Holding

The respondents' use of the registered trademark "Ramdev" for their own spice products exceeds the limited licence granted by the MOU and amounts to infringement, warranting a permanent injunction restraining such use.

Summary

Ramdev Food Products Pvt. Ltd., the registered proprietor of the trademark "Ramdev", sued its former family partners who were operating under the name "Ramdev Masala" for infringing its mark by manufacturing and selling spices under that name. The parties had earlier entered into a user agreement and a Memorandum of Understanding (MOU) that allowed the respondents to use the mark only for retail sale of the appellant's products in seven specified outlets, with a "not for resale" label. The trial court and High Court issued a limited injunction, but the High Court relaxed the restriction on label use. The Supreme Court held that the respondents' use of the mark for their own manufactured products exceeded the limited licence granted by the MOU and constituted infringement under the Trade Marks Act, 1958. It affirmed the trial court’s injunction restraining the respondents from using the mark in any product, while permitting them to continue manufacturing under a different brand. The Court also clarified the interpretation of the MOU, the inapplicability of Sections 15 and 17, and the burden of proof on the defendants. The appeals were allowed and costs awarded to the appellant.

Issues considered

The extent of the respondents' right to use the "Ramdev" trademark under the user agreement and MOU.
Whether the respondents' use of the mark for their own manufactured spices infringes the Trade Marks Act, 1958.
Whether Sections 15 and 17 of the Trade Marks Act bar the appellant's claim of infringement.
The applicability of defenses of waiver, estoppel and acquiescence raised by the respondents.
The proper basis for granting an interlocutory injunction in a trademark infringement action.
The effect of the non‑obstante clause in Section 30(1)(b) of the Trade Marks Act.

Legislation cited

Companies Act, 1956
Prevention of Food Adulteration Act, 1955
Registration Act, 1908
Trade and Merchandise Marks Act, 1958s. 15, s. 17, s. 20, s. 28, s. 29, s. 2(d), s. 30(1)(b), s. 33, s. 48, s. 49

Subjects

trademark infringementMOU interpretationpassing offnon‑obstante clauseinterlocutory injunctionexclusive rightswaiverestoppelgoodwillTrade Marks Act 1958

Judgment

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

AUGUST 29, 2006

[S.B. SINHA AND P.P. NAOLEKAR, JJ.] B

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 C
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 of trade
mark by thefinn questioned as infringement of trade mark by the Company-
Suit-Trial Court restrained the firm from using the trade mark by temporary D
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 E
trademark-Firm had only a limited right under the MOU-Grant of
trademark 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-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 F
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 G
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.

521 H
..
522 SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R.

A Interpretation ofStatutes-Interpretation of non-obstante clause-Held:
The interpretative process of a 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
B 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 of proprietor of trade
mark only loss of goodwill and reputation to fulfil the condition of irreparable
injury is necessary-In such case delay by itself may not be a ground for
C 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.
D
Doctrines/Principles: Doctrine of Passing Offand Doctrine of Waiver-
Meaning of .

Principle of Estoppel and Principle of Acquiscence-Applicability of

E Jurisdiction-Jurisdiction of appellate Court-To interfere with order
of interlocut01y injunction-Held: Usually appellate court should not interfere
with such order as the same is in exercise of discretionary jurisdiction of trial
-
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 of law regulating grant or refusal of interlocutory
F 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
G of'Ramdev' was being run by three brothers through the appellant-company.
A 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.
H Still another partnership under the name 'Ramdev Exports' was to export the
RAMDEV FOOD PRODUCTS PVT.LTD. v. ARVINDBHAI RAMBHAI PATEL 523
spices manufactured by the appellant-company. On disputes between the A
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 B
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 C
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 D
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 E
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
of MOU, 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'. F
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 G
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 H
524 SUPREME COURT REPORTS (2006) SUPP. 5 S.C.R.

A 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

B HELD: 1.1. In this case the courts below proceeded on a prima facie
misconstruction of documents. 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
C 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
D 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,
E 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(

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
G 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
H 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 FOOD PRODUCTS PVT. LTD. v. ARV!NDBHA! RAMBHA! PATEL 525
use of the goodwill and reputation built up and associated with the mark. A
(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 B
sec 545, referred to.
The Modern law of Trade Marks by Christopher Morcom, Butterworths,
(1999), referred to.

1.5. A trade mark is the property of the manufacturer. The purpose of C
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 D
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 of the registered trade mark. Registration of trade marks is envisaged E
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 of such use by any person other than the
person in whose name the trade mark is registered, he will have a statutory F
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 G
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 H
526 SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R.

A 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 Off and Franchising by V.A. Mohta, pp. 12 and
B 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, prima facie, the
C 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
D 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
E 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
F 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
G 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.

H 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 A
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 B
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
c
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) D
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 E
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 F
and Union of India 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 G
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 of Consolidation and Ors.,
[1976] 3 SCC II9 and Hari Shankar Singhania and Ors. v. Gaur Hari H
Singhania and Ors., JT (2006) 4 SC 251, relied on.
528 SUPREME COURT REPORTS (2006] SUPP. 5 S.C.R.

A 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
B 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
C 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 of U. P. and Ors., (2006) 5 SCALE
107, referred to.
D
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
E 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 of Trade Marks v. Ashok Chandra Rankhit Ltd., (19551 2
F 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
G 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)
H
RAMO EV FOOD PRODUCTS PVT. LTD. v. AR VlNDBHAI RA MB HAI PATEL 529

of the 1958 Act, would be a mark ifit nearly resembles that other mark as to A
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 of Section 28 of the 1958 Act although
is required to be read with Sections 15 and 17 thereof but it is difficult to B
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 of Section 28 of the C
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 of the said MOU. The cut off date for determining
the respective rights of the parties would, thus, be the date when MOU came D
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 of Section
30(l)(b) thereof. [564-A-B)

Amteshwar Anand v. Virender Mohan Singh and Ors., (2006) 1 SCC E
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 · F
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.
G
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 H
530 SUPREME COURT REPORTS [2006) SUPP. 5 S.C.R.

A 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,
B 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
C 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. and Anr., AIR
(1993) Bombay 237 and De Cordova and Ors. v. Vick Chemical Co., (1951)
D 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
E more than loss of goodwill 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 '
F 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.

G 5.2. Registration of a trade mark and user thereof per 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
G Court is satisfied that the appellant has been able to establish existence of a
RAMDEV FOOD PRODUCTS PVT LTD. v. ARVINDBHAI RAMBHAI PATEL 53 J
legal right in itself and violation of the registered trade mark on the part of A
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 B
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 of A.P. Ltd. v. Mis. lanco Kondapalli Power Pvt. C
Ltd., JT (2005) I 0 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 D
injunction is in exercise of discretionary 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 E
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. F
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. G
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 facefof delay. The principle of acquiescence would H
532 SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R.

A 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
B 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::
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
D act on the part of the 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 of acquiescence on the part of the 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
E 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.
F 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
G 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.
H 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. A
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
B
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,
c
Unmesh Shukla, Janak Shah, Nitin Mehta, Manu Krishnan and E.C. Agrawala
for the Respondents.

