trade name 'swad', the respondents had been writing the words "Ramdev Masala" in such a manner that ii creates confusion in the minds of customers. It was, therefore, opined that the respondents had been passing off their goods as if it was manufactured by the appellant. The learned Judge, however, opined that as per the provisions of the Prevention of Food Adulteration Act, 1955, it was mandatory to disclose the name and address of the manufacturer they have been writing their name "Ramdev Masala" as manufacturer which does not create any deception or confusion.

Noticing that the appellant got it entered in the records of the Registrar of Trade Mark by following due procedure and acknowledging that the appellant company is the registered proprietor of trade name bearing logo of "Ramdev", it was held that as the respondents had started manufacturing and marketing spices under the trade name "swad" and they had been selling spices in small packets and in view of the averments made by the appellant that the labels and packings adopted by the respondents were deceptively similar to the registered trademark 'Ramdev' and, therefore, passing off goods as it is manufactured by the plaintiff. The learned Judge further observed : "... Comparing the packing material and label of both the parties, it is clear that the label of the defendants is phonetically and visibly . H similar with the label of the plaintiff. It is deceptively similar with the RAMDEVFOODPRODUCTS PVT. LTD. v. ARVINDBHAI RAMBHAI PATEL(S. B. SINHA,J. 1539 label of the plaintiff.

It creates deception as well as confusion in the minds of customers who are literate, illiterate, male or female, who used to purchase in retail market from small shops as well as big departmental stores. Therefore, there is every likelihood of passing off the goods of the defendants as if it is manufactured by the plaintiff. " It was opined : "As stated earlier, it is proved that the plaintiff is the regd. proprietor of trade-mark "Ramdev" oearing registration No. 44770. The plaintiff has acquired goodwill and reputation of the trade mark "Ramdev Masala" in the market. Packing and label adopted by the defendants for their products "Swad" containing the word "Ramdev Masala" on the front page of the label in larger size, in first alphabet definitely creates deception and confusion. It is deceptively similar with the trade-mark of the plaintiff. Therefore, the plaintiff has proved prima facie case on this point.

As regards the balance of convenience and irreparable injury, it is settled legal position that in case of deception public at large is affected. Unvaried customers are likely to be deceived. When prima facie case is proved, it is necessary in the interest of justice to maintain status quo. Considering above all facts and circumstances, injunction shoulcj be granted against the defendants. " The learned Judge summarised his findings as under : "Para 41 (i) The defendant No. I and consequently all defendants are entitled to use trade mark "Ramdev" for the retail business of spices in 7 outlets as mentioned in M. O. U. It is not mandatory for the defendants to purchase goods from the plaintiff for retail sale in the said outlets. The defendants are at liberty to manufacture spices in their factory and carry on retail business in 7 outlets by using trade-mark "Ramdev" bearing registration No. 44770. (ii) The defendant No.

I is at liberty to run business under the trade name "Ramdev Masala" for retail and wholesale business of spices, instant mix and. other articles. However, he should not use trade-mark "Ramdev" except 7 outlets as mentioned in M. O. U. (iii) Label and packing adopted by the defendants for their goods under the trade-name "Swad" containing word "Ramdev Masala" is creating infringement. of the trade-mark of the plaintiff as it is deceptively similar. Therefore, the defendants should be prevented in using the word "Ramdev Masala" on their label and packing in any manner. However, the defendants are at liberty to manufacture and market spices in any trade name without using the word "Ramdev" or "Ramdev Masala".

The respondents were, thus, restrained by temporary injunction from using registered trademark, logo 'Ramdev' or any other trademark, which is identical and deceptively similar to the trademark of the appellant in respect of label and packing material of their goods except in seven outlets mentioned in MOU till final disposal of the suit. They were held to be at liberty to run business of spices under the trade name 'Ramdev Masala' without using the registered trademark 'Ramdev Masala' except in seven outlets. HIGH COURT JUDGMENT Both the parties preferred appeals thereagainst before the High Court. The High Court by reason of its judgment opined: (i) The chain of events goes to show that the business of grinding spices by using the words "Ramdev" and "Masala" in the fonnation of firm nan:e continued all throughout and, thus, the respondents could be restrained from carrying on business of manufacturing and selling of spices.

