Bombay High Court
Uto Nederland V vs Tilaknagar Industries Ltd on 16 July, 2025
2025:BHC-OS:10958-DB
Neeta Sawant COMAPL-6617-2025 with APP-66-2012-FC
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
IN ITS COMMERCIAL APPELLATE DIVISION
APPEAL NO. 66 OF 2012
IN
NOTICE OF MOTION NO. 993 OF 2009
IN
SUIT NO. 632 OF 2009
WITH
NOTICE OF MOTION NO. 445 OF 2012
WITH
NOTICE OF MOTION NO. 740 OF 2013
IN
APPEAL NO. 66 OF 2012
IN
NOTICE OF MOTION NO. 993 OF 2009
IN
SUIT NO. 632 OF 2009
WITH
CROSS OBJECTION (L.) NO. 3 OF 2012
IN
APPEAL NO. 66 OF 2012
IN
NOTICE OF MOTION NO. 993 OF 2009
IN
SUIT NO. 632 OF 2009
UTO Nederland B.V. and anr. ....Appellants
(Original Plaintiffs)
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: Versus :
Tilaknagar Industries Ltd. ....Cross Objectionist
Respondent/
Orig. Defendant
WITH
INTERIM APPLICATION NO. 2979 OF 2024
IN
APPEAL NO. 66 OF 2012
IN
NOTICE OF MOTION NO. 993 OF 2009
IN
COMMERCIAL I.P. SUIT NO. 2 OF 2009
(ORIGINALLY SUIT NO. 632 OF 2009)
Allied Blenders and Distillers Ltd. ....Applicant
(Intervenor/Proposed
Appellants)
In the matter Between :
UTO Nederland B.V. and Anr. ....Appellants
(Plaintiffs No.1 and
2)
Versus :
Tilaknagar Industries Ltd. ....Respondent
(Original Defendant)
WITH
NOTICE OF MOTION NO. 1427 OF 2014
IN
APPEAL NO. 66 OF 2012
IN
NOTICE OF MOTION NO. 993 OF 2009
IN
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SUIT NO. 632 OF 2009
AND
IN
APPEAL NO. 567 OF 2014
IN
NOTICE OF MOTION NO. 1287 OF 2010
IN
COUNTER CLAIM NO. 06 OF 2010
IN
SUIT NO. 632 OF 2009
Tilaknagar Industries Ltd. .... Applicant/
Respondent
In the matter between :
Herman Jansen Beverages Nederland
B.V. and Anr. .....Appellants
: Versus :
Tilaknagar Industries Ltd. ....Respondent
WITH
COMMERCIAL APPEAL (L) NO. 6617 OF 2025
IN
NOTICE OF MOTION NO. 1287 OF 2010
IN
COUNTER CLAIM NO. 06 OF 2010
IN
COM IP SUIT NO. 2 OF 2009
Tilaknagar Industries Ltd. ....Appellant
(Orig.Plaintiff to the
counter claim)
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: Versus :
Herman Jansen Beverages Nederland B.V.
& Ors. ....Respondents
(Orig. Defendants to
the counter claim)
ALONGWITH
INTERIM APPLICATION ( L) NO. 6655 OF 2025
IN
COMMERCIAL APPEAL (L.) NO. 6617 OF 2025
Tilaknagar Industries Ltd. ....Applicant
In the matter between :
Tilaknagar Industries Ltd. ....Appellant
(Orig. Plaintiff)
: Versus :
Herman Jansen Beverages Nederland B.V.
and Ors. ....Respondents
WITH
COMMERCIAL APPEAL (L) NO. 6622 OF 2025
WITH
INTERIM APPLICATION (L) NO. 16999 OF 2023
WITH
INTERIM APPLICATION (L) NO. 6686 OF 2025
Tilkanagar Industries Ltd. ....Appellant
: Versus :
Herman Jansen Beverages Nederland B.V.
& Ors. ....Respondents
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Neeta Sawant COMAPL-6617-2025 with APP-66-2012-FC
Mr. Ravi Kadam, Senior Advocate and Mr. Venkatesh Dhond, Senior
Advocate with Mr. H.W. Kane, Mr. Rohan Kadam, Mr. Rohan Kelkar, Mr.
Ashutosh Kane, Mr. Manvendra Kane, Ms. Vedangi Soman & Mr. I.K.
Paranjape i/b Mr. H.W. Kane, for the Appellant in COMAPL/6617/2025 &
COMAPL/6622/2025 & for Respondent in APP/66/2012.
Mr. Darius Khambatta, Senior Advocate and Mr. Ashish Kamat, Senior
Advocate with Mr. Karl Tamboly, Mr. Priyank Kapadia i/b Ms. Yashvi
Panchal, for Appellant in APP/66/2012 & for Respondent No. 3 in
COMAPL/6617/2025 & COMAPL/6622/2025
Mr. Darius Khambatta, Senior Advocate with Mr. L.M. Jenkins with Mr.
Siddhant Dalvi i/b LMJ Law Practice, for Respondents No. 1, 2 & 4 in both
Appeals.
______________________________________________________________
CORAM : ALOK ARADHE, CJ. &
SANDEEP V. MARNE, J.
Judgment Reserved On : 24 June 2025
Judgment Pronounced on : 16 July 2025
JUDGMENT (Per : Sandeep V. Marne, J.)
A. THE CHALLENGE 1) Commercial Appeal No.66/2012 is filed by the Plaintiffs
challenging the judgment and order dated 22 December 2011 passed by the
learned Single Judge of this Court dismissing Notice of Motion No.
993/2009 filed by the Plaintiffs seeking temporary injunction against the
Defendant from passing off by use of the marks ‘MANSION HOUSE’,
‘M.H.’, ‘M.H.B.’ and ‘Savoy Club’ and committing infringement of
Plaintiff ‘s copyrights in labels associated with the said marks. The
Defendant has filed Counterclaim in Plaintiff ‘s suit and in that
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Counterclaim, the Defendant filed Notice of Motion No. 1287/2010
seeking injunction against the Plaintiffs from manufacturing and/or
bottling and/or marking and/or trading and/or otherwise dealing in the
alcoholic products and like goods bearing the trademarks ‘MANSION
HOUSE’ and ‘SAVOY CLUB’ and other trademark deceptively similar to
Defendant’s trademark ‘MANSION HOUSE’ and ‘SAVOY CLUB’ so as
to commit the tort of passing off. Notice of Motion No. 1287/2010 filed
by the Defendants in its Counterclaim has been dismissed by the learned
Single Judge by judgment and order dated 7 February 2025, which is
subject matter of challenge in Commercial Appeal (L) Nos. 6617/2025
filed by the Defendant. Interim Application (Lodg.) No. 16999/2023 was
filed by Plaintiff No.3 seeking leave to introduce products in the State of
West Bengal under the trademark ‘MANSION HOUSE’ and by judgment
and order dated 7 February 2025, the learned Single Judge has allowed
Interim Application (Lodg.) No. 16999/2023, which is challenged by the
Defendant in Commercial Appeal (L) No. 6622/2025.
B. FACTS 2) Plaintiff Nos.1 and 2 are Companies organised and existing
under the Dutch laws and are producers, importers, exporters, sellers and
distributors of various spirits and liquors including scotch, brandy, whisky,
gin, vodka, rum, liqueurs and cognac. Plaintiff Nos.1 and 2 are fully
owned subsidiaries of UTO holding B.V. formerly known as B.V. UTOMIJ.