The Judgment of the Court delivered by
D
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 E
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 F
two daughters, Arvindbhai, Hasmukhbhai and Pravinbhai were his sons. A ·
partnership firm was constituted in the year 1975. It applied for registration
of the trademark 'Ramdev', which was granted on 03.01.1986 being Trademark
No.44 7700. Another partnership deed was executed in supersession of the
earlier partnership deed wherein new partners were inducted. On 06.01.1989, G
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 of the 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 H
534 SUPREME COURT REPORTS (2006) SUPP. 5 S.C.R.

A 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
B 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
C 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;

D 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
E 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,.
F 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
G 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.

H 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 B
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 C
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. D
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
E
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.
F
LEGAL PROCEEDINGS

- 7
. On the premise that the respondents had been infringing its rights,
· ·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 : G
"(A) The defendants by themselves, their servants, agents, partners
and all persons claiming through or under them be restrained by a
perpetual order of this Hon'ble Court from, in any manner, using the
trade mark 'RAMDEV' in their label, packing materials, advertising
H
536 SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R.

A materials, business materials etc., in respect of goods 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. 44 7700 and other marks bearing
No.531084, 531085, 545253, 545253, 545255, 545257 and 545258."
B
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
c 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 of goods which
are covered under registration of the plaintiffs mark and/or any mark
which may be identical and/or deceptively similar to the plaintiffs
D 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
E 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
F 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.

G 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'
H
RA MD EV FOOD PRODUCTS PVT. LTD. 1: ARVJNDBHA! RA MB HAI PATEL [S. B S!NHA,J] 53 7

apart from the label as a whole. (Sections 15 and 17 issue) A
(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, B
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 C
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'.
D
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 E
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. F
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 .....
G
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
H
538 SUPREME COURT REPORTS [2006) SUPP. 5 S.C.R.

A 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
B 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".

C 21 ..... Therefore, he cannot sell spices in other shops under the trade-
mark "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
D also held to be deceptively similar to the trade-mark "Ramdev" of the 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
E 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
F 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
G 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 A
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 : B
"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 C
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 D
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 : E
"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 F
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 G
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 H
540 SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R.

A 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".

B 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
C 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.
D 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.
E
(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.
F (iv) Even if the MOU is kept out of consideration in view of the 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
G 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
H 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.J 541

4 l(iii), opined: A
"42.3 However, finding in paragraph 41 (iii) of the 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 B
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 C
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
D
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 E
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 F
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 G
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 of the 1958 Act vis-a-vis Prevention
of Food Adulteration Act and Standards of Weights and Measures H
542 SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R.

A 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
B carry on the existing trade and thereby the respondents were not
pennitted to start manufacturing spices under the name and style
of' Ramdev Masai a' 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
c 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:

D (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 l st June, 1998, the remedies under the Trade
Marks Act are not available against the respondents who were
members of the family.
E (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.
F (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
G clearly barred by Sections 15(1) and 15(2) of the 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
H
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 A
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 B
respondents, they wou Id 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 c
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. D
(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 E
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 F
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
G
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
H
544 SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R.

A 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
B 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
c
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:
D
"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,
E 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 of the Controller-General of Patents,
F 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
G 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
H marks in respect of the same goods or description of goods which,
RAM DEV FOOD PRODUCTS PVT.LTD. 1·. ARVINDBHAI RAMBHAI PATEL [S.B. SINHA.J.J 545

while resembling each other in the material particulars thereof, yet A
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 B
(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 C
in one registration.

17. Registration of trade 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 D
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 E
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 F
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 G
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
H
546 SUPREME COURT REPORTS [2006) SUPP. 5 S.C.R.

A 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:
B
"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
c is registered and to obtain relief in respect of infringement of the trade
mark in the manner provided by this Act.

(2) The exclusive right to the use of a trade mark given under sub-
section (I) shall be subject to any conditions and limitations to which
the registration is subject.
D
(3) Where two or more persons are registered proprietors of trade
marks, which are identical with or nearly resemble each other, the
exclusive right to the use of any of those trade marks shall not (except
so far as their respective rights are subject to any conditions or
limitations entered on the register) be deemed to have been acquired
E 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."
F
Section 29 provides for the consequences of infringement of trade
marks in the following terms:

"29. Infringement of registered trade marks.-(1) A registered trade
mark is infringed by a person who, not being a registered proprietor
of the trade mark or a registered use thereof using by way of permitted
G
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.
H
1
RAMDEVFOODPRODUCTS PVT.LTD."·~. Al RAMBHAI PATEL[S.B. SINHA,J.]547
/~
(2) In an action for infringement if a trade mark registered in Part B A
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 ~ B
mark is registered and ·some person having theI
right, either as registered·
proprietor or as registered user, to. u·se the trade mark."

Section 33 provides for saving of vested rights.

INTERPRETATION OF DEED-PRINCIPLES OF
c
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]
D
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 E
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.
F
6.09 Where the words of a contract are capable of two meanings, one
of which is lawful and the other unlawful, the former construction
should be preferred.

Sir Edward Coke [Co. Litt. 42a] expressed the proposition thus:
G
'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."'

H
548 SUPREME Ce>URT REPORTS [2006] SUPP. 5 S.C.R.

A 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
B 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.

C 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
D
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
E 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
G 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

H 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 A
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 B
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 C
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: D
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<1ring before us proceeded on the basis that MOU for all intent and
purport was a family settlement .. Disputes and differences .having arisen E
between the parties, the said Jly10U was entered into with a view to resolve
the same as regards the business and property held by them so as to enable
them to be in peace, harmony and understanding in the family. The said
settlement was arrived at through th~. mechanism of mediation of the well-
wishers of the family. MOU was, thus, entered into for the purpose of F
distribution of the properties and business and the same was given effect to
on and from 1.4.1998. It stipulates:

(i) Manufacturing and selling of masala (spices) and instant mix was
being done by the Company.
(ii) The goods used to be manufactured i.n a factory situated in G
village Sola. Another factory was constructed on block No. 527,
542 and 528 at Changodar. The Joint family, viz., the Partnership
(Ramdev Masala) had been selling goods in retail in the name of
'Ramdev Masala' to seven outlets named therein.
H
550 SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R.

A (iii) The export business in respect of goods, viz., pepper-spices,
instant mix, groceries and other articles was being done in the
name of Ramdev Exports.

The Trade Mark or trade name which was registered in the name of the
company, viz., Ramdev and its logo of a saint astride on a horse with a
B standard went to the Company. The expression "Ramdev" is written in the
Gujarati language just above the said logo and the word "masala" which is
again in the Gujarati language appears just below the same.

Arvindbhai became the exclusive owner of the busin·ess Ramdev Exports
(Partnership Firm) and Ramdev Masala (another Partnership Firm). MOU
C contained a clarification to the effect that the other two brothers, viz.,
Hasmukhbhai and Pravinbhai became the owners thereof and would carry on
the management of the business of the Company. The two brothers,
Hasmukhbhai and Pravinbhai were given the right to c1my on export business
under the brand name of 'Ramdev' but in a manner which would not cause
D any loss to Arvindbhai or vice-versa. Whereas the land situated at Sola went
to Arvindbhai along with the building, the machineries belonging to the
company remained with the Company. The new factory and machinery also
went to the Company. A right of pre-emption in respect of the trade mark
Ramdev was also created in terms whereof Hasmukhbhai and Pravinbhai were
to offer sale of the said trade mark to Arvindbhai in the event they intend
E to do so. It was, thus, made clear that the manufacturing activities were to
be restricted to the Company through Hasmukhbhai and Pravinbhai.