(ii) The respondents were permitted users in view of the registered user agreement executed between the parties. (iiO The effect of the MOU could not be wholly detennined as the deeds of retirement had not been produced. (iv) Even if the MOU is kept out of consideration in view ofthe Rules framed under Prevention of Food Adulteration Act and Standards of Weights and Measures Act, the manufacturer is duty bound to display its name and address in the manner, size and placement as prescribed, on the packets. Thus, once a statute prescribes an obligation on manufacturer and stipulates the minimum standards of measurement, the manufacturer is bound to act in accordance with law and cannot be restrained from complying with specific statutory provisions. It, while upholding the findings of the learned trial Judge contained in paragraphs 41(i) and 41(ii); in respect of the directions contained in Para RAMDEV FOOD PRODUCTS PVT. LTD. r. ARVINDBHAI RAMBHAI PATEL[S. B. SINHA, J.

J541 4l(iii), opined: "42. 3 However, finding in paragraph 41 (iii) ofthe impugned judgment requires to be modified. The trial court was in error for the aforestated reasons when it held that printing and publication of the principal display panel was creating infringement of trade mark as it was deceptively similar. The defendants cannot be prevented from using the words "Ramdev" and "Masala" on their label and packing in light of the statutory requirements as stated hereinbefore. However, the defendants shall print the name of the manufacturer using only the minimum standard prescribed, depending upon the nature of the packing and the placement of the principal display panel shall be only at the bottom on the reverse side of the packing and the front portion of the packing shall not carry any principal display panel except for its own brand name "SWAD". SUBMISSIONS: Mr. C. A. Sundaram and Mr.

Ashok Desai, learned Senior Counsel appearing on behalf of the appellant, in support of these appeals submitted: (i) The appellant was entitled to an order of injunction in view of the well-settled principles of law that in case of a registered trade mark, the use thereof by any other person would constitute an infringement thereof. (ii) As there can be only one mark, one source and one proprietor and in particular having regard to the public interest, it was impermissible for the Trial Judge as also the High Court to allow the respondents to use the registered trade mark of the appellant either in the seven outlets or the goods manufactured by them independently. (iii) The trade mark 'Ramdev Masala' used by the respondents being deceptively similar with that of the registered trade mark, the same would interfere with the quality control product of the appellant and, thus, an order of injunction as was prayed for should have been passed.

(iv) The learned Trial Judge as also the High Court misconstrued and misinterpreted the provisions ofthe 1958 Act vis-a-vis Prevention of Food Adulteration Act and Standards of Weights and Measures Act, as in a case of such nature, a mandatory injunction could be issued directing change of the corporate name of the respondent No. I; as the appellant's right to protect its trade mark is absolute. (v) By reason of the MOU, the respondents were only allowed to carry on the existing trade and thereby the respondents were not pennitted to start manufacturing spices under the name and style of' Ramdev Masaia' as would be evident from the fact that they were only entitled to carry on retail business from the seven outlets for the purpose of selling only the end products upon printing the words "not for resale" which is a clear pointer to the fact that merely a right to trade therefrom and not manufacture of spices in the said name had been granted in terms thereof. Mr. F. S.

Nariman, learned Senior Counsel appearing on behalf of the respondents, on the other hand, submitted: (i) The appellant could exercise their right only for the purpose of implementing the MOU which must be read with the deed of retirement dated lst June, 1998, the remedies under the Trade Marks Act are not available against the respondents who were members of the family. (iO The Company, although was not a party to the MOU, but having been represented by the Directors therein must be held to be bound thereby and the parties to the MOU having not filed any special leave petition in their individual capacities, these appeals are liable to be dismissed. (iii) As a distinction exists between a /is based on infringement of a registered trade mark and passing off, the principles which are applicable for grant of injunction in an action for passing off are applicable in the instant case.