For ease of reference, Plaintiff Nos.1 and 2 are collectively referred to as
‘UTO’. Plaintiffs claim that the trademark ‘MANSION HOUSE’ was
registered by UTO in the Netherlands in November 1922. UTO claims to
have secured registration of the mark ‘MANSION HOUSE’ in 33
jurisdictions across the world. The mark ‘SAVOY CLUB’ was registered by
the UTO in the Netherlands on 12 January 1967 and UTO claims to have
secured registration of the trademark ‘SAVOY CLUB’ in 27 jurisdictions
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across the world. UTO applied for registration of the wordmark
‘MANSION HOUSE’ in India and it is claimed that it is the proprietor of
the wordmark ‘MANSION HOUSE’ in India since 5 April 1983. UTO
claims to have secured registration of the wordmark ‘SAVOY’ in India on
20 December 1983. UTO entered into a License and Manufacturing
Agreement with the Defendant-Tilaknagar Industries Ltd. (Tilaknagar) for
use of the marks ‘MANSION HOUSE’ and ‘SAVOY CLUB’ in India on
condition of procurement of specified minimum quantities of concentrates
for producing and selling whisky, brandy, gin and rum from UTO.
3) Defendant-Tilaknagar is also in the business of manufacturing
alcoholic beverages. Under the Licensing and Manufacturing Agreement
of 7 July 1983, the Defendant started manufacturing, marketing and selling
whisky, gin, rum and brandy under the marks ‘MANSION HOUSE’ and
‘SAVOY CLUB’ in India.
4) Disputes arose between Scotch Whisky Association (SWA)
and UTO in the year 1986, as SWA was aggrieved by UTO indicating its
products as Scotch Whisky though not meeting the SWA’s standards. SWA
accordingly filed action against UTO in a Dutch Court to restrain UTO
from indicating its products as Scotch Whisky. By order dated
15 January 1987, the Dutch Court restrained UTO from indicating its
product as Scotch Whisky. In the above background, UTO addressed letter
to Tilaknagar on 23 February 1987, under which UTO ceded its marks
‘MANSION HOUSE’ and ‘SAVOY CLUB’ to Tilaknagar with a condition
that the marks would go back to UTO, if UTO was unable to supply
concentrates to Tilaknagar. The letter dated 23 February 1987 was
countersigned by Tilaknagar on the same day i.e. 23 February 1987.
Tilaknagar addressed second letter dated 23 February 1987 to UTO, which
was countersigned by UTO, under which Tilaknagar promised to take from
UTO 50,000 litres of concentrates for the year 1987 with an increase of
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10% for every consecutive year till the quantity of 1,50,000 litres was
reached or until the Indian market had reached the saturation point. The
second letter dated 23 February 1987 addressed by Tilaknagar recorded
that if Tilaknagar failed to comply with the conditions stipulated in the
said second letter, the ceding of brand names ‘MANSION HOUSE’ and
‘SAVOY CLUB’ to Tilaknagar would become invalid immediately.
5) Tilaknagar sent a telex requesting UTO to issue No-Objection
letter for registration of the wordmark ‘MANSION HOUSE’ in the name
of Tilaknagar on 9 February 1989. In the meantime, UTO’s application
for registration of the wordmark ‘MANSION HOUSE’ was advertised and
according to UTO, no opposition was filed by Tilaknagar to the said
application. On 21 February 1989, UTO wrote to Tilaknagar under which
UTO agreed not to take away the brand names ‘MANSION HOUSE’ and
‘SAVOY CLUB’ from Tilaknagar if Tilaknagar managed to import
specified quantities of concentrates every year starting from 1989.
Tilaknagar developed its own concentrates by the year 1992-93 for use in
the drinks to be sold under the mark ‘MANSION HOUSE’ and started
manufacturing and selling the same using its own concentrate. On
22 November 1993, Tilaknagar was granted registration of label marks
using the said mark ‘MANSION HOUSE’. Tilaknagar stopped purchasing
concentrates from UTO from 1994. Tilaknagar thereafter applied for
registration of the label marks using the mark ‘SAVOY CLUB’. On
28 April 1994, the applications of Tilaknagar were allowed. Thereafter,
Tilaknagar filed application for registration of the wordmark ‘MANSION
HOUSE CHOCOLATE MINT LIQUEUR’ on 1 July 1994. On
21 October 1997, UTO and Tilaknagar signed a letter referring to the letter
dated 7 July 1983 specifying minimum quantities of concentrates to be
procured by Tilaknagar for the year 1998. Certain correspondence took
place between UTO and Tilaknagar in the year 2002 under which
arrangements for procurement of concentrates from UTO were discussed
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between the parties. On 7 August 2003, UTO sent legal notice to
Tilaknagar. On 15 December 2003, Tilaknagar replied the legal notice. It
appears that further correspondence took place between the parties
between 2004 to 2008 where discussions were held for resuming
procurement of concentrates by Tilaknagar from UTO. It however appears
that Tilaknagar continued manufacture and sale of its products by using its
own concentrates. In the above background, UTO served cease and desist
notice to Tilaknagar on 11 June 2008, which was replied by Tilaknagar on
20 June 2008. UTO thereafter filed Suit No. 632/2009 [now Commercial
(IP) Suit No. 2/2009] against Tilaknagar seeking permanent injunction
against infringement of copyright in UTO’s labels, permanent injunction
against passing off goods under the marks ‘MANSION HOUSE’ and
‘SAVOY CLUB’, permanent injunction against passing off goods under the
label marks ‘MANSION HOUSE’, ‘MH’, ‘MHB’ and ‘SAVOY CLUB’,
mandatory injunction requiring Tilaknagar to withdraw its
registration/applications in respect of the marks ‘MANSION HOUSE’
and ‘SAVOY CLUB’ and damages in the sum of Rs.78 crores.
6) In its suit, UTO took out Notice of Motion No.993/2009
seeking temporary injunction against Tilaknagar. Tilaknagar opposed the
Motion by filing Affidavit-in-Reply. Tilaknagar filed Suit No.578/2009
before the Civil Court, Hyderabad against UTO in respect of
correspondence made by UTO to various excise authorities seeking
restraint against Tilaknagar’s use of its labels. Tilaknagar filed Written
Statement in Suit No. 632/2009 (Commercial (IP) Suit No.2/2009). The
learned Single Judge dismissed UTO’s Notice of Motion No.993/2009
seeking temporary injunction by impugned judgment and order dated
22 December 2011. UTO has filed Appeal No.66/2012 challenging the
judgment and order of the learned Single Judge dated 22 December 2011.
Tilaknagar has filed Cross Objections No.3/2012 challenging the findings
of the learned Single Judge that the marks ‘MANSION HOUSE’ and
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‘SAVOY CLUB’ have transborder reputation in India. By order dated
6 March 2012, the Appeal Court admitted UTO’s Appeal but did not stay
the operation of the order of the learned Single Judge.
7) In addition to filing of written statement opposing UTO’s
Suit, Tilaknagar also filed Counterclaim against UTO, in which Tilaknagar
had filed Notice of Motion No. 1287/2010 seeking injunction to restrain
UTO from manufacturing, marketing or selling alcoholic products bearing
trademark ‘MANSION HOUSE’ and ‘SAVOY CLUB’ or by means of any
other mark deceptively similar to the trademark ‘MANSION HOUSE’ and
‘SAVOY CLUB’ by committing the tort of passing off. While Notice of
Motion No. 993/2009 filed by UTO seeking injunction against Tilaknagar
came to be decided by judgment and order dated 22 December 2011,
Notice of Motion No. 1287/2010 filed by Tilaknagar in its Counterclaim
remained pending. After rejection of UTO’s Notice of Motion for
temporary injunction and admission of Appeal No.66/2012, Tilaknagar
pressed its Notice of Motion No. 1287/2010 filed in its Counterclaim after
it learnt that in mid-August 2014, UTO assigned and transferred 50% of
their purported rights in the two trademarks in favour of Allied Blenders
and Distillers (ABD) who was impleaded to the suit as Plaintiff No.3.