The two brothers, viz., Hasmukhbhai and Pravinbhai, also had the right
to carry out export busin~ss under the brand name of Ramdev but in a manner
F which would not cause any loss to the eldest brother ·or vice-versa.

We have noticed hereinbefore that the partnership Ramdev Masala had
an user agreement for seven years from 1.4. l 991 which lapsed on 31.3.1998.
MOU came into force with effect from 1.4.1998. By reason of the said MOU
prima facie Arvindbhai had not been given any manufacturing right through
G the user agreement. The trade mark Ramdev, thus, belonged exclusively to the
Company.

Although several trade marks were registered and belonged to the
Company, we are primarily concerned with the trade mark bearing No. 447700
having the aforementioned description.
H
RAMDEV FOOD PRODUCTS PVT. LTD. r. ARVINDBHAI RAMBHAI PATEL (S.B. SINHA,JJ55 J

Both the learned Trial Judge as also the High Court proceeded on the A
basis that in terms of the said MOU, the Company acquired an exclusive right
to use the same.

It is not in dispute that the respondents have been manufacturing
spices under and name and style of 'Swad'. The said mark is a registered one.
B
The Courts below proceeded on the basis that the mark used by the
respondents are deceptively similar to the trade mark registered in favour of
the appellant. There is no dispute in regard to the said findings. We would
hereinafter consider the effect thereof.

TRADE MARK-CONCEPT c
The concept of trade mark dates back to ancient times. Even in tJ:ie
., J:I~an Civilization marks of trade with foreign ,countries such as
Me'sop1lta~ia and Babylonia were found embossed on articles. The law of
trade marks was formalised with the· process of registration which gave
exclusivity to a trader right to deal in goods using a symbol or mark of some D
sort to distinguish his goods from similar goods sold by other traders. Even
today the grant of a trade mark is an indicator of exclusivity in trade under
that mark and this right cannot be transferred. Only a limited right of user can
be granted via licence.
E
In The Modern Law of Trade Marks by Christopher Morcom,
Butterworths I 999, it is stated:

" ... The concept of distinguishing goods or services of the proprietor
from those of others was to be found in the requiremt;nts for a mark
to be registrable. Essentially, whatever the wording used, a trade mark p
or a service mark was an indication which enabled the goods or
services from a particular source to be indentified and thus
distinguished from goods or services from other sources. In adopting
a definition of 'trade mark' which simply describes the function in
terms of capability of 'distinguishing the goods or services of one
undertaking from those of other undertakings' the new law is really G
saying precisely the same thing."

In Gujarat Bottling Co. Ltd. and Ors. v. Coca Cola Co. and Ors., [1995]
5 sec 545, it was held that licensing of trade mark is governed by common
law which is also statutorily permissible provided:
H
552 SUPREME COURT REPORTS (2006) SUPP. 5 S.C.R.

A " ... (i) the licensing does not result in causing confusion or deception
among the public; (ii) it does not destroy the distinctiveness of the
trade mark, that is to say, the trade mark. before the public eye,
continues to distinguish the goods connected with the proprietor of
the mark from those connected with others; and (iii) a connection in
the course of trade consistent with the definition of trade mark continues
B to exist between the goods and the proprietor of the mark ..... "

Making use of another's trade mark is not only a violation of business
ethics but has also been linked to dishonestly making use of the goodwill and
reputation built up and associated with the mark.

c In Laxmikant V. Patel v. Chetanbhai Shah and Anr., [2002] 3 SCC 65,
it was stated:

"10. A person may sell his goods or deliver his services such as
in case of a profession under a trading name or style. With the lapse
of time such business or services associated with a person acquire a
D reputation or goodwill which becomes a property which is protected
by courts. A competitor initiating sale of goods or services in the
same name or by imitating that name results in injury to the business
of one who has the property in that name. The law does not permit
any one to carry on his business in such a way as would persuade
E the customers or clients in believing that the goods or services
belonging to someone else are his or are associated therewith. It does
not matter whether the latter person does so fraudulently or otherwise.
The reasons are two. Firstly, honesty and fair play are, and ought to
be, the basic policies in the world of business. Secondly, when a
person adopts or intends to adopt a name in connection with his
F business or services which already belongs to someone else it results
in confusion and has propensity of diverting the customers and
clients of someone else to himself and thereby resulting in injury~"

PURPOSE OF TRADE MARK
G 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. Section 21 of the 1958 Act provides
H that where an application for registration is filed, the same can be opposed.
RAMDEV FOOD PRODUCTS PVT.LTD. v. ARVlNDBHAI RAMBHAI PATEL [S.B. SINHA, Jp53

Ordinarily under the law and, as noticed hereinbefore, there can only be one A
mark, one source or one proprietor. Ordinarily again right to user of a trade
mark cannot have two origins. The first respondent herein is a rival trader of
the appellant-Company. It did not in law have any rightto use the said trade
mark, save and except by reason of the terms contained in the MOU or
continuous user. It is well-settled that when defences in regard to right of user B
are set up, the onus would be on the person who has taken the said plea.
It is equally well-settled that a person cannot use a mark which would be
deceptively similar to that of the 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 C
also amount to fraud on the public. A proprietor of a registered trade mark
indisputably has a statutory right thereto. In the event of such 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 29 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. D
DIFFERENT FUNCTIONS OF A TRADE MARK

We may now note a few precedents on the function of a trade mark.

In Sumat Prasad Jain v. Sheojanam Prasad (Dead) and Ors. and State E
of Bihar, [ 1973] I SCC 56, this Court held:

" ... Thus, the distinction between a trade mark and a property mark is
that whereas the former denotes the manufacture or quality of the
goods to which it is attached, the latter denotes the ownership in
them. In other words, a trade mark concerns the goods themselves, F
while a property mark concerns the proprietor. A property mark attached
to the movable property of a person remains even if part of such
property goes out of his hands and ceases to be his."

In Canon Kabushiki Kaisha v. Metro-Goldwyn-Mayer Inc., (1999) RPC
117, the European Court of Justice emphasised the test of likelihood of G
confusion in the following terms:

"40. That view is also confirmed by the judgment of the court in
SABEL, in. which it held that the "likelihood of confusion must.. ... be
appreciated globally, taking into account all factors relevant to the H
554 SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R.

A circumstances of the case" (at paragraph 22). It is true that that
statement was made in a different context: the court was there
considering the question whether conceptual similarity of the marks
alone could give rise to confusion within the meaning of Article
4( I )(b ), in a situation in which the goods in question were clearly the

B
-
same. However, the statement is one of general application."