(iv) The claim of the appellant to obtain an order of injunction is clearly barred by Sections 15(1) and 15(2) ofthe 1958 Act insofar as a distinctive label having been registered as a whole, no order can be passed restraining the defendants from using a part thereof, as has been held in The Registrar of Trade Marks v. Ashok Chandra Rakhit Ltd, [1955] 2 SCR 252 and Re Cadbury Brothers' Application, (1915) 2 Ch. 307. . Q RAMDEV FOOD PRODUCTS PVT. LTD. 1·. ARVINDBHAI RAMBHAI PATEL[S. B. SINHA.. I. ] 543 .. (v) The appellant itself having applied for 'Ramdev' as a separate trade mark as would appear from a public document, viz. , the Trade Mark Journal No. 6 dated 25. 11. 2003 and the said trade mark having not yet been registered in its favour, no order of injunction as had been prayed for can be passed in its favour.

(vi) In any event, if an order of injunction is passed, against the respondents, they wouId have to be completely dependent upon the appellant for carrying on business which would lead to discord between the members of the family, which was sought to be avoided by the MOU. (vii) In view of the stipulations made in the MOU whereby and whereunder Shri Arvindbhai became the absolute owner of both 'Ramdev Exports' and 'Ramdev Masala' and Hasmukhbhai and Pravinbhai having given up their right thereupon, the First respondent is entitled to carry on the said business in those names which were not required to be changed by reason of the said MOU.

(viii) Furthermore, the stipulations made in the MOU clearly do not oblige the respondent to buy any product from the appellant- Company, and in the event, if it be held that the respondent is bound to sell only the products of the appellant, running of business by the respondent would clearly depend upon the supply of the materials by the appellant alone. (ix) As by reason of the said MOU, the respondent No. I became entitled to use of mark from seven outlets, the same envisages its right to sell goods having the said mark and not sell of the plaintiffs' goods alone. The MOU niust be interpreted in the light of the deed of retirement dated 1. 6. 1998, which categorically contained a stipulation that the continuing partner "have also decided to continue the said business in the same firm names, viz. , 'Ramdev Exports' and 'M/s. Ramdev Masala' and, thus, the appellant cannot now tum round and contend that the respondent cannot carry on business of grinding and selling masala.

(x) In the event the appellant's contention is accepted, the right of the' respondent to continue the business under the name . and style of or in th. :: firm name of 'M/s. Ramdev Masala' and 'Ramdev ~ . ' Exports' would become inconsistent with the deed of retirement ofHasmukhbhai and Pravinbhai from 'Mis. Ramdev Masala' and 'Ramdev Exports'. Dr. A. M. Singhvi, learned senior counsel appearing on behalf of some of the respondents supplemented Mr. Nariman urging that a document upon reading contextually may be found to be a family settlement although the said expression was not used therein. It was, therefore, urged that the courts would lean strongly in favour of the family settlement and the MOU, so read, would operate as estoppel against the other family members who have taken advantage thereof from denying or disputing implementation thereof. STATUTORY PROVISIONS It is not in dispute that the ! is between the parties would be governed by the I958 Act.

"Deceptively similar" has been defined in Section 2(d) of the 1958 Act to mean as under: "A mark shall be deemed to be deceptively similar to another mark if it so nearly resembles that other mark as to be likely to deceive or cause confusion. " Section 20) defines "Mark" to include "a device, brand, heading, label, ticket, name, signature, word, letter or numeral or any combination thereof'. The expression "registered proprietor" has been defined in Section 2(q) to mean a person for the time being entered in the register as proprietor of the trade mark in relation to a trade mark. Chapter JI provides for appointment ofthe Controller-General of Patents, Designs and Trade Marks for the purpose of the said Act. Sections 15 and 17 read as under: "15. Registration of parts of trade marks and of trade marks as a series. -(!