Therefore, Tilaknagar applied for urgent ad-interim relief on 10 September
2014 in its Notice of Motion No. 1287/2010. The Single Judge of this
Court made an interim arrangement, without considering the contentions
of the parties on merits, vide order dated 10 September 2014 inter-alia
directing that if Plaintiffs proceeded to obtain licenses or other
permissions, the same would be done by them at their own risk and cost
subject to the final result of the Notice of Motion. Plaintiffs were
restrained from introducing any products while using the subject
trademarks in the market without seeking leave of the Court. The said ad-
interim order passed on 10 September 2014 was later directed to be
continued during pendency of Notice of Motion No. 1287/2010, with the
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result, the Plaintiffs remained restrained from introducing any products in
Indian market without seeking leave of the Court. Plaintiffs did not
immediately apply for leave of this Court to introduce any products either
through UTO or through ABD.
8) In the meantime, UTO’s Appeal No.66/2012 was referred to
the larger Bench, after noticing some conflict in decisions of this Court, by
order dated 15 December 2014 to decide the issues: (i) whether the Court
makes prima facie adjudication of issues on merits or merely exercises
discretion while deciding the application for temporary injunction and
(ii) the scope and ambit of appeal from an order passed by trial judge on an
interlocutory application. The Larger Bench answered the reference
holding that in the matter of temporary injunction, the Court does not
adjudicate on the subject matter or any part of it on merits and considers
the application for temporary injunction in the light of well-known
principles and exercises its discretion weighing all relevant consideration
without any expression of opinion on merits of the matter. The second
issue is answered holding that the Appellate Court while deciding an
appeal, has to examine whether the discretion exercised is not arbitrary,
capricious or contrary to the principles of law and the appellate Court may,
in a given case, has to adjudicate on facts even in such discretionary orders.
9) About nine years after passing of ad-interim order dated
10 September 2014 granting leave to apply for introduction of products in
the Indian market, ABD took out Interim Application (L.) No.16999/2023
seeking leave to introduce products in the State of West Bengal under the
trademark ‘MANSION HOUSE’ in terms of the label registration secured
by ABD in the State of West Bengal.
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10) The learned Single Judge of this Court took up Interim
Application (L.) No.16999/2023 filed by ABD alongwith pending Notice
of Motion No. 1287/2010 taken out by Tilaknagar in its counterclaim for
hearing together. By judgment and order dated 7 February 2025, the
learned Single Judge has rejected Tilaknagar’s Notice of Motion No.
1287/2010 and has thereby not granted any injunction in favour of
Tilaknagar to restrain the Plaintiffs from manufacturing, marketing and
selling any goods by using the trademarks ‘MANSION HOUSE’ and
‘SAVOY CLUB’. On the other hand, Interim Application (L.)
No.16999/2023 filed by ABD has been allowed by the learned Single
Judge vide common judgment and order dated 7 February 2025 granting
leave in favour of ABD to introduce products under the trademark
‘MANSION HOUSE’. Tilaknagar is aggrieved by common judgment and
order dated 7 February 2025 and has filed Commercial Appeal (L) No.
6617/2025 to the extent of rejection of Notice of Motion No. 1287/2010
filed by it in Counterclaim No.6/2010. The judgment and order dated
7 February 2025 passed by the learned Single Judge to the extent it allows
Interim Application (L.) No. 16669/2023 filed by ABD has also been
challenged by Tilaknagar by filing separate Appeal (L.) No. 6622/2025.
11) On 10 March 2025, this Court recorded statement made on
behalf of UTO that UTO and ABD shall not act on the judgment and
order dated 7 February 2025, which statement has been continued from
time to time and continues to operate till decision of the present Appeals.
12) Since the issues involved in all the three Appeals are interconnected,
all the three Appeals are heard and disposed of by this common judgment.
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UTO in support of the Appeal No.66/2012 has made following
submissions :-
(i) That the learned Single Judge has grossly erred in refusing interim
injunction in favour of UTO despite making out prima-facie case of UTO
remaining a registered proprietor of marks. The findings recorded by the
learned Single Judge clearly shows that case of reversion of title was
specifically argued by UTO. However, the learned Judge has overlooked
the consequences of provisions of Section 31 of the Transfer of Property
Act, 1882 even though the provision of Section 31 may not have been
quoted, the fore of the said provision was clearly argued. Instead of
determining and recording prima-facie findings on the issue of reversion,
the learned Judge has skirted the same and has gone on unfounded
considerations of acquiescence, abandonment and waiver.
(ii) That UTO is registered proprietor of the marks and even after the
ceding letters of 23 February 1987, it continues to be a registered owner of
the marks and is clearly entitled to injunction.
(iii) That the learned Single Judge has failed to consider UTO’s case of
defeasance of transfer and reversion of the marks to UTO. That the two
letters of 23 February 1987 expressly provided for ceding of the marks by
UTO in favour of Tilaknagar to become invalid upon breach of promises
by Tilaknagar as stipulated in the second letter of 23 February 1987. That
Tilaknagar admitted breach of promises committed by it in the WrittenPage No.13 of 83
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proof as held by the Apex Court in Nagindas Ramdas Versus.
Dalpatram Ichharam alias Brijram and others1. In the light of
admission of breaches by Tilaknagar, the learned Judge ought to have
accepted UTO’s case of reversion of marks as provided in the second
ceding letter of 23 February 1987.
(iv) That a strong prima facie case of defeasance of transfer and reversion
of marks was made out by UTO based on plain language of the second
ceding letter dated 23 February 1987. That therefore the learned Judge
ought to have applied provisions of Section 31 of the Transfer of Property
Act, 1882 and upheld UTO’s contention of reversion of marks. In support
of his contentions, he would rely upon judgments in Venkatarama Aiyar
Versus. Aiyasami Aiyar and others2, Govindamma Versus. Secretary,
Municipal First Grade College, Chintamani3, Indu Kakkar Versus.
Haryana State Industrial Development Corporation Ltd. and another4,
State of Andhra Pradesh and others Versus. Mandanapalle Ex-
servicemen Association5.
(v) That reversion of seller’s title upon happening of the event specified
is the supperadded condition under Section 31 of the Transfer of Property
Act is automatic and it is not necessary to file any proceedings seeking a
declaration of extinguishment of purchaser’s title. That in the present case
upon admitted commission of breach of promises by Tilaknagar, the
ceding of marks in favour of Tilaknagar automatically got extinguished by
operation of law and it was not necessary for UTO to file separate suit
1 (1974) 1 SCC 242
2 1922 SCC OnLine Mad 135
3 1986 SCC Online Kar 62
4 (1999) 2 SCC 37
5 2024 SCC Online AP 18
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seeking a declaration for extinguishment of Tilaknagar’s ownership of
marks.
(vi) That the learned Single Judge has specifically recorded a finding of
Tilaknagar’s failure to import the concentrates and that therefore the
learned judge ought to have recorded the consequential finding of breach.
That Tilaknagar had never pleaded a case that there was no breach of its
obligation to purchase concentrates on account of failure to stipulate the
price and that therefore the learned Single Judge erred in holding that
absence of specification of price would release Tilaknagar of consequences
of breach of promises. In any case, there are judicial admissions of breach
by Tilaknagar in its Written Statement and it was not even necessary for
UTO to prove such breach.
(vii) The two letters of 23 February 1987 constitute a single transaction
between the parties. This is clear from absence of any consideration in the
first letter of 23 February 1987. That the consideration for ceding of marks
was promise to purchase concentrates from UTO as evidenced in the
second letter of 23 February 1987. That therefore both the letters must be
read together as a whole. That in any case, the second letter of
23 February 1987 provided for immediate termination of ceding
arrangement recorded in the first letter upon Tilaknagar committing breach
of the promises. That if first letter of 23 February 1987 is to be treated as a
standalone document, the same would render the entire transaction void
under Section 25 of the Indian Contract Act, 1872 due to absence of
consideration.