In Baker Hughes Limited v. Hirao KhushaTani, (l998) PTC 18 580, the
question as regards likelihood of confusion even by the· enlightened public
was noticed in the following words :

"Again in Grotrian, Helfferich, Schulz, Th. Steinweg Nachf, a
c Corporation v. Steinway & Sons, a CorpQration, 365 F. Supp. 707
(1973), striking a similar note the Court ~Id as under:
"Plaintiff argues that purchasers will not be confused because of
the degree of their sophistication and the price (B & l Sales
. Associates v. #. Daroff & Sons, Inc., supra, 421 F.2d at 354). It
D ... .....,s true that deliberate buyers of expensive pianos are not as
vulnerable to confusion as to products as hasty buyers of
inexpensive merchandise at a newsstand or drug store [Callmann,
Unfair Competition Trademarks and~polies, (3d ed. 1971)].
The sophistication of buyers, howevtr, does not always assure
E the absence of confusion [Comf,1mications Satellite Corp. v.
Comcet, lnc.>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
F 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.
G
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
H 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 of the opinion A
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 B
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 C
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 D
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 E
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 of circumstances:
(I) where the public confuses the sign and the mark in question
(likelihood of direct confusion); (2) where the public makes a connection G
between the proprietors of the sign and those of the 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 H
556 SUPREME COURT REPORTS [2006) SUPP. 5 S.C.R.

A 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 of association in the
strict sense" (paragraph 17 of the judgment). It concluded: "The terms
B 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
c of Article 4(1 )(b ). "

TRADE MARK AND GOODWILL

Traditionally, a trade mark has always been considered a vital and
D 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
E
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 .
F 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.
G
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 of the appellant and the same
H 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 A
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 B
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; c
(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 D
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 E
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 of the 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 F
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 G
... 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
''
H
558 SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R.

A 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
B 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
C 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
D 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
E 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,
G 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.

H
RAMDEV FOOD PRODUCTS PVT. LTD. r. ARVINDBHAI RAMBHAI PATEL [S.8. SINHAJ] 559

NON-OBSTANTE PROVISIONS A
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) B
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. If an
infringement of trade mark is established, the onus would be on the defendants C
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 D
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 E
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 F
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 G
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 of the parties is a matter which can be considered
H
560 SUPREME COURT REPORTS [2006) SUPP. 5 S.C.R.

A 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
B 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
C 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
D 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
E back in 199 I. If the contention of the Senior Counsel is accepted, the said
purpose would be lost. In a case of this nature, therefore, ordinarily an
injunction would issue.

By reason of interpretation of MOU, trade mark cannot be infringed and
F further when the right of user has been relinquished, the same could not have
been claimed by the respondents.

WAIVER

The matter may be considered from another angle. If the first respondent
G has expressly waived his right on the trade mark registered in the name of the
appellant-Company, could he claim the said right indirectly? The answer to
the said question must be rendered in the negative. It is well-settled that what
cannot be done directly cannot be done indirectly.
-
The term 'Waiver' has been described in the following words:
H ''
RAMDEV FOOD PRODUCTS PVT.LTD. v. ARVINDBHAI RAMBHAI PATEL [S.B. SINHA, J.J56J

•• "Waiver is the abandonment of a right in such a way that the other A
party is entitled to plead the abandonment by way of confession and
avoidance if the right is thereafter asserted, and is either express or
implied from conduct.. .. A person who is entitled to rely on a stipulation,
existing for his benefit alone, in a contract or of a statutory provision
may waive it, and allow the contract or transaction to proceed as B
though the stipulation or provision did not exist. Waiver of this kind
depends upon consent, and the fact that the other party has acted
upon it is sufficient consideration ....

•. It seems that, in general, where .one party has, by his words or
conduct, made to the other a promise or assurance which was intended C
to affect the legal relations between them and to be acted on
accordingly, then, once the other party has taken him at his word and
acted on it, so as to alter his position, the party who gave the promise
or assurance cannot afterwards be allowed to revert to the previous
legal relationship as if no suc.h promise or assurance had been made
by him, but he must accept their legal relations subject to the D
qualification which he has himself so introduced, eve11 though it is
not supported in point of law by any consideration.

[See 16 Halsbury's Laws (4th edn) para 1471]

Waiver may sometimes resemble a form of election, and sometimes be E
based on ordinary principles ofestoppel. [See 45 Halsbury's Laws (4th edn.)
para 1269]

In lndu Shekhar Singh & Ors. v. State of UP. & Ors., (2006) 5 SCALE
I07, this Court held:
F
"They, therefore, exercised their right of option. Once they obtained
entry on the basis of election, they cannot be allowed to turn round
and contend that the conditions are illegal.. .. "

SECTIONS 15 AND 17 ISSUE
G
Section 15 of the 1958 Act postulates registration of the whole and a
part thereof as separate trade marks. The nature of the trade mark of the
appellant has been noticed hereinbefore.

There are three elements in the said trade mark, viz., 'Ramdev', 'Masala'
\,
H
562 SUPREME COURT REPORTS (2006] SUPP. 5 S.C.R.

A and the 'horse'. The deception could be as regard the prominent features of
the said trade mark.

Section 15 of the 1958 Act, in our considered opinion, 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
B mark as also the part thereof separately. Where 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. Sub-
section (3) of Section 15 of the 1958 Act provides for a c~se where the
proprietor of several trade marks claimed registration in respect of the same
C goods or description of the goods which while resemblin_1! each other in the
material particulars thereof yet differ in respect of the -:.atters provided for
therein. We are not, in this case, concerned with such· a legal question.
r
In Ashok Chandra Rakhit ltd. (supra), whereupon reliance has been
placed by Mr. Nariman, this Court was concerned :with a proprietary mark of
D 'Shree'. It was claimed that the mark 'Shree' was a trade mark apart from the
device as a whole and it was an important feature of its device. The respondents
were carrying on business in the name and style of Shree Durga Charan
Rakshit. It was in the peculiar factual background obtaining therein, this
Court, referred to the decision of lord £sher in Pinto v. Badman, [8 RPC 181]
to say that where a distinctive label is registered as a whole such registration
E cannot possibly give any exclusive statutory right to the proprietor of the
trade mark to the use of any particular word or name contained therein apart
from the mark as a whole. This Court in the aforementioned factual backdrop

F
opined:

" ... This, as we have already stated, is not quite correct, for apart from
the practice the Registrar did advert to the other important
consideration, namely, that on the evidence before him and the
-
statement of counsel it was quite clear that the reason for resisting
the disclaimer in this particular case was that the Company thought,
erroneously no doubt but quite seriously, that the registration of the
G trade mark as a whole would, in th€ circumstances of this case, give
it a right to the exclusive use of the word "Shree" as if separately and
by itself it was also its registered trade mark and that it would be
easier for it to be successfitl in an infringement action than in a
passing off action. It was precisely the possibility of such an
extravagant and untenable claim that called for a disclaimer for the
H
RAMDEV FOOD PRODUCTS PVT. LTD. r. ARVINDBHAI RAMBHAI PATEL [S.B. SINHA.J.1563

purpose of defining the rights of the respondent company under the A
registration .... T"

(Emphasis supplied)

The said decision has no application to the fact of this case.
B
- Mr. Narirrian is also not correct in contending that only a label has been
registered and not the name 'Ramdev'. Definition of 'mark' as contained in
Section 20) of the 1958 Act also includes name, signature, etc.

SECTION 29 ISSUE

Section 28 of the 1958 Act confers the right of registration whereas
c
Section 29 thereof 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) of the 1958 Act,
would be a mark if it nearly resembles that other mark as to be likely to deceive D
or cause confusion. It is, therefore, not a case where the respondents could
raise valid defence in terms of Section 29 of th_e 1958 Act.

