Full Judgment Text
2023INSC831
NonReportable
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 2768 OF 2023
Brihan Karan Sugar Syndicate
Private Limited … Appellant
versus
Yashwantrao Mohite Krushna
Sahakari Sakhar Karkhana … Respondent
J U D G M E N T
ABHAY S. OKA, J.
FACTUAL ASPECTS
1. The appellant, who is the original plaintiff has preferred
this appeal for challenging the impugned judgment and order
rd
dated 23 June 2021 passed by the learned Single Judge of
the High Court of Judicature at Bombay (Aurangabad Bench).
By the impugned judgment, the High Court has stayed the
execution and operation of the judgment and decree dated
th
24 May 2021 passed by the learned District Judge1,
Osmanabad, in a suit filed by the appellant.
Signature Not Verified
Signature Not Verified
Digitally signed by
Anita Malhotra
Date: 2023.09.14
17:59:03 IST
Reason:
Digitally signed by
Anita Malhotra
Date: 2023.09.14
18:03:36 IST
Reason:
2. The appellant–plaintiff is engaged in selling country
liquor with the label “Tango Punch”. The respondent–
Civil Appeal No.2768 of 2023 Page 1 of 17
defendant is engaged in selling country liquor with the label
“Two Punch Premium”. The case of the appellant is that it
has a copyright in the artistic label displayed on the bottles of
country liquor sold by it. The appellant claimed permanent
injunction restraining the respondent from infringing
copyright in its artistic label either by reproducing the label or
the substantial part of it in any material form by printing,
publishing or using the label or any other work, which is an
imitation or reproduction of the appellant’s label or
substantial part thereof. In the suit, the appellant also prayed
for a decree of injunction restraining the respondent from
manufacturing, selling, offering for sale, advertising, or
otherwise dealing in country liquor having the appellant’s
trade mark label or any deceptively similar trademark label so
as to pass off the country liquor of the respondent as and for
the wellknown country liquor of the appellant. After a
complete trial, the learned District Judge decreed the suit by
passing the following decree:
“ Suit is decreed with costs.
1.
Defendant or anybody claiming through
2.
it, are hereby permanently restrained by
an order of perpetual injunction from
infringing the Plaintiff's copyright in its
artistic labels Annexure 'A', 'A1'
(Exh.66), 'B' and 'Bl' (Exh.71) by
reproducing the same or substantial part
thereof in material form or by printing,
publishing or using the impugned label
Annexure‘C' (Exh.74) or any other work
which is an imitation or reproduction of
Civil Appeal No.2768 of 2023 Page 2 of 17
the Plaintiffs above mentioned artistic
labels or substantial part thereof.
3. Defendant or anybody claiming through
it, are hereby further restrained by an
order of perpetual injunction from
manufacturing, selling, offering for sale,
advertising or otherwise dealing in
country liquor bearing the trade mark
label Annexure'C'. (Exh.74) or any other
trade mark label deceptively similar to the
Plaintiff’s trade mark label Annexure 'A’
in Exh.66 and 'B' in Exh. 7l so as to pass
off or enable others to pass off.
Defendant to pay to the Plaintiff within
4.
a month from this day, a sum of
Rs.1,00,000/ by way of damages for the
infringement and passing off.
5. Defendant is directed to deliver to the
Plaintiff for destruction the labels,
wrappers, goods, dies and literature,
books and printing material and things
being the impugned label Annexure'C'
(Exh.74), within one month and Plaintiff
shall pass receipt/acknowledgement
thereof.”
3. After considering the oral and documentary evidence,
the learned Trial Judge held that the entries in the register of
copyrights in respect of the label “Tango Punch” showed that
the appellant was the owner of copyright in the said label.
The learned Trial Judge held that the labels used by the
respondent on the liquor bottles sold by the respondent were
deceptively similar to the labels used by the appellant. The
learned Trial Judge further held that the respondent, by
reproducing a substantial part of the label of the appellant
Civil Appeal No.2768 of 2023 Page 3 of 17
has infringed the copyright of the appellant. It was also held
that the appellant has proved that the respondent was using
a label by substantially reproducing the contents of the label
used by the appellant. Hence, the Trial Court held that the
appellant was entitled to a permanent injunction on both the
counts, viz., infringement of copyright and passingoff.
Being aggrieved by the said decree, the respondent
4.
herein preferred an appeal before the High Court. By the
impugned judgment and order, the learned Single Judge of
the High Court stayed the execution and the operation of the
decree till the final disposal of the appeal.