(viii) That orders in Dutch Court proceedings are absolutely irrelevant for
the purpose of determining the nature of transaction between the parties as
recorded by letters dated 23 February 1987. That a transaction can be
contained in more than one deed or instrument and in support he would
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rely upon judgments in S. Chattanatha Karayalar Versus. Central Bank
of India Ltd. and others6 and Hubtown Limited Versus. IDBI
Trusteeship Service Limited7. That therefore conditions reflected in the
second ceding letter dated 23 February 1987 actually constituted a
superadded condition within the meaning of Section 31 of the Transfer of
Property Act. That provisions of Section 31 of the Transfer of Property
Act are clear, providing for automatic extinguishment of title of purchaser
upon happening of event which is part of superadded condition.
(ix) That the Law Commission has consciously not replicated English
Law while retaining the provisions of Section 31 in the Transfer of
Property Act. That therefore Tilaknagars’s reliance on English law is
totally irrelevant. That in any case, judgments relied upon by UTO clearly
indicate that extinguishment of title under Section 31 is automatic without
having need to file any separate proceedings seeking declaration of title.
(x) That the superadded condition contemplated under Section 31 of
the Transfer of Property Act can form integral part of the transaction and
that therefore non-fulfillment of promise to breach transaction would entail
reversion of title in the marks in favour of UTO. That reliance by
Tilaknagar on judgments in support of the proposition of superadded
condition not forming integral part of the transaction is baseless as none of
the judgments suggest so. On the other hand, the judgments in Jagat Singh
Chilwal and another Versus. Dungar Singh8, Mt. Purnia Kurmi Versus.
Manindra Nath Mahanti9, Manilal Mohanlal Shah and others Versus.
Sardar Sayed Ahmed Sayed Mahmad and another10 and Harichand &
Co. Versus. Gosho Kabushiki Kaisha 11 clearly suggest that the
6 1965 SCC OnLine SC 67
7 2016 SCC OnLine Bom 9019
8 AIR (38) 1951 Allahabad 599
9 AIR 1968 Assam & Nagaland 50
10 (1954) 1 SCC 724
11 (1925) ILR 49 Bom 25
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superadded condition can form integral part of the transaction. That in
any case, and even if it is assumed that the superadded condition cannot be
associated with consideration, there are other breaches unrelated to the
consideration which would result in cessation of transfer to Tilaknagar and
reversion in favour of UTO.
(xi) Tilaknagar’s conduct itself confirms that Tilaknagar always
understood that valid defeasance had taken place. This is borne out by
Tilaknagar’s letter dated 21 October 1997 referring to the earlier license
agreement dated 7 July 1983. That if Tilaknagar indeed had become owner
of the marks, there was no need for it to refer to the License Agreement
dated 7 July 1983 in its letter dated 21 October 1997. That Tilaknagar itself
accepted the position of revival of License of 1983 vide letter dated
21 October 1997. The learned Single Judge grossly erred in treating
execution of the said letter dated 21 October 1997 to be mutual mistake of
the parties. That the learned Single Judge has completely disregarded
revival of terms of License Agreement dated 7 July 1983 vide new
Agreement executed in the form of letter dated 21 October 1997 signed by
both the parties. That correspondence subsequent to letter agreement dated
21 October 1997 also clearly establishes the case of revival of License
Agreement. That therefore findings of the learned Single Judge accepting
the case of mutual mistake by ignoring the said correspondence is in the
teeth of law settled in the Apex Court judgment of Grasim Industries
Limited and another Versus. Agarwal Steel12.
(xii) That injunction was claimed by UTO on the basis of its claim for
passing off. That the Single Judge himself has recorded a finding of cross
border reputation and goodwill of UTO in the marks. That once UTO
established goodwill in the marks in India, the Learned Single Judge ought
to have granted injunction claim for passing off in favour of UTO.
12 (2010) 1 SCC 83
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(xiii) That Tilaknagar’s submission of impermissibility to transfer marks
in absence of goodwill is baseless. That Tilaknagar used goodwill of UTO
even after execution of the two ceding letters of 23 February 1987.
(xiv) The findings recorded by the learned Single Judge about
abandonment, waiver, relinquishment and acquiescence are completely
baseless and unsupported by correspondence between the parties as well as
their conduct. That the learned Judge has erred in holding that UTO
permitted Tilaknagar to sell the products without insisting upon Tilaknagar
fulfilling the terms and conditions of second ceding letter of
23 February 1987 and that therefore the alleged breaches by Tilaknagar
were waived by UTO. That these findings are beyond pleadings in the
Written Statement which contains a specific admission about breaches.
That the said findings also ignore express admissions, which are evidenced
in several letters of Tilaknagar agreeing to purchase concentrates from
UTO right upto 29 October 2002. That when Tilaknagar itself showed
willingness to purchase concentrates from UTO, it could not have been
held by the learned Single Judge that UTO did not insist upon fulfillment
of terms and conditions of second ceding letter or waiver of breaches.
(xv) The learned Single Judge could not have applied the principles of
delay and laches for denying injunction in favour of UTO by ignoring
settled legal principles governing delay, waiver or acquiescence. He would
rely upon judgments in M/s. Hindustan Pencils Private Limited Versus.
M/s. India Stationery Products Co. & another 13 and M/s. Power
Control Appliances and others Versus. Sumeet Machines Pvt. Ltd. 14 in
support of his contention that once case of fraud and violation of
Plaintiff ‘s right is established, mere inordinate delay cannot be a ground
for refusal of injunction. That in any case high threshold of acquiescence is
not made out in the present case and in support reliance is placed on the
13 1989 SCC OnLine Del 34
14 (1994) 2 SCC 448
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judgment of D. R. Cosmetics Pvt. Ltd. & Anr. Versus. J. R. Industries 15,
Medley Pharmaceuticals Ltd. Versus. Twilight Mercantiles Ltd. and
another16 and Emcure Pharmaceuticals Ltd. Versus. Corona Remedies
Pvt. Ltd and another17. That where fraud constituting dishonesty of
adoption or continued use is established, there is no room for acquiescence
and that shield of delay, acquiescence or long use being defeasance in
equity cannot aid user who is dishonest as held in Eaton Corporation &
Anr. Versus. B.C.H. Electric Limited18.
(xvi) That the findings of the learned Single Judge on the issue of
acquiescence are clearly unsustainable. That the correspondence clearly
spells out that there was no requirement for UTO to insist on procurement
of concentrates as Tilaknagar itself requested repeatedly for purchase of
concentrates right upto 2002. That by letter of 29 October 2002,
Tilaknagar placed order for concentrates. However, the impugned order
completely ignores the said letters while recording baseless findings of
failure to insist on procurement of concentrates. That the other finding in
support of the theory of acquiescence about UTO not stopping Tilaknagar
from use of marks is contrary to the judgments in M/s. Hindustan Pencils
Private Limited (supra), M/s. Power Control Appliances (supra), D. R.
Cosmetics Pvt. Ltd. (supra), Medley Pharmaceuticals Ltd. (supra),
Emcure Pharmaceuticals Ltd. (supra), Medley Laboratories (P) Ltd.,
Mumbai and another Versus. Alkem Laboratories Limited 19, Khoday
Distilleries Limited (Now known as Khoday India Limited) Versus.
Scotch Whisky Association and others20 and Midas Hygiene Industries
(P) Ltd. and another Versus. Sudhir Bhatia and others21.
15 2008 SCC OnLine Bom 18
16 2014 SCC OnLine Bom 697
17 2014 SCC OnLine Bom 1064
18 2013 SCC OnLine Del 2333
19 2002(3) Mh.L.J. 546
20 (2008) 10 SCC 723
21 (2004) 3 SCC 90
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(xvii) That the alternate case of letters of 1987 constituting license has
erroneously not been accepted by the learned Judge. That subsequent
conduct and correspondence clearly spells out that parties always treated
even letters of 1987 as mere license. If Tilaknagar indeed has become
owner of marks on account of 1987 ceding letters, it would not have
referred to the license of 1983 in the subsequent correspondence.
