Holding

The Supreme Court held that the passing‑off test must consider multiple factors, and while the interim injunction remains in effect, the respondents cannot initiate further action on the mark without leave of the trial court, with the suit to be disposed of promptly.

Summary

The respondents, Nirma Chemicals Works Ltd., owned the registered trademarks "NIRMA" and "NIMA" for soaps, detergents and other consumer items. The appellants, Bhavnesh Mohanlal Amin and others, began using the mark "NIMA" for electric flour mills (Class 7) and were served notice to cease. The respondents filed a suit for declaration and permanent injunction; the trial court granted an ad interim injunction, which the Gujarat High Court upheld. On appeal, the Supreme Court examined whether a passing‑off action could arise despite the parties dealing in different classes of goods, applying the factors laid down in Cadila Healthcare Ltd. v. Cadila Pharmaceuticals Ltd. The Court varied the interim order, allowing the High Court order to operate but prohibiting the respondents from initiating any further action on the mark without leave of the trial court, and directed the trial court to dispose of the suit expeditiously. The appeal was disposed of without any order as to costs.

Issues considered

Whether a passing‑off action is maintainable when the plaintiff and defendant deal in different classes of goods.
Whether the similarity of the marks "NIRMA" and "NIMA" creates a likelihood of confusion sufficient for infringement.
Whether the respondents have a bar of jurisdiction under Section 111 of the Trade and Merchandise Marks Act, 1958 (now Section 124 of the Trade Marks Act, 1999).
Whether the ad interim injunction granted by the trial court should be varied or vacated.

Legislation cited

Code of Civil Procedure, 1908s. Order XXXIX Rules 1 & 2
Trade and Merchandise Marks Act, 1958s. 111
Trade Marks Act, 1999s. 124

Subjects

trademark infringementpassing offinterim injunctionprior user rightslikelihood of confusionjurisdictionSection 111Section 124

Judgment

A BHA VNESH MOHANLAL AMIN AND ANR.
v.
NIRMA CHEMICALS WORKS LTD. AND ANR.

NOVEMBER ,7. 2005

B [ARIJITPASAYAT ANDC.K. THAKKER,JJ.]

Trade Marks:

Trade and Merchandise Marks Act, 1958-Section /I /-Trade Marks
C Act, 1999-Section 124-Passing off-Respondents owned the trademarks
"NIRMA" and "NJMA "-NIRMA in respect of soaps and detergents and
"NJMA" in respect of spices, match boxes and other consumer items-On
appellants using the trademark "NJMA" for their flour mills, respondents
filed suit for declaration and permanent injunction against them-Trial Court
D granted ad-interim injunction restraining the appellants from using the trade
mark "NIMA "-High Court upheld the order-On appeal, Held:- In the
peculiar circumstances, it would be desirable to vary the interim order to the
extent that there shall not be stay of operation of the High Court's order-
However without leave of the Trial Court the respondents shall not initiate
any action for user of the mark "NIMA" by the appellants till disposal of the
E suit-Trial Court directed to expeditiously dispose of the suit-Code of Civil
Procedure, 1908-0rder XXXIX, Rules I & 2.

Respondents owned the registered trademarks "NIRMA" and "NIMA'',
NIRMA in respect of soaps and detergents and "NIMA" in respect of spices,
F match boxes and other consumer items. On appellants using the trademark
"NIMA" for their flour mills, the respondents served notice upon the
appellants alleging that by using the word "NIMA" they were creating
confusion and deception in the mind of general public because the word
"NIMA" was identi~l and deceptively similar to the Respondents' very popular
trade mark "NIRMA". However the appellants declined to stop using the word
G "NIMA" for their products, whereupon the Respondents filed a civil suit for
declaration and permanent injunction against the Appellants. Trial Court
granted ad-interim injunction restraining the appellants from manufacturing
and marketing their flour mills by using the word "NIMA" till final disposal
of the suit. High Court upheld the order.

H 12
BHA VNESH MOHANLAL AMIN ''- NIRMA CHEMICALS WORKS LTD. I3
In appeal to this Court it was contended that the High Court erred in A
upholding the order of restraining appellants from using the mark "NIMA"
as the action of passing-off was immaterial when the appellants and the
respondents dealt with completely different class of goods with different prices
and customers.

Disposing of the appeal, the Court B
HELD: 1. In order to decide an action of passing off on the basis of
unregistered trade mark, factors like nature of the marks i.e. whether the
marks are word marks or label marks, the degree of resembleness between
the marks phonetically similar and hence similar in idea, the nature of the
goods in respect of which they are used as trade marks, the similarity in the C
nature, character and performance of the goods of the rival traders, the class
of purchasers who are likely to buy the goods bearing the marks they require,
the mode of purchasing the goods or placing orders for the goods and any
other surrounding circumstances which may be relevant in the extent of
dissimilarity between the competing marks are to be considered. (18-B-C] D
Cadila Healthcare Ltd. v. Cadila Pharmaceuticals Ltd., JT (2001) 4 SC
243, relied on.