SUBMISSIONS
5. The learned counsel appearing for the appellant has
taken us through the judgment of the Trial Court and the
impugned judgment. The learned counsel submitted that the
learned Single Judge of the High Court ought not to have
attached much importance to the fact that during the
pendency of the suit, the application made by the appellant
claiming interim relief in terms of the decree prayed in the
suit was rejected, which was affirmed by the High Court. He
urged that since after a complete trial, a decree was passed in
favour of the appellant, it ought not to have been stayed. He
submitted that merely because the appellant withdrew its
objections raised before the Commissioner for State Excise to
the labels used by the respondent, the rights of the appellant
under the copyright and trademark cannot be defeated. The
Civil Appeal No.2768 of 2023 Page 4 of 17
learned Single Judge had no reason to disturb the findings
recorded by the Trial Court based on evidence by granting a
drastic relief of stay of the execution of the decree.
6. The learned counsel has produced, for the perusal of the
Court, the specimen bottles in which country liquor is being
sold by the appellant and the respondent. He contended that
there are striking similarities in the labels used by the
appellant and the respondent. He placed reliance on the
decisions of this Court in the cases of Cadila Health Care
1
Ltd. v. Cadila Pharmaceuticals Ltd. and Laxmikant V.
2
Patel v. Chetanbhai Shah & Anr. . He submitted that
acquiescence in the context of copyright does not mean mere
silence or inaction. It implies a positive act which is absent in
this case. He submitted that it is not necessary for a plaintiff
to prove a long user to establish a reputation of his product in
a passingoff action. He also submitted that merely because
there is a possibility of disrupting the business of the
respondent/defendant, the Court cannot stay the decree of
injunction. His submission is that after a fullfledged trial,
findings have been rendered in favour of the appellant by the
Trial Court which cannot be nullified by grant of stay. His
submission is that granting relief of stay, at this stage,
virtually amounts to granting final relief in the appeal, which
is not permissible in law.
1 (2001) 5 SCC 73
2 (2002) 3 SCC 65
Civil Appeal No.2768 of 2023 Page 5 of 17
7. On the other hand, the learned senior counsel
appearing for the respondent submitted that no evidence was
adduced to establish that the brand and label of the appellant
were wellestablished in the market. He submitted that apart
from the fact that there is no similarity between the labels
used by the parties, the appellant has not adduced evidence
to prove its figures of sale, turnover, advertisement expenses,
etc. Mere production of a certificate of a Chartered
Accountant was not sufficient and in fact, it was necessary to
examine the Chartered Accountant and other witnesses to
prove the documents. He pointed out that an application was
made by the respondent to the Excise Commissioner for
approval of the labels to be used on the liquor bottles sold by
it. The appellant raised an objection but later on, withdrew
the same. He submitted that the long delay on the part of the
appellant in approaching the Court itself amounts to
acquiescence. He submitted that for granting a stay to the
execution of the decree, it was not necessary for the learned
Judge to record detailed reasons, especially when it was an
th
admitted position that by submitting a letter dated 25 April
2016, the appellant withdrew the objections raised by it to the
respondent’s application for approving the label. He
submitted that the objections were withdrawn by the
th
appellant on 25 April 2016, but the suit was filed by the
th
appellant on 4 October 2017 which is nearly one and half
years after the objections were withdrawn.
Civil Appeal No.2768 of 2023 Page 6 of 17
8. The learned senior counsel relied upon the following
decisions in support of his submissions:
Khoday Distilleries Ltd. v. Scotch Whisky
3
Association & Ors. ;
Toyota Jidosha Kabushiki Kaisha v. Prius Auto
4
Industries Ltd. & Ors. ;
Corn Products Refining Co. v. Shangrila Food
5
;
Products Ltd.
Ciba Ltd. Basle Switzerland v. M. Ramalingam
and S. Subramaniam trading in the name of
South Indian Manufacturing Co., Madura &
6
Anr. ;
th
A decision of the Court of Appeal dated 24 January
1990 in the case of Payton & Co. Ld. v. Snelling
Lampard & Co. Ld. and a decision of the House of
th
Lords dated 8 February 1990 in the case of Reckitt
7
& Colman Products Ltd. v. Borden Inc. & Ors.