C.2 SUBMISSIONS OF MR. KHAMBATTA OPPOSING CROSS-
OBJECTIONS FILED BY TILAKNAGAR
14) Mr. Khambatta has made following submissions for opposing the
cross objections filed by Tilaknagar :-
(i) That the findings recorded by the learned Single Judge accepting
UTO goodwill is consistent with the principle of estoppel. That Tilaknagar
opted to secure license agreements from UTO on account of the fact that
UTO enjoyed goodwill and reputation in respect of the said marks in
India. This inference drawn by the learned Single Judge does not warrant
interference in view of the law laid down by the Apex Court in Wander
Ltd. and another Versus. Antox India P. Ltd.22
(ii) That securing of license implies high value of marks as held by the
Delhi High Court in J.K. Jain & others Versus. Ziff-Davies Inc23.
(iii) That even cross border reputation of an owner in respect of the
mark can be recognized for inferring goodwill in India. In support, he
22 1990 (Supp) SCC 727
23 2000 (56) DRJ (Suppl) 806 (DB)
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would rely upon judgments in Daiwa Pharmaceuticals Co. Ltd. Versus.
Daiwa Pharmaceuticals Pvt. Ltd. and Others24, N.R. Dongre and
others Versus. Whirlpool Corporation and another25. He also places
reliance on the judgments Kamal Trading co., Bombay and others
Versus. Gillette U.K. Limited, Middle Sex, England 26, Haw Par Bros.
International Ltd. Versus. Tiger Balm Co. (P) Ltd. & Ors 27,
Aktiebolaget Volvo of Sweden Versus. Volvo Steels Ltd. of Gujarat
(India)28, Caesar Park Hotels & Resorts Inc. Versus. Westinn
Hospitality Services Ltd.29, Rainforest Cafe, Inc. Versus. Rainforest
Cafe & Ors.30, Celphalon Inc. Versus. Maneesh Pharmaceutical Limited
& Anr31, Mayo Foundation for Medical Education & Research Versus.
Bodhisatva Charitable Trust and others32 and Daiwa Pharmaceuticals
Co. Ltd. (supra) in support of his contention that actual sales in India is
not the test for establishing transborder reputation and goodwill. That
therefore no interference is warranted in the findings of the learned Single
Judge about UTO enjoying cross border reputation and goodwill in respect
of the marks in India.
He would accordingly pray for dismissal of the cross objections.
C.3 SUBMISSIONS CANVASSED BY MR. RAVI KADAM TO OPPOSE
APPEAL NO. 66 OF 2012
15) Mr. Kadam, the learned senior advocate appearing for
Tilakanagar has canvassed before us following broad submissions while
opposing Appeal No.66/2012 filed by UTO and for supporting denial of
24 2024 SCC OnLine Bom 1078
25 (1996) 5 SCC 714
26 1987 SCC OnLine Bom 754
27 1995 SCC OnLine Mad 189
28 1997 SCC OnLine Bom 578
29 1998 3 L.W. 274
30 2001 SCC OnLine Del 385
31 2016 SCC OnLine Del 5640
32 2023 SCC OnLine Del 3241
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injunction by the learned Single Judge vide impugned order dated
22 December 2011 :-
(i) That the suit filed by UTO is not a suit for title in respect of the
marks ‘MANSION HOUSE’ and ‘SAVOY CLUB’ and UTO has not
suited Tilaknagar for trademark infringement. That the suit is for passing
off and that therefore the contentions raised on behalf of the UTO seeking
to establish title to the marks are fundamentally flawed.
(ii) Tilaknagar is a registered proprietor of the marks ‘MANSION
HOUSE’ and ‘SAVOY CLUB’ and Section 28(1) of the Trademarks Act
confers upon it the exclusive right to use the marks and to obtain relief in
respect of infringement thereof. This exclusive right cannot be interdicted
by a person asserting title to an unregistered mark by virtue of Section
27(1) of the Trademarks Act, which imposes prohibition from instituting
any proceedings for infringement of unregistered trademark.
(iii) Passing off being remedy for invasion of rights in a business, it is
necessary for UTO to demonstrate existence of goodwill in India.
Ownership of goodwill being the first integer of a passing off claim, the
goodwill must be shown to exist in connection with conduct of a business
which must be local in character. That once goodwill and reputation in
India is not established, UTO’s contentions about reversion of title in a
passing off action need not really be examined. In support reliance is
placed on judgment of the Apex Court in Toyota Jidosha Kabushiki
Kaisha Versus. Prius Auto Industries Limited and others33.
(iv) UTO itself did not claim in the Plaint any business or goodwill in
India. Case on goodwill is sought to be introduced straightaway in
rejoinder thereby demonstrating lack of existence of prima-facie case. That
33 (2018) 2 SCC 1
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it is impermissible to introduce a case in rejoinder as held in Noorul
Hassan Versus. Nahakpam Indrajit Singh and others 34 That perusal of
various averments in the plaint would demonstrate Plaintiff ‘s claim of
existence of goodwill in various parts of the world and there are no
pleadings in the entire plaint to demonstrate that any goodwill has ever
been established by the Plaintiff in India. In support of the contention of
existence of prime use generating goodwill in a particular jurisdiction,
reliance is placed on judgment in Brihan Karan Sugar Syndicate Private
Limited Versus. Yashwant Mohite Krushna Sahakari Sakhar
Karkhana35. That therefore in absence of any actionable goodwill of UTO
in Indian market, it cannot be inferred that any prima-facie case was made
out for grant of interim injunction in favour of UTO.
(v) In contrast to UTO’s failure to demonstrate existence of goodwill in
India, Tilaknagar has been admittedly selling its products with the
impugned marks rights since 1983 till filing of the suit in 2009 and has
established strong reputation and goodwill in India. That therefore in
passing off action initiated by UTO, no case for injuncting Tilaknagar has
been made out.
(vi) UTO has neither pleaded the case of reversion of title based on
provisions of Section 31 of the Transfer of Property Act in the plaint nor
such case was even argued when the impugned order dated
7 February 2025 was passed by the learned Single Judge. That such case is
introduced as an afterthought only at the time of deciding Tilaknagar’s
Notice of Motion in counterclaim.
(vii) Section 31 of the Transfer of Property Act merely permits or makes
lawful insertion of superadded condition in a transaction of sale. It does
34 (2024) 9 SCC 353
35 Civil Appeal No. 2768 of 2023 decided on 14 September 2023.
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not provide for automatic reversion of title. Section 31 merely permits
insertion of contractual clause in reversion of title upon happening of
uncertain event. That party raising claim of reversion of title is therefore
required to enforce such contractual condition by filing a suit for
declaration. In support, reliance is placed in Madanlal Fakirchand
Dudhediya Versus. Shree Changdeo Sugar Mills Ltd.36, Devendra
Prasad Sukul and others Versus. Surendra Prasad Sukul and another 37
and Munshi Lal and others Versus. Ahmad Mirza Beg and others 38.
That in all the judgments relied upon by UTO, separate action was
required to be brought for the purpose of claiming reversion of title. That
UTO failed to seek a declaration of reversion of title after Tilaknagar’s
stoppage of purchase of concentrates. That therefore in a passing off
action, UTO cannot indirectly seek declaration of reversion of title by
having recourse to Section 31 of the Transfer of Property Act.