) Where the proprietor of a trade mark claims to be entitled to the exclusive use of any part thereof separately, he may apply to register the whole and the part as separate trade marks. - (2) Each such separate trade mark shall satisfy all the conditions applying to and have all the incidents of, an independent trade mark. (3) Where a person claiming to be the proprietor of several trade marks in respect of the same goods or description of goods which, RAMDEV FOODPRODUCTS PVT. LTD. 1·. ARVINDBHAI RAMBHAI PATEL [S. B. SINHA. J. J 545 while resembling each other in the material particulars thereof, yet differ in respect of- (a) statement of the goods or services in relation to which they are respectively used or proposed to be used; or (b) statement of number, price, quality or names of places; or (c) other matter of a non-distinctive character which does not substantially affect the identity of.

the trade mark; or (d) colour; seeks to register those trade marks, they may be registered as a series in one registration. 17. Registration oftrade marks subject to disclaimer.

If a trade mark- (a) contains any part- (i) which is not the subject of a separate application by the proprietor for registration as a trade mark; or (ii) which is not separately registered by the proprietor as a trade mark; or (b) contains any matter which is common to the trade or is otherwise of a non-distinctive character, The tribunal in deciding whether the trade mark shall be entered or shall remain on the register, may require, as a condition of its being on the register, that the proprietor shall either disclaim any right to the exclusive use of such part or of all or any portion of such matter, as the case may be, to the exclusive use of which the tribunal holds him not to be entitled, or make such other disclaimer as the tribunal may consider necessary for the purpose of defining the rights of the proprietor under the registration: Provided that no disclaimer shall affect any rights of the proprietor of a trade mark except such as arise out of the registration of the trade mark in respect of which the disclaimer is made.

" Chapter III provides for the procedure for and duration of registration. The 1958 Act envisages filing of an application (Section 18), advertisement thereof (Section 20), opposition thereto (Section 21) and correction and amendment thereof (Section 22). Registration of a trade mark is envisaged in Section 23 of the 1958 Act, the effect whereof is stated in Section 27 thereof. The rights which are conferred by registration are stated in Section 28 of the 1958 Act in the following terms: "28. Rights conferred by regislralion. -(1) Subject to the other provisions of this Act, the registration of a trade mark in Part A or Part B of the register 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 ofthe trade mark in the manner provided by this Act.

(2) The exclusive right to the use of a trade mark given under subsection (I) 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 ofany 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 ! f he were the sole registered proprietor. " Section 29 provides for the consequences of infringement of trade marks in the following terms: "29. Infringement ofregistered trade marks.

-(1) A registered trade mark is infringed by a person who, not being a registered proprietor ofthe trade mark or a registered use thereof using by way of permitted use, uses in the course of trade mark which is identical with, or deceptively similar to, the trade mark in relation to any goods 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. RAMDEVFOODPRODUCTS PVT. LTD. "·~. Al RAMBHAI PATEL[S. B. SINHA,J.

]547 /~ (2) In an action for infringementif a trade mark registered in Part of the register an injunction or other relief shall not be granted to the plaintiff if the defendant establishes to the satisfaction of the court that the use of the mark of which the plaintiff complains is not likely to deceive or cause confusion or to be taken as indicating a connection in the c6urse of trade between the goods in respect of which the trade I ~ mark is registered and ·some person having the right, either as registered· I proprietor or as registered user, to. u·se the trade mark. " Section 33 provides for saving of vested rights. INTERPRETATION OF DEED-PRINCIPLES OF MOU, for the purpose of these appeals, may be treated to be a family settlement. It is, however, well-known that intention of the parties to an instrument must be gathered from the terms thereof examined in the light of the surrounding circumstances. [See Sohan Lal Naraindas v.

Laxmidas Raghunath Gadit, [1971] l SCC 276] In Delta International ltd. v. Shyam Sundar Ganeriwal/a, [I 999] 4 SCC 545, this Court noticed: "17. For construction of contracts between the parties and for the interpretation of such document, learned Senior Counsel, Mr Desai has rightly relied upon some paragraphs from The Interpretation of Contracts by Kim Lewison, Q. C. as under: "l. 03 For the purpose of the construction of contracts, the intention of the parties is the meaning of the words they have used. There is no intention independent of that meaning. 6. 09 Where the words of a contract are capable of two meanings, one ofwhich is lawful and the other unlawful, the former construction should be preferred. Sir Edward Coke [Co. Litt.