The right conferred in terms of Section 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 E
28 of the 1958 Act confers an exclusi:'(e right of using trade mark a person
who has got the trade mark registered in his name. Such right is, thus,
absolute. Sub-section (3) of Section 28 raises a legal fiction for the purposes
specified therein but we are not concerned therewith in the instant case. Sub-
section (2) of Section 29 inter alia provides for the defences. p

- We may not in this case go into the question as to whether it was
essential having regard to the provisions contained in the MOU that the user
agreement should have been registered in terms of Section 49 of the 1958 Act
as was opined by the High Court. But, we_ have no doubt in our mind that
the user agreement having come to an end on 31st March, 1998, i.e., on the G
expiry of seven years fn;im the date of execution, the respondents could no
more claim any right thereunder. The user agreement was valid from 01.04.1991
to 31.03.1998. The MOU came into force from 1.4.1998. The right to user has
not been conveyed by reason of the said MOU. The cut off date for determining
the respective rights of the parties would, thus, be 1.4.1998. Submission of
H
564 SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R.

A the learned counsel that the MOU for the purpose of Section 28 of the 1958
Act should be read with the partnership deed is not acceptable to us. In fact,
the respondents have consciously relinquished their right, if any.

It is not a case where Sections 48 and 49 of the 1958 Act would be
applicable so as to enable the respondents to raise a defence in terms of
B Section 30(1 )(b) thereof.
•
It is also not a case where non-registration of MOU as was the case
in Amteshwar Anand v. Virender Mohan Singh and Ors., [2006] I SCC 148
was taken as a shield to defeat the purpose of the agreements entered into
by and between the parties. In that case, however, what was contended was
C that the agreement required registration in terms of Section 17( 1) of the
Registration Act whereas the High Court had found that the user agreement
was not registered in terms of Section 49 of the Act holding:

"... The Composition Deed in this case was a transaction between the
members of the same family for the mutual benefit of such members.
D
It is not the appellants' case that the agreements required registration
under any other Act. Apart from this, there is the principle that Courts
lean in favour of upholding a family arrangement instead of disturbing
the same on technical or trivial grounds particularly when the parties
have mutually received benefits under the arrangement. Both the
E courts below had concurrently found that the parties had enjoyed
material benefits under the agreements. We have ourselves also re-
scrutinized the evidence on record on this aspect and have found
nothing to persuade us to take a contrary view. Furthermore, in this
case the agreements had merged in the decree of the Court which is
also excepted under Sub-section 2(vi) of Section 17 of the Registration
F Act, 1908"

In, re Cadbury Brothers' Application (supra), it is stated:

"It seems to me manifest that the registration of this trade mark cannot
give rise to any rights except a right to the mark as a whole. It cannot ·
G give any statutory rights at all in respect of the word "Tudor"; and,
that being so, it is inexpedient to place on the register an unnecessary
disclaimer, because the effect of so doing is to unsettle the law and
give rise to doubts in other cases, where such disclaimers are not
inserted ...."
H
RAMDEV FOOD PRODUCTS PVT.LTD. v. ARVINDBHAI RAMBHAI PATEL [S.B SINHA.JJ565

For the self-same reason, this decision is also not applicable. A
ESSENCE OF PASSING OFF ACTION

In a case of this nature, the test for detennination of the dispute would
be the same where a cause of action for passing off arises. The deceptively
similar test, thus, would be applicable herein. B
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 off his goods.

Jn Kerly 's Law of Trade Marks and Trade Names' Supplement pages C
42 and 43, paragraph 16-02, the concept of passing off is stated as under:

"The law of passing-off can be summarised in one short general
proposition no man may pass off his goods as those of another. More
specifically, it may be expressed in terms of the elements which the
plaintiff in such an action has to prove in order to succeed. These are D
three in number.

Firstly, he must establish a goodwill or reputation attached to the
goods or services which he supplies in the mind of the purchasing
public by association with the identifying 'get-up' (whether it consists
simply of a brand name or a trade descrip- tion, or the individual E
features of labelling or packaging) under which his particular goods
or services are offered to the public, such that the get-up is recognised
by the public as distinctive specifically of the plaintiffs goods or
services.

Secondly, he must demonstrate a misrepresentation by the defendant F
to the public (whether or not intentional) leading or likely to lead the
public to belief that the goods or services offered by him are the
goods or services of the plaintiff.

Thirdly, he must demonstrate that he suffers or, in a quick time action,
that he is likely to suffer damage by reason of the erroneous belief G
engendered by the defendant's misrepresentation that the source of
the defendant's goods or service is the same as the source of those
· offered by the plaintiff... "

H
'

566 SUPREME COURT REPORTS (2006] SUPP. 5 S.C.R.

A PASSING OFF - INFRINGEMENT ). .
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
plaintiffs that a clear 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
B defendant's goods may be so different from the get up of the plaintiffs 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 proved that the defendant is improperly using the
plaintiffs mark. In an action for infringement where the defendant's trade mark
C 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. [See
Ruston & Hornsby Ltd v. The Zamindara Engineering Co., [1969] 2 SCC 727]

D In Parle Products (P) Ltd. v. J.P. and Co., Mysore, [1972] l SCC 618,
emphasis was laid on the broad and essential features of the impugned mark
holding:

" ... It would be enough if the impugned mark bears such an overall
similarity to the registered mark as would be likely to mislead a person
E usually dealing with one to accept the other if offered to him ..."

Noticing the similarity of the mark in question with that of the impugned
mark, it was opined that "if one was not careful enough to note the peculiar
features of the wrapper on ·the plaintiffs' goods, he might easily mistake the
defendants' wrapper for the plaintiffs' if shown to him some time after he had
F seen the plaintiffs"'.

It was further stated:

" ... After all, an ordinary purchaser is not gifted with the powers of
observation of a Sherlock Homes. We have therefore no doubt that
G the defendants' wrapper is deceptively similar to the plaintiffs' which
was registered. We do not think it necessary to refer to the decisions
referred to at the bar as in our view each case will have to be judged
on its own features and it would be of no use .to note on how many
points there was similarity and in how many others there was absence
of it."
H
RAMDEV FOOD PRODUCTS PVT. LTD. v. ARVINDBHAI RAMBHAI PATEL [S.B. SINHA, J.]567

In Kaviraj Pandit Durga Dutt Sharma v. Navaratna Pharmaceutical A
laboratories, AIR (I 965) SC 980, this Court held:

" ... These matters which are of the essence of the cause of action
for relief on the ground of passing off play but a limited role in an
action for infringement of a registered trade mark by the registered
proprietor who has a statutory right to that mark and who has a B
statutory remedy for the event of the use by another of that mark or
a colourable imitation thereof. While an action for passing off is a
Common Law remedy being in substance an action for deceit, that is,
a passing off by a person of his own goods as those of another, that
is not the gist of an action for infringement. The action for infringement C
is a statutory remedy conferred on the registered proprietor of a
registered trade mark for the vindication of the exclusive right to the
use of the trade mark in relation to those goods" (Vi de Section 21 of
the Act). The use by the defendant of the trade mark of the plaintiff
is not essential in an action for passing off, but is the sine qua non
in the case of an action for infringement. No doubt, where the evidence D
in respect of passing off consists merely of the colourable use of a
registered trade mark, the essential features of both the actions might
coincide in the sense that what would be a colourable imitation of a
trade mark in a passing off action would also be such in an action for
infringement of the same trade mark .... "
E
In Poddar Tyres ltd. v. Bedrock Sales Corporation Ltd. and Anr., [AIR
1993 Bombay 237), Srikrishna, J., as His Lordship then was, repelled the
contention that any trader who exclusively sells the goods bearing a registered
trade mark, has a right to adopt a trade name which could include the said
trade mark and that such adoption would not amount to infringement or F
passing off stating:

·• " ... Mr. Rahimtoola was not a_ble to cite any authority for the proposition
propounded, which I find somewhat startling, The consequences of
accepting this proposition would mean that the registered proprietor
would be at the mercy of anyone who sells the goods bearing his G
trade mark. In a situation like the present, where the businesses are
overlapping, the trade channels are almost identical and the family
background is conspicuous, I am of the view that there would be an
inherent likelihood of confusion in the minds of the public that not
only that the g()ods, which emanate from the first defendants, are
"Bedrock" goods, but also further that the first defendants' business H
568 SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R.

