Stay in Suit for Passing Off


Court :
Mumbai High Court

Brief :
Scope of Section 124 : Trade Marks Act - discussed - applicability in suit for passing off

Citation :
M/S Shakti Traders vs M/S Shakti Press Ltd

 

Heard Shri S. Dewani, learned counsel for petitioner and Shri Khati, learned counsel for respondent.

2. Rule.

3. By consent heard forthwith.

4. By this petition the petitioner challenges the order dated 24.7.2007 2

passed by the 6th Ad hoc District Judge, Nagpur in Civil Suit No. 7/2006 by which the trial court allowed the application (Exh.25) filed by respondent and stayed the suit till pendency of the dispute before the Appellate Board.

5. The petitioner is the plaintiff and respondent is the defendant in the above referred suit. The parties shall be hereinafter referred to as per their status before the trial court.

 

6. The plaintiff is dealing in manufacture of the books and stationary products under the trade mark of "Shakti" which is a registered trade mark under Section 16 of the Trade Marks Act, 1999 (hereinafter referred to as 'the Act'). Since the defendant was also selling products under the same name the plaintiff filed the suit seeking several reliefs against the defendant. It appears that the defendant had also got the trade mark registered in his favour. It is not in dispute that the application filed by the plaintiff for rectification of the registration before Appellate Board. In the suit the plaintiff sought interim relief which was refused by the trial court. However, Appeal from order no. 15/07 preferred by the plaintiff was disposed of by order dated 23rd March, 2007 with certain directions. One of the directions was to dispose of the suit within three months from the date of receipt of the order of the court. Thereafter, the defendant filed an application for stay of the suit under Section 124 of the Act. The same was opposed by the plaintiff. However, by the impugned order dated 24.07.2007 the trial court stayed the suit till pendency of the dispute 3

before the Appellate Board. The trial court held that since the dispute between the parties was pending before the Appellate Board the suit was liable to be stayed to avoid conflicting decisions. Aggrieved by the said order the plaintiff has approached this court invoking writ petition.

 

7. Mr. Dewani, the learned counsel for the plaintiff submitted that the application filed by the defendant under Section 124 of the Act was not maintainable inasmuch as relief under Section 124 of the Act can be claimed only in the suit for infringement of a trade mark and since the plaintiff had filed the suit for passing off action against the defendant the application was not tenable under Section 124 of the Act. Placing reliance upon Section 134 of the Act Mr. Dewani submitted that the suit can be filed for infringement of registered trade mark or for passing off action arising out of the use by the respondent of any trade mark which is identical with the plaintiff's trade mark whether registered or un-registered. According to Mr. Dewani, in a suit in which the plaintiff claims relief on the basis of passing off action the application under Section 124 of the Act is not maintainable. He, therefore, submitted that the trial court has exercised jurisdiction illegally and has committed patent error in law while passing impugned order.

 

8. Per contra, Mr. Khati for respondent/defendant submitted that the suit is essentially for infringement of trade mark and, therefore, the application under Section 124 of the Act was maintainable. Mr. Khati also placed reliance upon 4

Sections 27 and 28 of the Act and submitted that the trial court was perfectly justified in passing the impugned order.

 

9. I have considered the submissions made by the learned counsel for the parties and perused the record.

 

10. Sub section (1) of Section 124 of the Act which is relevant for disposal of the petition reads thus:

"124. Stay of proceedings where the validity of registration of the trade mark is questioned, etc.

(1) Where in any suit for infringement of a trade mark--

(a) the defendant pleads that registration of the plaintiff's trademark is invalid; or

(b) the defendant raises a defence under clause (e) of sub-section (2) of section 30 and the plaintiff pleads the invalidity of registration of the defendant's trade mark,

the court trying the suit (hereinafter referred to as the court), shall---

(i) if any proceedings for rectification of the register in relation to the plaintiff's or

defendant's trade mark are pending before

the Registrar or the Appellate Board, stay

the suit pending the final disposal of such

proceedings;

(ii) if no such proceedings are pending and the 5

court is satisfied that the plea regarding the invalidity of the registration of the plaintiff's or defendant's trade mark is prima facie

tenable, raise an issue regarding the same

and adjourn the case for a period of three

months from the date of the framing of the

issue in order to enable the party

concerned to apply to the Appellate

Board for rectification of the register."

Section 134 (1) of the Act which is also relevant for disposal of the petition reads thus:

"134. Suit for infringement, etc., to be instituted before District Court (1) No suit---

(a) for the infringement of a registered trade mark; or (b) relating to any right in a registered trade mark; or ( c) for passing off arising out of the use by the defendant of any trade mark which is identical with or deceptively similar to the plaintiff's trade mark, whether registered or unregistered,

Shall be instituted in any court inferior to a District Court having jurisdiction to try the suit."

 

11. Perusal of the above provisions clearly discloses that a suit can be filed either for infringement of a registered trade mark or for passing off action under Section 134 of the Act. Under Section 124 of the Act the court trying the suit for 6

infringement of a trade mark is bound to stay the suit if any proceedings for rectification of the registration in relation to the plaintiff's or defendant's trade marks are pending before the Registrar or the Appellate Board. Thus, it is clear that the court dealing with a suit for infringement of a trade mark only is bound to stay the suit when proceedings are pending before the Registrar or the Appellate Board. Section 124 does not provide for stay of a suit filed for passing off under Section 134 (1)(c) of The Act.

 

12. Perusal of the plaint in the above suit discloses that the suit is primarily based on passing off action and the suit is not for infringement of the trade mark. In paragraph 19 of the plaint, the plaintiff has specifically averred that he has made out a strong case based on passing off action. It is, therefore, clear that the suit is based on passing off action and as such suit has been filed under clause ( c) of sub section 1 of Section 134 of the Act. Obviously, therefore, Section 124 of the Act which is applicable only in a suit filed for infringement of trade mark is not attracted. The learned counsel for the respondent fairly submitted that there is no other provisions in the Act permitting stay of the suit.

 

13. In view of the above, the impugned order passed by the trial court is patently unsustainable in law inasmuch as the trial court had no jurisdiction to pass the impugned order since Section 124 of the Act was not attracted. 7

14. For the reasons aforesaid, the impugned order dated 24.7.2007 is quashed and set aside and the trial court is directed to dispose of the suit expeditiously. As stated above this court by order dated 23rd March, 2007 had directed expeditious disposal of the suit and the time prescribed by the said order has already expired. In view of this position, the trial court is directed to dispose of the suit within 3 months from the date of receipt of the order passed by this court. The parties shall appear before the trial court on 29.8.2008 at 11.00 a.m..

15. Rule is made absolute in the aforesaid terms. At this stage Mr. Khati, learned counsel for the respondent submits that the order passed be stayed for a period of four weeks. Since the matter before the trial court has been fixed on 29.8.2008 the question of granting stay of the order for four weeks does not arise. Hence, prayer is rejected. 

 

G. ARAVINTHAN
on 01 December 2010
Published in Intellectual Property Rights
Views : 4032

Tags :- stay suit passing off

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