42a] expressed the proposition thus: 'It is a general rule, that whensoever the words of a deed, or of one of the parties without deed, may have a double intendment and the one standeth with law and right, and the other is wrongful and against law, the intendmcnt that standeth with law shall be taken. "' 548 SUPREME Ce>URT REPORTS [2006] SUPP. 5 S. C. R. It is further stated: "For that purpose, he referred to the folio-wing observations of Buckley, J. from the paragraphs which are sought to be relied upon from The Interpretation of Contracts by Kim Lewison, Q. C. : "My first duty is to construe the contract, and for the purpose of arriving at the true construction of the contract, I mus~ disregard what would be the legal consequences of construing it one way or the other way. "" Moreover, the document is to be read as a whole. It is equally well settled that the deed has to be construed keeping in view the existing law.

It is now a well-settled principle of law that a document must be construed having regard to the terms and conditions as well as the nature thereof. [Union of India v. Mis. Millenium Mumbai Broadcast Pvt. Ltd. , (2006) 5 SCALE 44] MOU We may proceed on the basis that the MOU answers the principles of family settlement having regard to the fact that the same was actuated by a desire to resolve the disputes and the courts would not easily disturb them as has been held in S. Shanmugam Pillai and Ors. v. K. Shanmugam Pillai and Ors. , [1973] 2 SCC 312, Kale and Ors. , v. Deputy Director ofConsolidation and Ors. , [1976] 3 SCC 119 and Hari Shankar Singhania & Ors. v. Gaur Hari Singhania & Ors. , JT (2006) 4 SC 251. Although at one point of time the appellant-Company had taken a stand that it being not a party to the MOU, it is not bound by the terms thereof .

F but the same would not mean that in an action for infringement of trade mark, when the MOU was put as a shield to its claim, it could not have taken recourse to proper interpretation thereof for the purpose of determination of the rights of the parties to use the trade mark in question. It is not a case where the courts refused to lean in favour of family arrangement or base its decision on technical or trivial ground. We have been taken through the MOU again and again. It fell for judicial interpretation. Interpretation processes were undertaken by the Courts below. The same would also be reviewed by us hereafter. MOU - ANALYSIS OF The appellant before us is a Company registered and incorporated RAMDEV FOOD PRODUCTS PVT. LTD. v. ARVINDBHAI RAMBHAI PATEL [S. B. SINHA,]. ] 549 under the Companies Act. Indisputably, the parties to the MOU being Arvindbhai, Hasmukhbhai and Pravinbhai were its Directors. They are all brothers.

All the shares of the Company were held by them and their family members. The Company although is a juristic person was not made a party . thereto. The effect of the Company being not a party may have to be considered by the Trial Court in the suit; but, as the parties for the purpose of disposal of this appeal proceeded on the basis that the MOU was entered into by and between the parties thereto; an endeavour shall be made to construe the same as it stands. We would, however, like to observe that in the event any other attending circumstances are brought on record by way of adduction of oral evidences, if permissible in law, warranting a different interpretation of the said MOU, the learned Trial J~dge would be at liberty to do so. We may furthermore place on record that we are construing the said MOU only for the purpose of disposal of an interlocutory matter which would not, thus, be binding on the courts below at the final hearing of the suit. The broad propositions which are.

evident from a perusal of the said MOU appear to be as under: Among all the three brothers, Arvindbhai who was the eldest among them is on one side and Hasmukhbhai and Pravinbhai are on the other. The division of the assets is broadly arrived at in that proportion. The Counsel appe 129 F. 2d at 1252]. ~t, is the subliminal confusion apparent in the record as to the relationsl! ip, past and present, between the corporate entities and the products that can transcend the competence of even the most sophisticated consumer. Misled into an initial interest, a potential Steinway buyer may satisfy himself that the less expensive Grcitrian-Steinweg is at least as good, if. not better, than a Steinway. Deception and confusion thus work to appropriate defendant's good will. This confusion, or mistaken beliefs as to the companies' interrelationships, can destroy the value of the trademark which is intended to point to only one company [American Drill Busing Co. v. Rockwell Mfg. Co. , 342 F.