(viii) Section 31 of the Transfer of Property Act is otherwise irrelevant in
relation to transfer of unregistered trademark under Section 38 of the
Trademarks Act. An unregistered trademark cannot be transferred without
goodwill of the business. It is inconceivable that the ceding letters of 1987
would transfer ownership of marks in favour of UTO leaving behind
goodwill of Tilaknagar earned by it on account of unhindered sale of
products several years after execution of such ceding letters.
(ix) That the two ceding letters of 1987 constitute two distinct contracts
between the parties. That the ceding has taken place only in the first letter
whereas second letter is only for recording promise for purchase of
concentrates. That the promise to purchase concentrates in not a
consideration for ceding of the marks since the two transactions are
recorded in two distinct documents. That therefore no condition
36 1962 3 SCR 973
37 1935 SCC OnLine PC 54
38 1933 SCC OnLine Oudh CC 165
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incorporated in the second ceding letter would constitute a superadded
condition within the meaning of Section 31 of the Transfer of Property
Act.
(x) Referring to the orders passed by the Dutch Court, he would
contend that UTO wanted to get rid of the marks and accordingly ceded
the same in favour of Tilaknagar by recording first letter of 23 February
1987. That ceding was complete on execution of the said letter. The
second letter of 23 February 1987 was for purchase of concentrates by
Tilaknagar from UTO having no relationship with transaction of ceding of
the marks. That therefore even if any breach on the part of Tilaknagar to
buy concentrates is established, UTO’s remedy is to sue for damages for
such breach and there is no question of such breach having any effect on
transfer of ownership of the marks in favour of Tilaknagar.
(xi) UTO is otherwise estopped from pleading automatic reversion on
account of specific pleaded case of license in the plaint. That the plaint
proceeds on the footing that UTO was always the owner and Tilaknagar
has always been a mere licensee. UTO therefore cannot turn around and
plead that the ownership in the marks got transferred in favour of
Tilaknagar and such ownership latter reverted to UTO in accordance with
Section 31.
(xii) That UTO abandoned/waived the remedy in respect of breach of
promises in the second ceding letter of 23 February 1987. That admittedly
Tilaknagar stopped purchasing concentrates from UTO after the year 1994
but no remedy was exercised by UTO in respect of breach of promise to
buy concentrates and the learned Judge has rightly held that such remedies
were waived/abandoned by UTO.
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(xiii) UTO has from time to time acknowledged Tilaknagar’s ownership
in the marks and cannot be permitted to raise the claim of reversion of
ownership based on Section 31 of the Transfer of Property Act.
(xiv) The findings of the learned Single Judge about mutual mistake in
respect of the letter dated 21 October 1997 is both sound and reasonable.
That the conclusion is raised by taking into consideration the entire
correspondence on record and no interference is warranted in the said
findings.
(xv) That the learned Judge has rightly accepted the defence of
Tilaknagar of UTO’s acquiescence in the ownership of the marks by
Tilaknagar. That the learned Judge has rightly concluded that Plaintiff
acquiesced into Defendant using the mark despite alleged breach of the
ceding letter dated 23 February 1987 thereby disentitling any injunction.
That finding on acquiescence is in accordance with settled law enunciated
with judgments in Amritdhara Pharmacy Versus. Satya Deo Gupta 39,
M/s. Power Control Appliances and others Versus. Sumeet Machines
Pvt. Ltd. (supra) and Ramdev Food Products (P) Ltd. Versus.
Arvindbhai Rambhai Patel and others40.
(xvi) The learned Single Judge has rightly rejected UTO’s prayer for
interim injunction as balance of convenience is clearly tilted against UTO
and in favour of Tilaknagar. That till date, UTO has not used the subject
marks in India. For the last 43 long years, UTO has permitted Tilaknagar
to develop its own concentrates and sell the products in India without
buying concentrates from it for the last several years. The suit claiming
ownership is filed in the year 2009 though the ceding letter was executed
on 23 February 1987.
39 1962 SCC OnLine SC 13
40 (2006) 8 SCC 726
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(xvii) Ever since rejection of its motion for interim injunction, Plaintiff is
without any injunction for the last 14 years. It has not introduced even a
single product in India for the last so many years and that therefore it is too
late in a day to grant any injunction in favour of UTO.
(xviii) The learned Single Judge has not ignored any material on record
and has passed well reasoned order rejecting UTO’s application for
temporary injunction. No interference is therefore warranted in the order
of the learned Single Judge following the ratio in Wander Ltd. (supra).
The above submissions made by Mr. Kadam also cover submissions in
support of cross objections filed by Tilaknagar challenging the findings of
the learned Single Judge on the issue of cross border reputation and
therefore it is not necessary to separately record his submissions in that
regard.
C.4 SUBMISSIONS OF MR. DHOND IN SUPPORT OF COMMERCIAL
APPEAL (L) NOS. 662 OF 2025 AND 6617 OF 2025
16) In support of Commercial Appeal (L) Nos. 6622/2025 and
6617/2025 filed by Tilaknagar challenging the judgment and order dated
7 February 2025 dismissing Tilaknagar’s Motion for interim injunction
filed in counterclaim and allowing the application filed by Plaintiff No.3
(ABD) to introduce the products in the State of West Bengal, Mr. Dhond,
the learned Senior Advocate has canvassed the following submissions :-
(i) That the learned Judge has reversed the findings recorded in the first
judgment that Tilaknagar is the owner of the marks ‘MANSION HOUSE’
and ‘SAVOY CLUB’ by wrongly holding that the first judgment did not
consider the issue as to whether ownership of the marks reverted to UTO
on account of alleged breach of conditions in the ceding letters of 1987.
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That the issue of reversion of title was specifically framed in the first
judgment and was answered in Tilaknagar’s favour. That the Court cannot
record inconsistent findings while passing two interlocutory orders and in
support, reliance is placed on the judgment in Vishnu Traders Versus.
State of Haryana and others41 and State of Uttar Pradesh and others
Versus. Hirendra Pal Singh and others42.
(ii) That the learned Single Judge has misread the first judgment, by
holding that UTO’s application for injunction was rejected only on the
ground of acquiescence and abandonment of rights, ignoring the finding
recorded in the first judgment that the marks stood transferred to
Tilaknagar.
(iii) The finding of the learned Single Judge that title in respect of the
marks reverted back to UTO under Section 31 of the Transfer of Property
Act on account of commission of breach of superadded condition is in the
teeth of the findings in the first judgment that Tilaknagar was not in
breach.
(iv) That Section 31 of the Transfer of Property Act does not provide for
automatic reversion of title and the provision merely allows superaddition
of a condition in a transaction of sale of property and not automatic
reversion of title.
(v) Provisions of Section 27(2) of the Trademarks Act makes it
explicitly clear that nothing in the Act applies to the remedy of passing off
and that therefore the learned Single Judge has erred in relying on
provisions of Sections 28(3) and 33 of the Trademarks Act. That in any
case, requirements under Section 33(2) of the Trademarks Act are not
41 (1995) Supp (1) SCC 461
42 (2011) 5 SCC 305
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made out in the present case as the case involves use of same marks and
not separate marks.
(vi) That the learned Single Judge has erred in recording the finding of
suppression in respect of Tilaknagar’s pleadings in Hyderabad suit ignoring
the position that the said pleadings were available with the learned Judge
passing first judgment, who was fully aware about filing of suit by
Tilaknagar in Hyderabad Court. That even otherwise there is no
suppression of any fact on the part of Tilaknagar. Reliance is placed on
judgments in S.J.S. Business Enterprises (P) Ltd. Versus. State of Bihar
and others43 and Government of NCT of Delhi and another Versus. BSK
Realtors LLP and another44 in support of the contention that only such
material which would decide the outcome of the suit needs to be disclosed.
That the issue involved in Hyderabad suit has got absolutely nothing to do
with the present suit and therefore failure on the part of Tilaknagar to
disclose filing of Hyderabad suit in the Written Statement and cannot
amount to suppression.