A is somehow intimately connected with the plaintiffs', either as a branch,
agency or otherwise. There is also the danger, as rightly emphasized
by the plaintiffs, that any act or omission of the first defendants
would have delicious repercussion on the credit, reputation and
goodwill of the plaintiffs themselves. For example, if the first defendants
were to commit an act of insolvency or do any act which tarnishes
B their reputation in the market, there is imminent likelihood of people
jumping into the confused conclusion that the plaintiffs had committed
an act of insolvency or that they had done something objectionable.
I am, therefore, unable to accept the contention of the first defendants
that, by their purportedly s~lling exclusively "Bedrock" goods, they
c are entitled to adopt the word "Bedrock" as a part of their company
name or trading style. That they have done so is not really disputed.
In my view, therefore, there is both infringement and passing off
action, prima fqcie ..."

De Cordova and Ors. v. Vick Chemical Co., (1951) 68 RPC 103 is nearer
D the issue involved herein as in that case the registered trade mark consisting
of the word 'Vaporub' and another registered trade mark consisting of a
design of which the words 'Vicks Vaporub Salve' formed a part. The defendants
in the suit advertised their ointment as 'Karsote Vapour Rub'. It was held that
the defendants had infringed the registered trade mark.

E The said decision was quoted with approval by this Court in K.R.
Chinna Krishna Chettiar v. Shri Ambal and Co., Madras and Anr., [1969] 2
SCC 131 wherein the question was whether the word 'Ambal' resembles the.
sound of the word 'Anda!'. It was held to be so upon rejecting an argument
advanced on behalf of the defendant that the same had distinct meanings
p stating:

" ... The Hindus in the south of India may be well aware that the words
Ambal and Andal represent the names of two distinct Goddesses. But
the respondent's customers are not confined to Hindus alone. Many
•
of their customers are Christians, Parsees, Muslims and persons of
G other religious denominations. Moreover, their business is not confined
to south of India. The customers who are not Hindus or who do not
belong to the south of India may not know the difference between the
words Anda! and Ambal. The words have no direct reference to the
character and quality of snuff. The customers who use the respondent's
goods will have a recollection that they are known by the word
H Ambal. They may also have a vague recollection of the portrait of a
RAMDEV FOOD PRODUCTS PVT.LTD. 1·. ARVJNDBHAI RAMBHAI PATEL [S.B. SINHA, J ]569

•:. benign goddess used in connection with the mark. They are not likely A
to remember the fine distinctions between a Vaishnavite goddess and
a Shivaite deity ... "

We may not lose sight of the fact that the mark was assigned in favour
of the Company as far back in the year 1992. The mark did not come to the
company through MOU or otherwise. B
LACHES AND ACQUIESCENCE

.. The plea of acquiescence on the part of the appellant herein has been
raised on two counts:

(i) The plaintiffs-appellant permitted the respondents to carry on
c
business in the trade name of 'Ramdev Masala".
(ii) It is, thus, also not entitled to an order of injunction.

The appellant by a registered notice dated 12/15-12-1998 asked the
defendant Nos. l and 7 that the firm 'Ramdev Masala' had been unauthorisedly D
using the appellant-company registered trade mark in respect of its product
sold and manufactured by them and on the packing materials, labels, boxes,
poly pouches. They were called upon to restrain from doing so with immediate
effect and destroy the necessary label/ packets of packing materials failing
which it was threatened that a legal action would be taken. E
For determining the said issues, we may notice the following facts.

A civil suit was filed by the first respondent in the Ahmedabad City
Civil Court wherein a prayer was made that the deed of assignment be
declared null and void and the appellant herein be permanently restrained F
from using the same as also for a declaration that they are the owners of the
said trade mark/trade name. However, an interim order as prayed for therein
• was not granted. A First Information Report was also lodged against the
respondents by the appellant-Company before the Madhupura Police Station
for commission of an alleged offence under Section 63 of the Copyright Act
and Sections 78 and 79 of the 1958 Act as well as Sections 417, 420, 419 and G
486 of the Indian Penal Code. An application for quashing the said complaint
was filed before the Gujarat High Court on 4.8.1999. It was dismissed by an
order dated 26. I0.1999. A Special Leave Petition preferred thereagainst being
SLP (Crl.) No. 3900of1999 was also dismissed by this Court by an order dated
14.12.1999. In tpe meanwhile, a rectification application was filed by the
H
570 SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R.

A respondents before the Registrar of Trade Mark, Mumbai allegedly stating
.....
that the registered trade mark bearing No. 44 7700 was not being used by the
plaintiff, it was not entitled to continue to claim title thereover or use the
same. Various applications were moreover filed by the respondents herein for
rectification of the entry in the register in respect of various label marks of
B the appellant. The appellant thereafter issued a public notice on 17.12.1999
calling upon the respondents to restrain themselves from infringing upon the
trade mark of the appellant, in respect whereto a public notice was also issued
by the respondents herein on 21.12.1999. The suit thereafter was filed on
10.2.2000. Contention of the respondents in this behalf was that not only in
terms of the MOU the appellant had been allowed to carry on business under
..
C the name and style of 'Ramdev Masala', no immediate step having been taken
after issuance of the public notice dated 15 .12.1998 for long time, they were
not entitled to obtain an order of injunction. Delay in some cases may defeat
equity but the chronology of events noticed hereinbefore does not suggest
that the appellants consciously allowed the respondents to use the trade
mark.
D
Acquiescence is a facet of delay. The principle of acquiescence 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.
E In Mis. Power Control Appliances and Ors. v. Sumeet Machines Pvt.
Ltd., [1994] 2 SCC 448, this Court stated:

"Acquiescence is sitting by, when another is invading the rights and
spending money on it. It is a course of conduct inc9nsistent with the
claim for exclusive rights in a trade mark, trade name etc. It implies
F positive acts; not merely silence or inaction such as is involved in
!aches .... "

In an infringement of trade mark, delay by itself may not be a ground
...
for refusing to issue injunction as has been observed by Lahoti, J. (as His
G Lordship then was) in Midas Hygiene Industries (P) Ltd. v. Sudhir Bhatia
and Others, [2004] 3 SCC 90) in the following terms:

"The law on the subject is well settled. In cases of infringement either
of trade mark or of copyright, normally an injunction must follow.
Mere delay in bringing action is not sufficient to defeat grant of
H injunction in such cases. The grant of injunction also becomes
RAMDEV FOOD PRODUCTS PVT.LTD. 1·. ARVINDBHAI RAMBHAI PATEL [S.B. SINHA, J.]57 J

necessary if it prima facie appears that the adoption of the mark was A
itself dishonest."