2d 1922, 52 CCPA 1173 (1965)]. Thus, the mere fact that purchasers may be sophisticated or discriminating is not sufficient to preclude the likelihood of confusion. "Being skilled in their own art does not necessarily preclude their mistaking one trademark for another when the marks are as similar as those here in issue, and cover merchandise in the same general field" [Id]. RAMDEVFOODPRODUCTS PVT. LTD. v. ARVINDBHAI RAMBHAI PATEL [S. B. SINHA,J. ]555 Having regard to the above discussion prima facie I am ofthe opinion that the word Baker occurring in the corporate name of the second defendant suggests its connection or nexus with 'Baker', which depicts a wrong picture as from February, 1995. ~~~ker' has terminated its relation "{ijh the d. efendants. The continuance of the word Baker as part of the;corporate name of the second defendant is likely to cause deception }nd confusion in the minds of the customers. There..

would be no justification for the second defendant to use the word Baker as part of its corporate name after the tiis between the first plaintiff and ~- ~the seco~d defendant ha\'8. -ceaseMo exist. " - ". C? The saidcJ~cision has been noticed by this Court in Baker Hughes ltd and Anr. v. Hirao Khushlani and Anr. , [2004] 12 SCC 628. In Mi/met Ofiho Industries and Ors. v. Allergan Inc. , [2004] 12 SSC 624, in regard to medicinal products, this Court opined: "... Whilst considering the possibility of likelihood of deception or confusion, in present times and particularly in the field of medicine, the courts must also keep in mind the fact that nowadays the field of medicine is of an international character. The court has to keep in mind the possibility that with the passage of time, some conflict may occur between the use of the mark by the applicant in India and the user by the overseas company. The court must ensure that public interest is in no way imperilled.....

" We may in this connection notice a recent judgment of the European Court of Justice in Canon Kabushiki Kaisha (supra) wherein it was opined: "28. That case concerned ihe interpretation of Article 4(I)(b) of the p Directive in so far as it refers to "a likelihood of confusion on the part of the. public, which includes the likelihood of association with the earlier trade mark". The court explained that it had been submitted that . "the likelihood of association may arise in three sets ofcircumstances: (I) where the public confuses the sign and the mark in question (likelihood ofdirect confusion); (2) where the public makes a connection between the proprietors ofthe sign and those ofthe mark and confuses them (likelihood of indirect confusion or association); (3) where the public considers the sign to be similar to the mark and perception of the sign calls to mind the memory of the mark, although the two are \ • not confused (likelihood of association in the strict sense).

(Paragraph 16 of the judgment). 29. The court stated that it was therefore necessary to determine "whether Article 4( I)(b) can apply where there is no likelihood of direct or indirect confusion, but only a likelihood ofassociation in the strict sense" (paragraph 17 ofthe judgment). It concluded: "The terms of the provision itself exclude its application where there is no likelihood of confusion on the part of the public". (paragraph 18 of the judgment). Thus, the court held that "the mere association which the public might make between two trade marks as a result of their analogous semantic content is not in itself a sufficient ground for concluding that there is a likelihood of confusion" within the meaning ofArticle 4(1 )(b). " TRADE MARK AND GOODWILL Traditionally, a trade mark has always been considered a vital and inseparable part of the goodwill of the business. In fact, the sale of a trade mark without the sale of the goodwill to the same buyer is considered null and void.

However, the trade mark can be assigned with or without the goodwill of business though subject to certain conditions. [See VA. Mohta 's Trade Marks, Passing Off and Franchising, pages 12, 313. ] ENTITLEMENT TO USE The contention of the appellant before the Courts below was that its right to the said trade mark has been entrenched by the respondents on account of use of the same as part of the trade name in view of the fact that .. although it has started the business in the trade name 'Swad', the first respondent, on the label and the packing material of the said product, had printed the name of the manufacturer 'Ramdev Masala' in such a prominent manner that the same would create an impression in the mind of the ordinary unwary customer that the same is a product of the appellant Company. It also alleged that the respondents had adopted advertisements, marketed and displayed boards in such a manner so as to deliberately deceive the customer.