(vii) That the learned Single Judge has erred in invoking the doctrine of
prosecution history estoppel which applies only in relation to claims made
at the time of registration of marks. That pleadings in the Hyderabad suit
were not material and therefore the same would not constitute estoppel
against Tilaknagar. In support, reliance is placed on judgments in Kishori
Lal Versus. MST Chaltibai45, Chhaganlal Keshavlal Mehta Versus.
Patel Narandas Haribhai46 and Kedar Nath Motani and others Versus.
Prahlad Rai and others47. That the finding of the learned Single Judge
that Tilaknagar is not entitled to seek interlocutory relief is in the teeth of
doctrine of proportionality and legal principles of passing off being a tort
43 (2004) 7 SCC 166
44 2024 SCC OnLine SC 1092
45 1958 SCC OnLine SC 54
46 (1982) 1 SCC 223
47 1959 SCC OnLine SC 16
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to protect public interest as held in Shaw Wallace Versus. Mohan Rocky
Spring Water Breweries Ltd.48 and Sona BLW Precision Forgings
Limited and another Versus. Sona Mandhira Pvt. Ltd. and others49.
(viii) The findings of the learned Single Judge that MANSION HOUSE
labels are dissimilar is perverse as the same is recorded by mixing the
concept of copyright infringement with passing off. That MANSION
HOUSE constitutes prominent and essential features of the two
wordmarks and once it is established that the rival wordmarks are similar,
no further inquiry is required. In support, he would place reliance on
judgments on K. R. Chinna Krishna Chettiar Versus. Sri Ambal &
Co.and others50, Hiralal Prabhudas Versus. Ganesh Trading Company
and others51, Reckiit & Colman of India Ltd. Versus. Wockhardt
Limited52 and Messrs Girnar Tea Versus. Brooke Bond (India) Ltd. 53
(ix) That the learned Single Judge has failed in permitting ABD to
launch same products under the mark ‘MANSION HOUSE’ in violation
of principle of one mark, one source and one proprietor. Reliance is placed
on M/s. Power Control Appliances and others Versus. Sumeet
Machines Pvt. Ltd. (supra).
(x) That Tilaknagar is entitled to injunction as it has been exclusively
using the marks for 42 years thereby generating enormous sales in India.
Tilaknagar has been recognised as proprietor of both the marks in the first
judgment. UTO proposes to use same identical wordmarks for same
goods. That injunction is essential since the tort of passing off subserves
the public interest by protecting the public from being deceived by use of
48 MIPR 2007 2 185
49 2023 SCC OnLine Del 1118
50 AIR 1970 SC 146
51 AIR 1984 Bom 218
52 Appeal No. 1180 of 1991 in NMS No. 2141 of 1991 in Suit No. 2970 of 1991
53 1990 93 Bom. L.R. 97
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identical or deceptively similar marks by others. That therefore balance of
convenience lies in favour of Tilaknagar as UTO is without any interim
relief in pending suit for about 14 years.
C.5 SUBMISSIONS OF MR. KHAMBATTA OPPOSING TILAKKNAGAR’S
COMMERCIAL APPEAL (L) NOS. 6622 OF 2025 AND 6617 OF
2025
17) While opposing the Appeals filed by Tilaknagar against the
judgment and order of the learned Single Judge dated 7 February 2025,
Mr. Khambatta has raised the following submissions :-
(i) That Tilaknagar’s claim of having sold its products and developing
goodwill in India post 1983 is fallacious in view of the fact that Tilaknagar
continued making representation to the customers in India that
manufacturing and sale of the products was in collaboration with UTO.
That such representation made by Tilaknagar admits UTO’s reputation
and goodwill in respect of the marks in question. Such representations
were made till the year 2003 belying Tilaknagar’s case of having
developed independent goodwill since 1983.
(ii) That Tilaknagar’s Notice of Motion No. 1287/2010 was rightly
dismissed by invoking the principle of prosecution of history estoppel and
by following the judgment of this Court in Shantapa Versus. Anna54.
That Tilaknagar raised the claim of distinction between the mark obtained
by Defendant and the one allegedly assigned to the Plaintiff in Hyderabad
suit whereas in the counterclaim, it raised a plea of deceptive similarity
between the two marks. That the pleadings raised in Hyderabad suit
would clearly estop Tilaknagar from raising contradictory plea in the
counterclaim.
54 2023 SCC OnLine Bom 2566
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(iii) That the learned Single Judge has rightly considered suppression on
the part of Tilaknagar about pleadings in Hyderabad suit while filing
counterclaim in the present suit. That since Tilaknagar is a Plaintiff in the
counterclaim, all consequences associated with suppression would clearly
be attracted for decision of Notice of Motion filed in the counterclaim.
Having indulged in suppression, Tilaknagar was not entitled to any
injunctive relief in its counterclaim.
(iv) Tilaknagar does not have actionable goodwill as its use of marks till
2003 was on relying on representation of UTO. In any case, no amount of
dishonest use can create actionable goodwill.
(v) That Tilaknagar’s argument of public interest has no basis as
Sections 28(3) and 32(3) of the Trademarks Act contemplate that there
can be more than one proprietor of the same marks. That Plaintiff-
Tilaknagar itself has claimed in Hyderabad suit that its products are
dissimilar to the marks owned by UTO.
(vi) Lastly, it is submitted that the net effect of the orders passed by the
two learned Single Judges in UTO’s Notice of Motion and in the Notice
of Motion filed in Tilaknagar is that both would be entitled to sell their
products in India. If Tilaknagar is confident of having created its
reputation in India for over 42 years, there is no reason for Tilaknagar to
worry about introduction of products by Plaintiff No.3 in pursuance of
the second impugned order passed against him. That therefore as
alternative to the submissions recorded above and on a without prejudice
basis, it is suggested that hearing of the suit can be expedited till which
time both the interim orders can be allowed to operate.
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two independent orders passed by the two learned Single Judges of this
Court at different points of time. UTO’s challenge in Appeal No.66/2012
is to the judgment and order dated 22 December 2011 dismissing Notice of
Motion No.993/2009 seeking temporary injunction against Tilaknagar
from infringing its copyright in the labels and from passing off the goods
under the marks ‘MANSION HOUSE’ and ‘SAVOY CLUB’. Appeal
No.66/2012 is pending for the last 13 long years without grant of any
interim relief in favour of UTO, which has resulted in a situation where
Tilaknagar has been freely selling products under the two marks
‘MANSION HOUSE’ and ‘SAVOY CLUB’ without any hindrance in
India during pendency of the Suit for the last 16 long years. Ordinarily, this
position would have continued, possibly till disposal of the suit (subject to
decision of Appeal No.66/2012) as suit itself has remained pending for 16
long years. However, Plaintiff No.3 (ABD) filed Interim Application No.
16999/2023 seeking leave of this Court to introduce its products under the
mark ‘MANSION HOUSE’ in the State of West Bengal, in pursuance of
leave granted by this Court vide order dated 10 September 2014 in Notice
of Motion No. 1287/2010 filed by Tilaknagar in its counterclaim. The
Interim Application filed by ABD triggered response from Tilaknagar
where it thought of pressing its Notice of Motion No. 1287/2010 which
was pending decision for 15 long years. This is how Tilaknagar pressed
Notice of Motion No. 1287/2010 when ABD’s Interim Application for
introduction of products in West Bengal was taken up for hearing. It was
possibly necessary for Tilaknagar to press its application for injunction in
counterclaim as passing of any order in ABD’s interim application would
have otherwise had some reflection on the prayers made by Tilaknagar in
its own application for temporary injunction. ABD’s Interim Application is
the reason why Tilaknagar pressed its application for temporary injunction
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filed in counterclaim after 15 long years and it has invited second
impugned order dated 7 February 2025 dismissing its Notice of Motion
No. 1287/2010. Since Tilaknagar’s application for interim injunction is
dismissed, the second impugned order also allows ABD’s application for
introduction of products under the mark ‘MANSION HOUSE’ in the
State of West Bengal.