2. Both the parties agreed that an early disposal of the matter would be
in their interest. The appellants fairly stated that the question relating to bar
of jurisdiction in terms of Section 111 of the Trade and Merchandise Marks E
Act, 1958 corresponding to Section 124 of the Trade Marks Act, 1999 shall
not be raised and the Trial Court would be free to proceed with the suit. In the
aforesaid background the Trial Court is directed to dispose of the suit as early
as practicable preferably by the end of January, 2096. In the peculiar
circumstances, it would be desirable to vary the interim order to the extent F
that there shall not be stay of operation of the High Court's order but without
leave of the Trial Court the respondents shall not initiate any action for user
of the mark NIMA by the appellants till disposal of the suit.
[19-E, F, H; 20-BJ

Mahendra & Mahendra Paper Mills Ltd v. Mahindra & Mahindra Ltd., G
AIR (2002) SC 117 and Satyam lnfoway Ltd v. Sifynet Solutions (P) Ltd [2004)
6 sec 145, referred to.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 6622 of 2005.

From the Judgment and Order dated 9.5.2005 of the Gujarat High Court H
14 SUPREME COURT REPORTS [2005) SUPP. 5 S.C.R.

A in Appeal From Order No. 90 of 2000.
Dr. Rajiv Dhavan, Ms. Pratibha M. Singh, Sunil Fernandes, Saurabh
Mishra, Pathik Acharya and Maninder Singh for the Appellants.

Dushyant Dave, Ramesh Singh, P. Venugopal and Ms. Surekha Raman
B for Mis. K.J. John & Co. for the Respondents.
The Judgment of the Court was delivered by

ARIJIT PASAYAT, J. Leave granted.

C Challenge in this appeal is to the legality of the judgment rendered by
a learned Single Judge of the Gujarat High Court upholding the order passed
by City Civil Judge, Ahmedabad in Suit No.1952/1999 granting ad interim
injunction restraining the appellants from using the mark "NIMA".

The background facts giving rise to the appeal essentially are as follows:
D
The respondents~original plaintiffs filed civil suit no.195211999 for a
declaration and permanent injunction, projecting the factual position as
follows:-

The plaintiff no. I is a Company incorporated under the provisions of
E the Companies Act, 1956 and plaintiff no.2 is a Trust registered under the
provisions of the Indian Trust Act, 1882. Plaintiff no. I is the owner and
proprietor of the trade mark NIRMA and the same trade mark has been
assigned in favour of plaintiff no. I by way of assignment deed. The a5signment
deed is filed for registration under the provisions of the Trade Marks Act,
F 1999 (in short the 'Act') and plaintiff no. I is engaged in the business of
manufacturing and marketing various consumer products in India and
elsewhere.

The plaintiffs predecessor-in-title started manufacturing and marketing
detergent powder, detergent cake and other products in India and elsewhere.
G The word NIRMA has been coined and invented from the name ofNIRUPAMA,
daughter of Smt. Shantaben K. Patel, a partner of the said partnership firm and
as such trade mark NIRMA has been registered. The same is continuously
used in various packing materials for different products i.e. soap, detergent
powder, detergent cake, cleaning preparations, etc.

H Trade mark "NIMA" is also used and got registered under the. Act in
BHAVNESH MOHAN LAL AMIN v. NIRMA CHEMICALS WORKS LTD. [PASA YAT, J.J} 5

respect of various classes like spices, match box and other consumer items. A
Plaintiffs products are sold throughout India and the name NIRMA has
acquired reputation and goodwill in the market. The plaintiffs have applied for
registration of similar names NIRMAL, NIMA and also applied for exclusive
right to use of the said words. Plaintiffs have got registration of mark NIMA.
The plaintiff no. I is registered at Registration No.422839 in respect of the B
goods covered in Class 7 and, therefore, the use of the same or any other
identical or deceptively similar name by any other person, more particularly
by the defendants amounts to infringement to the plaintiffs trade marks.
Trade mark NIMA is also registered bearing Registration No.396185/B of 1982.

lt is alleged that the appellants-defendants have adopted and started C
using the word NIMA for their product flour mills. Therefore, Notice was
served on 22.9.1998 calling upon the defendants to stop using the trade mark
NIMA. The defendants replied to the Notice on 7.10.1998. Again, another
notice was served to which there was no reply. According to the plaintiffs,
by using the word NIMA the defendants are creating confusion and deception
in the mind of general public because the word NIMA is identical and D
deceptively similar to the plaintiff no.l's very popular trade mark NIRMA.
However, the defendants declined to stop using the word NIMA for their
products. Under these circumstances, the plaintiffs filed the aforesaid Civil
Suit.