CONSIDERATION OF SUBMISSIONS
9. We may note here that we are referring to the rival
contentions in detail only because very detailed submissions
were made before us. But we are conscious of the fact that
we are dealing with an interim order passed during the
pendency of an appeal against the decree and that the appeal
is pending. The appeal has been admitted for hearing. While
3 (2008) 10 SCC 723
4 (2018) 2 SCC 1
AIR (1960) SC 142
5
6 AIR (1958) Bom 56
7 (1990) 1 WLR 491
Civil Appeal No.2768 of 2023 Page 7 of 17
dealing with the prayer for a stay of execution of the decree
subject matter of challenge, it was not necessary for the High
Court to make an indepth consideration of the merits of the
appeal. Only a prima facie consideration was required to be
made by the High Court. One of the relevant factors which
was considered by the High Court was that in the suit filed by
the appellant, the relief of temporary injunction was denied to
the appellant. The said relief was denied by the Trial Court
th
by the order dated 12 April 2019, which was confirmed by
th
the High Court by the judgment and order dated 7 January
2020. Thus, during the pendency of the suit, there was no
prohibitory order operating in favour of the appellant. This
aspect was certainly relevant when the Court decided the
prayer for a grant of a stay of the execution of the decree
pending a substantive appeal.
10. There is a finding recorded by the High Court in the
impugned judgment that the labels used on the bottle of
country liquor sold by the appellant and the labels on the
bottle of country liquor sold by the respondent are similar. At
this stage, we may note the legal position regarding the
factual details which are required to be proved in a passing
off action. Firstly, we may refer to a decision of this Court in
the case of
Satyam Infoway Ltd. v. Sifynet Solutions (P)
8
Paragraphs 13 to 15 of the said decision read thus:
Ltd.
“13. The next question is, would the
principles of trade mark law and in
8 ( 2004) 6 SCC 145
Civil Appeal No.2768 of 2023 Page 8 of 17
particular those relating to passing off
apply? An action for passing off, as the
phrase “passing off” itself suggests, is to
restrain the defendant from passing off its
goods or services to the public as that of
the plaintiff's. It is an action not only to
preserve the reputation of the plaintiff but
also to safeguard the public. The defendant
must have sold its goods or offered its
services in a manner which has deceived or
would be likely to deceive the public into
thinking that the defendant's goods or
services are the plaintiff's. The action is
normally available to the owner of a
distinctive trade mark and the person who,
if the word or name is an invented one,
invents and uses it. If two trade rivals
claim to have individually invented the
same mark, then the trader who is able to
establish prior user will succeed. The
question is, as has been aptly put, who
gets these first?
It is not essential for the
plaintiff to prove long user to establish
reputation in a passingoff action. It
would depend upon the volume of sales
and extent of advertisement.
14. The second element that must be
established by a plaintiff in a passingoff
action is misrepresentation by the
defendant to the public. The word
misrepresentation does not mean that the
plaintiff has to prove any mala fide
intention on the part of the defendant. Of
course, if the misrepresentation is
intentional, it might lead to an inference
that the reputation of the plaintiff is such
that it is worth the defendant's while to
cash in on it. An innocent
misrepresentation would be relevant only
Civil Appeal No.2768 of 2023 Page 9 of 17
on the question of the ultimate relief which
would be granted to the plaintiff [ Cadbury
Schweppes v. Pub Squash , 1981 RPC 429 :
(1981) 1 All ER 213 : (1981) 1 WLR 193
(PC); v. , 1980 RPC
Erven Warnink Townend
31 : (1979) 2 All ER 927 : 1979 AC 731
(HL)]. What has to be established is the
likelihood of confusion in the minds of the
public (the word “public” being understood
to mean actual or potential customers or
users) that the goods or services offered by
the defendant are the goods or the services
of the plaintiff. In assessing the likelihood
of such confusion the courts must allow for
the “imperfect recollection of a person of
ordinary memory” [ Aristoc v. Rysta , 1945
AC 68 : (1945) 1 All ER 34 (HL)].
15. The third element of a passingoff
action is loss or the likelihood of it.
”
(emphasis added)
Thus, the volume of sale and the extent of advertisement
made by the appellant of the product in question will be a
relevant consideration for deciding whether the appellant had
acquired a reputation or goodwill.