The concurrent finding of fact arrived at by both the courts was that the packing material and wrapper of both the parties were phonetically and visibly similar to the registered mark. The packing material and label used by the respondents were deceptively similar to that ofthe appellant and the same creates deception as well as confusion in the minds of customers who are •· RAMDEV FOOD PRODUCTS PVT LTD. v. ARVINDBHAI RAMBHAI PATEL [S. B. SINHA, J. ]557 ... literate, illiterate, male or female, who used to purchase in retail market from small shops as well as big departmental stores. The learned Trial Court as also the High Court proceeded on the basis that the respondents are entitled to use the said trade mark by reason of the stipulations contained in the said MOU as a result whereof they became entitled to use the trade mark Ramdev for their retail business of spices in seven outlets, which used to be belonging to the company.

The said outlets were meant to be used for retail ~ale of the products of the appellant alone. The learned Trial Judge as also the High Court, however, failed to notice two significant and important provisions in the said MOU, viz. , (i) the defendants could not carry on business in wholesale of the said products; (ii) it was meant to be sold directly to the consumers and on the productions "not for resale" was required to be printed on each packet. What, therefore, could be done by the respondents was to sell the products of the appellant through the said outlets. It was one of the primary business of the partnership firm which was given to the first respondent. Primafacie, therefore, the first respondent could sell only the product of the appellant. The respondents, however, were not restrained from manufacturing spices in their own factory. They were entitled to do so. They started the same under the brand name of 'Swad'.

They could even use the same retail outlets for the purpose of promoting their own products but prima facie they could not use the mark registered in the name of the appellant Company. The registration number of trade mark is 447700. Once the appellant had acquired goodwill and reputation thereto, in the event of any infringement to the said right, the remedies provided for in the 1958 Act would be available to it. The terms ofthe MOU, .. in our opinion, are clear and unambiguous. It was required to be construed, even if it was obscure to some extent by making attempt to uphold the one which would be in consonance with law and not offend the same. Quality control by a registered trade holder vis-a-vis the one produced by an unregistered one is one of the factors which is required to be taken into consideration for the purpose of passing an order of injunction.

It is one thing to say that the respondents were permitted to carry on trade but it would be another thing say that they would be entitled to manufacture and market its ... products under a name which would be deceptively similar to that of the registered trade mark of the appellant. So long the parties to an arrangement can continue to carry out their respective businesses without infringing the right of another, indisputably the terms thereof must be given effect to. But ' ' .... the matter would be entirely different when a party who has not been expressly authorised to manufacture the goods in which the Company had been carrying on business under the same name, the respondents under law could not have been permitted to carry on the manufacturing and marketing of their products under the same name. In a case of this nature, even, a mandatory injunction can be granted.

The respondents in the instant case have adopted a part of the appellant's registered trade mark as a part of its corporate name. They had merely been permitted to trade from seven outlets. In that view of the maher, they had a limited right under the MOU and by reason thereof they could not have been permitted to start manufacturing of spices under the name and style of 'Ramdev Masala'. Even under the common law, licence has to be interpreted to subsume the law and prevent the mischief which is deceptive having regard to the fact that trafficking in trade mark is not permitted. It is true that the respondents have been permitted in terms of the MOU to continue their business in the name of the partnership firm and to use the label mark, logo, etc. but the said MOU must be construed in the light of the law operating in the field. For the said purpose, prima facie, the deeds of retirement are not required to be looked into.

When a right to use a trade mark is given, such a right can be exercised only in the manner laid down therein. If in absence of any express licence or agreement to use its label the respondents use the self-same trade mark, the same would not only lead to confusion but may also cause deception. Even a common law licence, it is well-settled, cannot result in the dilution of the trade mark. In that view of the matter, we are not in a position to subscribe to the views of the learned Trial Judge and the High Court that although the first respondent would be at liberty to carry on the business of manufacture of ·• p spices, it can use the mark 'Ramdev' only in seven outlets. It evidently in view of the legal position, could do so in respect of the products of the appellant alone, which would be evident from the fact that at the relevant point of time, the respondents were not carrying any such business.