The trial Court after hearing the parties passed an order on 11.2.2000, E
whereby the appellants were restrained by an order of temporary injunction
from manufacturing and marketing their products i.e. flour mills (Ghar Ghanti)
by using the word NIMA till hearing and final disposal of the suit.

Against the aforesaid order the appeal was filed before the Gujarat High F
Court by the original defendants. As noted above the High Court dismissed
the appeal.

The High Court referred to several decisions of this Court and various
High Courts and held that the trial Court was justified in granting ad interim
injunction in favour of the plaintiffs. It came to the following findings: G
"From th.e above discussions, it is clearly established that the plaintiffs
have statutory rights since they have registration of the trade marks
NIRMA and NIMA. If injunction was not granted in favour of the
plaintiffs, it would have amounted to infringement of the trade mark
of the plaintiffs. The trial Court has rightly concluded that if the H
16 SUPREME COURT REPORTS [2005) SUPP. 5 S.C.R.

A defendants were restrained from using the mark NIMA, it would not
cause any irreparable loss to the defendants since the defendants had
entered the market only before a couple of years, whereas against
that, the plaintiffs were doing business with the said marks since the
last two decades. Moreover, the total turnover of the plaintiffs is more
than 900 crores and average annual budget for advertisement is about
B 11-12 crores. Therefore, if the defendants are not restrained from
using the said mark, it would cause irreparable loss to the business,
reputation, goodwill etc. of the plaintiffs. As said above, if the
defendants are aggrieved by the presence of the said mark on the
register, the only course available to them is to prefer rectification
c application before the appropriate authority in order to get the said
mark scored off of the register."

In the present appeal the primary stands of the appellants are as follows:

"Appellant No. I is a firm inter alia engaged in the manufacturing,
D marketing and selling of electric flour mill (Ghar Ghanti) since 12.4.1997.
The application dated 29.10.1998 w.e.f. 12.4.1997 for registration of the
mark "NIMA" filed by the appellants is pending before the Trademarks
Registry, Ahmedabad in respect of products under class 7 being
machines and machine tools, motors (except for land vehicles), machine
coupling other than belting (except for land vehicles).
E
The respondents, on the other hand, are owners of registered
trademark "NIRMA" for goods under Class 3 being washing soaps
and detergents in the form of powder, cake or bar (not for use in
industrial or manufacturing processes), cleaning powder. They hold a
trade mark "NIRMA" in respect of goods under Class 7 since 25.6.1984.
F The respondents herein according to appellants have never used the
trademark "NIRMA" for the goods falling under Class 7 for last more
than two decades.

The goods falling under Class 7 are as under:-

G Class 7:- Machines and machine tools; motors and engines (except
for land vehicles); machine coupling and transmission components
(except for land vehicles) agricultural implements other than hand
operated; incubator for eggs.

Respondents also hold a registered trademark with respect to
H mark "NIMA" since 8.10.1982 with respect to goods under Class 3.
BHA VNESH MOHAN LAL AMIN ''· NIRMA CHEMICALS WORKS LTD. [PASAYA T, J.] 17

The goods falling under Class 3 are as under:- A
Class 3:- Bleaching preparations and other substances for laundry
use; cleaning, polishing; scouring and abrasive preparations;
soaps. perfumery, essential oils, cosmetics, hair lotion, dentrifices.

The respondents got registered trademark with respect to mark "NIMA" B
under Class 7 goods on 20.12.2004 w.e.f. 15.10.1998 i.e. subsequent to
the date from which the appellants have been using the mark "NIMA"
for manufacturing and selling electric flour mill which falls under Class
7. With respect to mark "NIMA" the appellants herein are a prior user
for goods falling under Class 7. In any case, the respondents have not
used the mark "NIMA" or "NIRMA" for goods or products under C
Class 7 till date."

Learned counsel for the appellants has further submitted that the High
Court erred in upholding the order of restraining appellants from using mark
"NIMA" as the action of passing of is immaterial when the case of the parties
are different, their trade channels are different or prices are different. It was D
poipted out that the appellants had prior user in respect of the mark NIMA
for goods under Class 7 of the Act. It was further submitted that the appellants
and the respondents dealt with completely different Class of goods with
different prices and customers and, therefore, ad interim injunction should not
have been granted. The trademark NIMA was resisted only in respect to the E
goods under Class 7 at the relevant time and, therefore, the High Court should
not have extended the protection with respect to goods falling under
Class 7.