(Emphasis supplied)

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 B
that assent or laying by and consequent acts it would be unjust in all the
circumstances to grant the specific relief.

Kerr in his "Treatise on the Law and Practice of Injunction", Sixth
Edition at pages 360-361 states as under:
c
"Mere delay after knowledge of the infringement to take proceedings,
not sufficient to call the Statute of Limitations into operation, or where
the infringement continues, is not, it seems, a bar to the right of an
injunction at the trial. Lapse of time unaccompanied by anything else
is, it seems, no more a bar to a suit for an injunction in aid of the legal
right than it is to an action deceit. D
But delay may cause the Court to refuse an interlocutory
injunction, especially if the defendant has built up a trade in which
he has notoriously used the mark ...."

Specific knowledge on the part of the plaintiff and prejudice suffered by E
the defendant is also a relevant factor. [See Spry on Equitable Remedies,
Fourth Edition, page 433]

Applying the aforementioned principles in the instant_ case,' it is evident
that 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 of the appellant F
herein. It had to wait for the outcome of various proceedings pending before.
different courts. The respondents having themselves taking recourse to judicial
proceedings, as noticed hereinbefore, cannot now be permitted to set up the
defence of acquiescence on the part of the appellant. Indisputably, in a case
of infringement of trade mark, injunction would ordinarily follow where it is G
established that the defendant had infringed the trade mark and had not been
able to discharge its burden as regards the defence taken by it.

In Pioneer Electronic Corporation and Anr. v. Registrar of Trade
Marks, (I 978) RPC 716, an Australian Court referring to a large number of
decisions observed: H
572 SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R.

A "These cases demonstrate that the essential requirement for the
maintenance of the validity of a trade mark is that it must indicate a
connection in the course of trade with the registered proprietor, even
though the connection may be slight, such as selection or quality
control or control of the user in the sense in which a parent company
controls a subsidiary. Use by either the registered proprietor or a
B licensee (whether registered or otherwise) will protect the mark from
attack on the ground of non-user, but it is essential both that the user
maintains the connection of the registered proprietor with the goods
and that the use of the mark does not become otherwise deceptive.
Conversely, registration of a registered user will not save the mark if
c there ceases to be the relevant connection in the course of trade with
the proprietor or the mark otherwise becomes deceptive."

[See also Holly Hobbie Trade Mark, (1984) RPC 329.]

INJUNCTION ISSUE
D
It is although beyond any doubt or dispute that the defendant had been
manufacturing and selling its products; what is sought to be injuncted is
using a label which is deceptively similar to that of the plaintiff.

Our attention has been drawn to the right of the parties of the second
E and third part of the MOU to carry out export business in the brand name
of 'Ramdev' which, in our opinion, does not advance their case as by reason
thereof, the appellant-Company had been also conferred right to carry on the
export business in the name of 'Ramdev'.

It is also not correct that having regard to the fact that the property
F situated at Sola having been given in favour of the respondents, they have
acquired a vested right in the trade mark as has been urged before us or
otherwise. Respondents did not have any right over the trade mark. They in
fact, it will bear repetition to state, assigned the same in favour of the
appellant-Company. They have assigned the said trade mark and having
G relinquished their right. Respondents, thus, 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
H be the terms of the MOU.
RAM DEV FOOD PRODUCTS PVT. LTD. 1·. ARV!NDBHAI RAMBHAI PATEL [S.B. SINHA, ns 73
Registration of a trade mark and user thereof per se may lead to the A
conclusion that the plaintiff has a prima facie 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 l y
itself although may not be sufficient to establish a prima facie case but in
view of our findings aforementioned, we are satisfied that the appellant has
been able to establish existence of a legal right in itself and violation of the B
registered trade mark on the part of the respondents. We have also considered
the comparable strength of the cases of the parties and are of the opinion that
the case of the plaintiff-appellrnt stands on a better footing than the
defendants-respondents.

A question as regards the matter relating to grant of injunction has
c
been dealt in S.M. Dyechem Ltd. v. Cadbury (India) Ltd., (2000] 5 SCC 573
wherein upon noticing a large number of decisions including Colgate
Palmolive (India) Ltd. v. Hindustan Lever Ltd., (1999] 7 SCC I as also the
subsequent distinction made in respect of the decision of the House of Lords
in American Cyanamid v. Ethicon Ltd., (1975] 1 All ER 853, it was stated: D
" ... Therefore, in trademark matters, it is now necessary to go into
the question of "comparable strength" of the cases of either party,
apart from balance of convenience.

In Mis. Transmission Corporation ofA.P., Ltd. v. Mis. Lanco Kondapalli E
Power Pvt. Ltd., JT (2005) 10 SC 542, it was held:

"The interim direction ordinarily would precede finding of a prima
facie case. When existence of a prima facie case is established, the
court shall consider the other relevant factors, namely, balance of
convenience and irreparable injuries. The High Court in its impugned F
judgment although not directly but indirectly has considered this
aspect of the matter when on merit it noticed that the Appellant has
raised a dispute as regard payment of an excess amount of Rs.35
crores although according to the Respondent a sum of Rs.132 crores
is due to it from the Appellant and the Appellant had been paying the G
... amount for the last two years as per the contract.

Conduct of the parties is also a relevant factor. If the parties had been
acting in a particular manner for a long time upon interpreting the
terms and conditions of the contract, if pending determination of the
lis, an order is passed that the parties would continue to do so, the H
574 SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R.

A same would not render the decision as an arbitrary one, as was
contended by Mr. Rao. Even the Appellant had prayed for adjudication
at the hands of the Commission in the same manner. Thus. it itself
thought that the final relief would be granted only by the Arbitrator."

We also do not appreciate the conduct of the respondents. They were
B aware of the rights under the MOU. They had all along been enforcing the
~ame. Legal defence was available to them under the 1958 Act. Evidently. they
filed a suit to scuttle the intended action on the part of the respondents
pursuant to the public notice dated 15.12.1998.

In P.M Diesels Ltd. v. Patel Field Marshal Agencies & Ors., (2001) PTC
C 20 (Del), the High Court noticed the distinction between logo, trade mark and
trade name and was of the view that the defendants cannot be permitted to
use the trade name so as to defeat the other portion of the order of injunction
already passed against them. An injunction can also be granted against the
respondents to use the corporate name.
D 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.