The direction of the learned Trial Judge that the respondents should be prevented from using the words "Ramdev Masala" and their label and packing, however, has been over-turned by the High Court on the premise that they are required to observe the statutory requirements under the Prevention of Food Adulteration Act, 1955 as also the Standards of Weights and Measures Act, 1976. RAMDEV FOOD PRODUCTS PVT. LTD. r. ARVINDBHAI RAMBHAI PATEL[S. 8. SINHAJ] 559 NON-OBSTANTE PROVISIONS The non-obstante nature of a provision although may be of wide amplitude, the interpretative process thereof must be kept confined to the legislative policy. A non-obstante clause must be given effect to, to the extent the Parliament intended and not beyond the same. [See ICICI Bank ltd. v. Sidco leathers ltd. & Ors.

, (2006) 5 SCALE 27) The question which also escaped the attention of the High Court was "·V that having regard to the non-obstante clause contained in Section 30 of the I958 Act ordinarily for any purpose, the trade mark cannot be infringed. Ifan infringement of trade mark is established, the onus would be on the defendants to show that he is entitled thereto either by reason of acquiescence on the part of the owner of the registered trade mark or he himself has acquired a right thereto. The Provisions of the Standards of Weights and Measures Act or the Prevention of Food Adulteration Act do not confer such right. Yet again, significantly, a pre-emptive right had been conferred in favour of the first respondent which is itself suggestive of the fact that the first respondenf admitted and acknowledged the right of the appellant to the said trade mark.

In the MOU, furthermore it was categorically stated that the use of the trade mark was only to the extent of retail sale as on the packages, the words "not for resale" were to be printed. If the parties intended to allow the first respondent herein to manufacture his own products and to market the same by using the name of Ramdev Masala, the question of grant of a right to sell only in retail and that also printing the words 'not for resale' would not have arisen. A manufacturer is not only entitled to sell his own products in retail but also in wholesale. It can use any outlet for the said purpose whether belonging to it or any other. It would lead to an anomaly if it be held that the first respondent would be permitted not only to sell the products of the appellant but also its own products under the same trade name albeit only from the seven outlets.

By reason of the said MOU, the respondents are not bound to buy any product from the appellant but there is an obligation on the part of the appellant to supply the same as otherwise it would lead to closure of business of Arvindbhai which would not have been the intention of the parties. When the parties had settled their disputes, it was expected that the outlets would be utilised for the purposes for which they were meant to be utilised. What were the mutual obligations ofthe parties is a matter which can be considered \ . only at the trial or in any other appropriate proceeding, but primafacie it goes P' without saying that the first respondent, in any event, was entitled to sell also his own products from the said outlets. The parties for the said purpose thought of remaining mutually dependent as it was stipulated that while also competing with each other they would see to it that by action of one, the other is not harmed at least while exporting the materials.

It is, thus, not a case where the appellant having taken advantage of the terms of the MOU had resiled therefrom and in that view of the matter the principle of estoppel cannot be said to have any application in the instant case. We are also not in a position to accept the submission of Mr. Nariman that the MOU must be read with the deed of partnership or the deeds of retirement whereby and whereunder the firm 'Ramdev Masala' and 'Ramdev Exports' were permitted to use the word 'Ramdev'. What is registered is a logo wherein the words 'Ramdev' and 'Masala' are prominent. A person may be held to be permitted to carry on business in spices as contradistinguished from the permission to carry on manufacturing goods which are similar to that of the appellant, but in terms of the statutory provisions, the respondents were not legally permitted to sell its products in packages or labels which would be deceptively similar to that of the registered owner of a trade mark.

The right to manufacture masala and to sell the same with the registered logo, it will bear repetition to state, was assigned as far back in 199I. If the contention of the Senior Counsel is accepted, the said pu