In response, learned counsel for the respondent submitted that goodwill
generated by the respondents by huge investments is intended to be exploited F
by the appellants by using deceptively similar names. It is a clear case of
passing off. It was pointed out that as the phrase 'passing off' itself suggests
in an action of 'passing off' is to restrain the defendant from passing off its
goods or service to the public as the plaintiffs. It is an action not only to
preserve the reputation of the plaintiff but also to safeguard the public. With
respect to decisions of this Court in Mahendra & Mahendra Paper Mills Ltd. G
v. Mahindra & Mahindra Ltd, AIR (2002) SC 117 and Satyam lnfoway Ltd
v. Sifynet Solutions (P) Ltd, [2004] 6 SCC 145 and the large number of other
decisions it was submitted that the ad interim injunction was granted by the
trial Court on proper consideration of relevant aspects. It is submitted that
the High Court was justified in upholding the order of ad interim injunction H
18 SUPREME COURT REPORTS (2005] SUPP. 5 S.C.R.
.;

A after analysing the legal position in detail, and keeping in view the jurisdiction '
of appellate Courts in such matters.

In Cadila Healthcare Ltd v. Cadila Pharmaceuticals Ltd., JT (2001) 4
SC 243, this Court laid down certain factors in order to decide an action of
passing off on_ the basis of unregistered trade mark. It has held that factors
B like nature of the marks i.e. whether the marks are word marks or label marks,
the degree of resembleness between the marks phonetically similar and hence
similar in idea, the nature of the goods in respect of which they are used as
trade marks, the similarity in the nature, character and performance of the
goods of the rival traders, the class of purchasers who are likely to buy the
C goods bearing the marks they require, the mode of purchasing the goods or
placing orders for the goods and any other surrounding circumstances which
may be relevant in the extent of dissimilarity between the competing marks
are to be considered.

In Mahendra & Mahendra, case (supra) it was observed as follows:
D
" ........ the name has acquired a distinctiveness and a secondary
meaning in the business or trade circles. People have come associate
the name "Mahindra" with a certain standard of goods and services.
Any attempt by another person to use the name in business and trade
circles is likely to and in probability will create an impression of a
E connection with the plaintiffs' group of companies. Such user may
also effect the plaintiff prejudicially in its business and trading
activities."

In Satyam lnfoway Ltd., case (supra) it was held that to establish an
action of passing off three elements are needed to be established. They are
F as follows:

"(a) The first eleqient in 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
G 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 plaintiffs. (b) The second element that must be
established by the plaintiff is misrepresentation by the defendant to
H the public and what has to,be established is the likelihood of confusion
BHA VNESH MOHAN LAL AMIN 1·. NIRMA CHEMICALS WORKS LTD. [PASA VAT, J.] 19

.in the minds of the public that the goods or services offered by the A
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". (c) The third
element of a passing off action is loss or the likelihood of it."

We find that it would not be proper to go into the legal position to be B
applied to the factual background in detail. The High Court noted and directed
as follows:

"However, since the suit in question is of the year 1999, the City
Civil Court, Ahmedabad, is directed to expedite its hearing and ·to
dispose it of within a period of six months, if it is already ripe for C
hearing; otherwise, within a period of two years from the receipt of
writ of this order. Office is directed to send writ of this order forthwith.
With the above observations and directions, this appeal from order
stands disposed of. Interim relief granted earlier stands vacated. No
order as to costs." D
It is pointed out by learned counsel for the respondents that since the
appellants have moved for action in terms of Section 111 of the Trade and
Merchandise Marks Act, 1958 (in short the 'Old Act') corresponding to
Section 124 of the Act there is no scope for proceeding in the suit further.
Learned counsel for the parties agreed that an early disposal of the matter E
would be in the interest of the parties. Learned counsel for the appellants
fairly stated that the question relating to bar of jurisdiction in terms of Section
111 of the Old Act corresponding to Section 124 of the New Act shall not
be raised and the trial Court would be free to proceed with the suit.

In the aforesaid background we direct the trial Court to dispose of the F
suit as early as practicable preferably by the end of January, 2006. Residual
question is whether as contended by learned counsel for the appellants the
protection given by the High Court while disposing of the appeal and extended
by this Court initially by orders dated 27.5.2005 and 13.7.2005 should be
continued as the conclusions of the trial Court as affirmed by the High Court G
are erroneous in law and the appellants have a fair chance of success in the
suit. On the other hand, it was pointed out by learned counsel for the
respondents that the respondents have succeeded before two courts and the
correct position in law has been kept in view.

On the peculiar circumstances, we feel it would be desirable to vary the H
20 SUPREME COURT REPORTS [2005] SUPP. 5 S.C.R.

A interim order to the extent that there shall not be stay of operation of the High
Court's order but without leave of the trial Court the respondents shall not
initiate any action for user of the mark NIMA by the appellants till the
disposal of the suit.

The appeal is disposed of without any order as to costs.
B
8.B.8. Appeal disposed of.

,,.
)