11. At this stage, we may also refer to the decision of this
4
Court in the case of In
Toyota Jidosha Kabushiki Kaisha .
this decision, this Court approved its earlier view in the case
9
of that the passing
S. Syed Mohideen v. P. Sulochana Bai
off action which is premised on the rights of the prime user
generating goodwill, shall remain unaffected by any
registration provided in the Act. In fact, this Court quoted
9 (2016) 2 SCC 683
Civil Appeal No.2768 of 2023 Page 10 of 17
with approval, the view taken by the House of Lords in the
7
case of Reckitt & Colman Products Ltd. . The said decision
lays down triple tests. One of the tests laid down by the
House of Lords was that the plaintiff in a passingoff action
has to prove that he had acquired a reputation or goodwill
connected with the goods. Thereafter, in paragraph 40 of the
said decision, this Court held that if goodwill or reputation in
a particular jurisdiction is not established by the plaintiff, no
other issue really would need any further examination to
determine the extent of the plaintiff’s right in the action of
passingoff.
12. Coming to the facts of the case, the appellant examined
only two witnesses. The first witness was Mr K.K. Kalani and
the second one was Mr Sudhir Pokhale. Mr Sudhir Pokhale
was examined on an altogether different issue regarding the
approval of labels sought by the respondent. The impugned
judgment contains a list of the exhibited documents produced
by the appellant. Exhibits 73, 73.1 to 73.4 are the statement
of sales as well as advertisement and sale promotion expenses
certified by a Chartered Accountant. However, we find that
the Chartered Accountant was not examined to prove the
statements. In the examinationinchief of Shri K.K. Kalani,
in paragraph 10, only the figures of sales and marketing
expenses have been quoted. Prima facie , it appears to us that
at the time of the final hearing of the suit, it was incumbent
upon the appellantplaintiff to actually prove the figures of
sales and expenditure incurred on the advertising and
Civil Appeal No.2768 of 2023 Page 11 of 17
promotion of the product. Only by producing the statements
without proving the contents thereof, the appellant could not
have established its reputation or goodwill in connection with
the goods in question. According to the witness, the
statements produced were signed by a Chartered Accountant
Mr. Natesh. This aspect surely makes out a case
prima facie
for grant of stay to the execution of the decree in favour of the
respondent as regards the passingoff action.
13. For establishing goodwill of the product, it was
necessary for the appellant to prove not only the figures of
sale of the product but also the expenditure incurred on
promotion and advertisement of the product. Prima facie,
there is no evidence on this aspect. While deciding an
application for a temporary injunction in a suit for passingoff
action, in a given case, the statements of accounts signed by
the Chartered Accountant of the plaintiff indicating the
expenses incurred on advertisement and promotion and
figures of sales may constitute a material which can be
considered for examining whether a prima facie case was
made out by the appellantplaintiff. However, at the time of
the final hearing of the suit, the figures must be proved in a
manner known to law.
14. Even assuming that the allegation of deceptive similarity
in the labels used by the respondent was established by the
appellant, one of the three elements which the appellant was
required to prove, has not been proved. Therefore, we find
Civil Appeal No.2768 of 2023 Page 12 of 17
that the High Court was justified in staying that particular
part of the decree of the Trial Court by which injunction was
granted for the action of passingoff.
15. Now, we come to the infringement of copyright. It is a
well settled law that acquiescence is a defence available in
action for the infringement of copyright. On this behalf, it is
necessary to refer to the decision of this Court in the case of
M/s. Power Control Appliances & Ors. v. Sumeet
10
Machines Pvt. Ltd. . In paragraph 26 onwards, this Court
has discussed the concept of acquiescence. This Court held
that if the acquiescence in infringement amounts to consent,
it will be a complete defence. This Court also observed that
acquiescence is a course of conduct inconsistent with the
claim for exclusive rights and it applies to positive acts and
not merely silence or inaction such as is involved in laches.
This Court observed that mere negligence is not sufficient. In
his crossexamination, the witness–Mr. K.K. Kalani admitted
that as his business was of selling country liquor, his
representative regularly used to visit the office of the
Commissioner of Excise at least once a month. He admitted
that he collected information from his representative who
visited the office of the Commissioner of Excise and tried to
obtain the status of permission proceedings for the approval
of the labels initiated by the respondent. In paragraph 28, he
accepted that in March 2016, the respondent applied to the
Commissioner, State Excise for permission to use ‘Two Punch
10 1994 (2) SCC 448
Civil Appeal No.2768 of 2023 Page 13 of 17
Premium’ labels. In paragraph 29, he admitted that the
appellant had taken objection to these labels. He accepted
that the appellant had withdrawn the said objection. Though
he claimed that the objection was not withdrawn
unconditionally, he accepted that in the letters of withdrawal
of the objection, it is not mentioned that the withdrawal was
conditional. In fact, in paragraph 30, he admitted that the
three objections were withdrawn by the appellant. The
witness, however, volunteered to state that it was a
conditional withdrawal. When the witness was confronted
with copies of the letters of withdrawal of the objection, he
accepted that it is not written therein that the withdrawal was
conditional. He stated that it was also not mentioned that the
withdrawal was unconditional. He stated that the authorities
were orally informed that the withdrawal was conditional.