We are not oblivious of the fact that respondents have been
E manufacturing and carrying on business in the sale of spices under the name
'Ramdev Masala' even during pendency of the suit. The learned Trial Judge
had made an attempt to strike the balance. The High Court, however, had
overturned a part of it having regard to the statutory interdict contained in
the Rules made under the Prevention of Food Adulteration Act and Standards
of Weights and Measures Act.
F
Kerly 's Law of Trade Marks and Trade Names, Thirteenth Edition states
as under about the general test for grant of an interim injunction:

"In trade-mark infringement cases irreparable damage, in this sense, is
relatively easily shown, since infringement may easily destroy the
G value of a mark or at least nullify expensive advertising in a way that
is hard to quantify for the purposes of an inquiry into damages. This
has more recently come to be referred to, in cases where the defendant's
-
conduct is not directly damaging but merely reduces the distinctive
character of the claimant's mark, as "dilution" ....
H
RAMDEV FOOD PRODUCTS PVT LTD. r. ARVINDBHAI RAMBHAI PATEL [S.B. SINHA,J.]575

... In particular, although it is usually neither necessary nor A
appropriate to assess the degree of probability of success which the
claimant's action has (provided that it is arguable, and subject to the
principle of American Cyanamid that the merits may be resorted to as
a 'tie-breaker' if the balance of convenience is very even,) in trade
mark and passing off cases, it is very hard to avoid doing so, since
thebetter the claimant's case on the likelihood of deception (frequently B
the major issue) the greater the harm which he is likely to suffer.
Accordingly, in appropriate cases, where the state of the evidence
.,
pennits it, the court may seek to weigh up the merits in deciding
whether to grant interim relief."

Thus, when a prima facie case is made out and balance of convenience
c
is in favour of the appellant, it may not be necessary to show more than loss
of goodwill and reputation 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.
D
The expression "irreparable injury" in that sense would have established
injury which the plaintiff is likely to suffer.

In Mahendra & Mahendra Paper Mills Ltd. v. Mahindra & Mahindra
Ltd., [2002] 2 SCC I47, this Court observed:
E
"23. The Bombay High Court in the case of Kirloskar Diesel Recon
(P) Ltd. v. Kirloskar Proprietary Ltd. considered the scope of granting
injunction in a suit for infringement of a trade mark under Section 106
of the Act by the use of the mark "Kirloskar", held:

"The principle of balance of convenience applies when the scales are F
evenly balanced. The existence of the 1st appellant in each appeal is
very recent whereas the existence of the respondents belonging to
'Kirloskar Group of Companies' has been for over a period of 50 years.
On their own showing, the appellants are not using the word 'Kirloskar'
as trade mark but as part of trading style whereas the respondents
have not only acquired distinctiveness and goodwill in the word G
'Kirloskar' but it is even the registered trade mark of the !st respondent.
There is sufficient evidence on record to show that the huge business
is carried by 'Kirioskar Group of Companies'. There is nothing on
record to show the extent of the business of the appellants. The 2nd
appellant has throughout been aware about the business reputation H
'•·.
576 SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R.

A of the respondents and efforts of the respondents in protecting their
rights in the trade marks as also of preventing others to use the word
'Kirloskar' as a part of the trading name or trading style. By grant of
the interim injunction in favour of the respondents, the appellants are
not prevented from carrying on business without the word 'Kirloskar'
fonn ing part of the corporate name of the Ist appellant in each appeal.
B In the facts of the case, the respondents' reputation is likely to be
adversely affected if the appellants are not prevented from using name
of the Ist appellant in each appeal. In the facts of the case, the
balance of convenience is not in favour of the appellants.

c * * *
The real question in each case is whether there is as a result of
misrepresentation a real likelihood of confusion or deception of the
public and consequent damage to the plaintiff. The focus is shifted
from the external objective test of making comparison of activities of
parties to the state of mind of public in deciding whether it will be
D
confused. With the passage of time and reputation acquired, the trade
mark 'Kirloskar' has acquired the secondary meaning and has become
almost a household word. The judgments relied upon by Mr Kane
pertain to the cases of one type of business and not where variety
of businesses have been carried by the plaintiff and the defendant as
E in the instant case. The business activities of the respondents vary
from pin to piano as borne out from the object clauses of the
memorandums of association of the respondents. The appellants have
still to commence their business activities but as mentioned in the
memorandum~ of association of the Ist appellant in each appeal, some
of the object clauses therein overlap with the activities of respondents
F and more particularly of Respondents 6 and 7."

APPELLATE COURT'S JURISDICTION TO INTERFERE WITH ORDERS
OF THE TRIAL JUDGE

We are not oblivious that normally the appellate court would be slow
G to interfere with the discretionary jurisdiction of the trial court.
The grant of an interlocutory injunction is in exercise of discretionary
power and hence, the appellate courts will usually not interfere with it.
. However, appellate courts will substitute their discretion if they find that
H discretion has been exercised arbitrarily, capriciously, perversely, or where the
RAMDEV FOOD PRODUCTS PVT. LTD. r. ARVINDBHAI RAMBHAI PATEL [S.B. SINHA, J.]577

cou1t has ignored settled principles of law regulating the grant or refusal of A
interlocutory injunctions. This principle has been stated by this court time
and time again. (See for example Wander ltd. v. Antox India P. ltd, (1990]
Supp SCC 727, lakshmikant V. Patel v. Chetanbhai Shah, (2002] 3 SCC 65
and Seema Ars had Zaheer v. MC of Greater Mumbai, (2006] 5 SCALE 263]

The appellate court may not reassess the material and seek to reach a B
conclusion different from the one reached by the court blow if the one
reached by that court was reasonably possible on the material. 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. C
However, in this case the courts below proceeded on a prima facie
misconstruction of documents. They adopted and applied wrong standards.
We, therefore, are of the opinion that a case for interference bas been made
out.
D
CONCLUSION

Our findings aforementioned, it goes without saying, are prima facie in
nature. We place on record that Mr. Nariman contended that there is evidence
to show the contrary intention of the parties in respect whereof a large
number of documents are available. Evidently respondents may prove. No E
such document is, however, before us. If the respondents, at the trial, could
bring the same on record, evidently the court would be entitled to draw its
own inference.

We have differed with the findings of the courts below primarily on the
interpretation of the MOU. In that view of the matter, we are of the opinion
F
that in this case this Court would be justified to interfere with the said
findings. We are, however, not oblivious of the damages which may have to
be suffered by respondents herein in the event the suit of the appellant is
to be ultimately dismissed. We intend to protect the same also.
G
For the said purpose, we would take Into consideration the terms of the
injunction granted by the Trial Judge that the respondents were entitled to
sell their products in the name of M/s. Ram Dev Masala only from the seven
outlets. The modification made by the High Court has already been noticed
by us.
H
578 SUPREME COURT REPORTS [2006] SUPP. 5 S.C.R.

A We, in view of our findings aforementioned, direct: ~-

(i) The respondents be restrained from using the trade mark including
the trade name 'Ramdev Masala' in any of their products.
(ii) They may, however, carry on their business in any other name
insofar as manufacturing of spices is concerned.
B
(iii) 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 pennissible size in tenns of the
c 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
D
Products Pvt. Ltd."
(iv) The appellant shall deposit a sum of Rs. 50 lakhs before the Trial
Court or furnish a bank guarantee for the said sum by way of
security.
E (v) Despite pending applications for rectification before the Registrar
of Trade Marks, the final hearing of Civil Suit No. 828 of 2000
shall be expedited and the learned Trial Judge is hereby directed
to complete the hearing as expeditiously as possible preferably
within a period of six months from the date of communication of
this order.
F
For the reasons aforementioned, these appeals are allowed. The
respondents shall pay and bear the costs of the appellant of these appeals.
Counsel's fee assessed at Rs. 25,000/-.

K.K.T. Appeals allowed.