16. In the facts of the case, it appears that when permission
was sought by the respondent to use the impugned labels, the
appellant raised objections in writing to the grant of
permission to the respondent to use the said labels. It is not
as if those objections were not pursued, but there was a
positive act on the part of the appellant of withdrawing the
said objections by submitting the letters of withdrawal in
which, admittedly, it was not mentioned that the withdrawal
was conditional. This important factual aspect supports the
order of stay granted by the High Court as regards the decree
in respect of the infringement of copyright. The objections
th
were withdrawn on 25 April 2016 and the suit was filed on
Civil Appeal No.2768 of 2023 Page 14 of 17
th
4 October 2017. A prima facie case of acquiescence by the
appellant was made out by the respondent.
17. Therefore, it is very difficult to find fault with the
impugned interim order of the High Court which will be
operative till the disposal of the substantive appeal preferred
by the respondent.
18. Before we part with the judgment, we cannot refrain
from recording certain disturbing features about the conduct
of a member of the Bar while the trial was being conducted in
this case. During the course of the crossexamination of the
witness–Mr K.K. Kalani by the appellant, the following portion
has been recorded by the learned Trial Judge:
“ .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. .. ..
Ld.Adv.Mr.XXX (name masked) for
plaintiffs is taking objections for each
and every question while noting down
the same also his objection continues.
In this way series of objections taken by
him is going on. Every time it is not
possible for the Court to record each and
every objection, therefore, the Court has
adopted the procedure to record at
important place, the question put to the
witness and answer given by him, in
questionanswer manner as it is. Even
then Ld.Adv. Shri XXX (name masked)
continued objecting the questions. In this
background Ld. Adv. Shri XXX (name
masked) is requested to listen carefully
the question put up to the witness and
thereafter to carefully listen to answer
Civil Appeal No.2768 of 2023 Page 15 of 17
given by the witness. Even then if the
witness is confused, he should state about
the same to the Court. However, no such
confusion appears on the part of witness,
therefore, the objections of Ld. Adv. Shri
XXX (name masked) that the question
should be clearly put up to the witness, are
not relevant. Ld. Adv. Shri XXX (name
masked) shall not raise such objection
henceforth. As frequency of his taking
objections is increased, the Court finds it to
be noted as such .. .. .. .. .. .. .. .. .. .. .. .. ..
.. .. .. .. .. .. .. .. .. ”
(emphasis added)
19. If we peruse the data available on the National Judicial
Data Grid, we find that there is a huge pendency of suits in
the Trial Courts in the State of Maharashtra. If the members
of the Bar do not cooperate with the Trial Courts, it will be
very difficult for our Courts to deal with the huge arrears.
While a trial is being conducted, the members of the Bar are
expected to act as officers of the Court. They are expected to
conduct themselves in a reasonable and fair manner. The
members of the Bar must remember that fairness is a
hallmark of great advocacy. If the advocates start objecting to
every question asked in the crossexamination, the trial
cannot go on smoothly. The trial gets delayed. In the facts of
the case, looking at the persistent objections raised by the
learned advocate, the Court was required to record a
substantial part of the crossexamination in questionand
answer form which consumed a lot of time of the Court.
Civil Appeal No.2768 of 2023 Page 16 of 17
20. To conclude, the High Court was justified in granting
the order of stay pending the final disposal of the appeal. The
appeal is, accordingly, dismissed. However, we clarify that
when the High Court decides the pending appeal, it will not
be influenced by the observations made in the impugned
judgment as well as the observations made in this judgment.
The appeal shall be decided on its own merits. There will be
no order as to costs.
….…………………….J.
(Abhay S. Oka)
…..…………………...J.
(Rajesh Bindal)
New Delhi;
September 14, 2023.
Civil Appeal No.2768 of 2023 Page 17 of 17