19) This is how decision of applications seeking temporary
injunction at two different points of time has resulted in a situation where
applications of the rival parties are rejected and none of them are injuncted
from manufacturing and/or selling products under the impugned
trademarks. The net result of this situation is that both can possibly
manufacture and sell products under the impugned marks in India.
However, as of now UTO’s agent (ABD) is granted permission to
introduce products under the mark ‘MANSION HOUSE’ only in the State
of West Bengal. However, since Tilaknagar’s application for temporary
injunction is rejected, UTO believes that there is no prohibition against it
from introducing its own products throughout the country under the
impugned marks.
20) In the above backdrop, we are tasked upon to examine
correctness of the two impugned orders. If UTO succeeds in setting aside
the first impugned order in Appeal No.66/2012, Tilaknagar would be
injuncted from manufacturing and/or selling products under the impugned
marks in India, which may possibly obviate the very need of examining the
correctness of the second order. On the other hand, if UTO’s Appeal
No.66/2012 is dismissed and the impugned order is upheld, the UTO still
contends that the second impugned order deserves to be upheld so that
UTO is not restrained from manufacturing and/or selling its products
under the impugned marks and both UTO and Tilaknagar can
simultaneously do so during pendency of the suit. Tilaknagar, on the other
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hand, urges that the first impugned order needs to be upheld and
consequently the second impugned order deserves to be set aside. The aim
of Tilaknagar in urging so is to ensure that UTO’s application for interim
injunction to restrain Tilaknagar from manufacturing and/or selling
products under the impugned marks is rejected and on the other hand,
UTO is restrained from manufacturing/selling products under the
impugned marks in India during pendency of the suit. These are the broad
positions that rival parties have taken before us and it is our endeavour to
decide in the present Appeals, as to which party needs to be injuncted
temporarily during pendency of the suit.
21) Before proceeding further, we cannot ignore the anguish
expressed by the Apex Court in its order in Pernod Ricard India Private
Limited Versus. United Spirits Limited 55 after noticing that interim
applications are treated as final decisions and parties do not proceed with
trial of the suit, spending time only on decision of interlocutory
applications. We reproduce the order passed by the Hon’ble Apex Court :-
After hearing learned counsel for the parties at length, the impugned
orders being concurrent which is for the purposes of determination of
interim arrangement pending suit cannot in any manner influence the
final determination of the suit, we would not like to interfere under
Article 136 of the Constitution of India.
However, we find that the suit is at an initial stage for almost 3 years
and in a suit of this nature even issues have not been framed. On our
query, learned counsel for the petitioner submits that there are only two
witnesses to be examined and so is the position with the respondent.
The aforesaid being the position, we are of the view that from the
stage of framing of issues to such a trial and arguments, it should not
take more than six months to complete the trial proceedings. We order
accordingly.
The concerned District Judge, Mohali to proceed with the suit
accordingly.
At the insistence of counsel for the petitioner, we clarify that it is well
settled proposition of law that decisions on interlocutory applications are
55 Special Leave to Petition (Civil) No. 17674 of 2023 decided on 6 September 2023.
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applications itself are treated as final decision but it is not so. In all such
cases, interim arrangements should be made and the trial should proceed
rather than to spend time only on interlocutory applications. That
protects the petitioner against the apprehension that the impugned
judgment may be cited in other Court qua petitioner’s cases of a similar
nature.
Needless to say that the trial Court will not be influenced at the stage
of final decision based on evidence recorded with the observations at the
interlocutory stage whether of the trial Court or the High Court.
The special leave petition is dismissed.
(emphasis added)
22) In the present case as well, parties are still fighting with each
other on the issue of temporary injunction. Parties have not made any
attempts of proceeding with trial of the Suit and are yet to file their
evidence after framing of issues on 26 February 2013 and despite direction
of the Court to file Affidavits of Evidence vide order dated
26 February 2013.
23) Keeping in mind the above position, we now proceed to
examine as to which of the impugned orders can be sustained or whether
both can be permitted to operate during pendency of the suit. However,
before doing so, we need to take note of the judgment rendered by the
Larger Bench in this very case on the issue of Trial Court exercising mere
discretion or making a prima-facie adjudication while deciding application
for temporary injunction and the scope of appeal against an order deciding
application for temporary injunction. The Larger Bench, by judgment
dated 28 April 2025, authored by one of us (the Chief Justice) has answered
the reference in following terms :-
31. For the aforementioned reasons, the questions referred to us are
answered as follows:
(i) The Division Bench decision of this Court in COLGATE
PALMOLIVE COMPANY (SUPRA) sets out the correct principle
of law. An order of temporary injunction does not cease to be a
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restraint order. It correctly holds that in the matter of temporary
injunction, the Court does not adjudicate on the subject matter or
any part of it on merits and considers the application for
temporary injunction in the light of well-known principles and
exercises its discretion weighing all relevant consideration
without any expression of opinion on merits of the matter. The
Division Bench has rightly held that the decisions of this Court in
HIRALAL PARBHUDAS (SUPRA) and M/S. NATIONAL
CHEMICALS AND COLOUR CO. (SUPRA) have no relevance
while deciding an appeal arising out of an order of injunction.
(ii) The scope and ambit of an appeal from an order passed by the
trial Judge has already been delineated by the Supreme Court in
WANDER LTD. (SUPRA), SHYAM SEL AND POWER
LIMITED (SUPRA) and RAMAKANT AMBALAL CHOKSI
(SUPRA). In view of aforesaid enunciation of law by Supreme
Court, it is evident that the appellate court will not interfere with
exercise of discretion of Court of first instance and substitute its
own discretion except where the discretion has been shown to
have been exercised arbitrarily or capriciously or perversely or
where the Court had ignored the settled principles of law
regulating grant or refusal of interlocutory injunctions. The
Appellate Court while deciding an appeal, has to examine
whether the discretion exercised is not arbitrary, capricious or
contrary to the principles of law and the appellate Court may, in a
given case, has to adjudicate on facts even in such discretionary
orders.
(emphasis added)
24) It is thus held by the Larger Bench that an order of temporary
injunction continues to be a discretionary order even though the Trial
Court may enquire into existence of prima-facie case, and while doing so,
touch upon the merits of the issues. It is held that the Court deciding
application for temporary injunction does not adjudicate on the subject
matter on merits and decides the application in the light of well known
principles, as well as by exercising its discretion without any expression of
opinion on the merits of the matter. The Larger Bench has further held that
the Appellate Court, while deciding the Appeal from Order, cannot
interfere with exercise of discretion by the Court of first instance and
substitute its own discretion, except in case where discretion is found to be
exercised arbitrarily, capriciously or perversely or where the Court has
ignored the settled principles of law regulating grant of interlocutory
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applications. The Larger Bench has discussed the ratio of the judgment of
the Apex Court in well-known case of Wander Ltd. (supra) which is
followed in subsequent judgments in Shyam Sel & Power Ltd. Versus.
Shyam Steel Industries Ltd.56 and Ramakant Ambalal Choksi Versus.
Harish Ambalal Choksi57. However, for ease of reference, we extract the
findings in Para 14 of the judgment in Wander Ltd. as under :-
14. The appeals before the Division Bench were against the exercise of discretion
by the Single Judge. In such appeals, the appellate court will not interfere with
the exercise of discretion of the court of first instance and substitute its own
discretion except where the discretion has been shown to have been exercised
arbitrarily, or capriciously or perversely or where the court had ignored the
settled principles of law regulating grant or refusal of interlocutory injunctions.
An appeal against exercise of discretion is said to be an appeal on principle.
Appellate court will not reassess the material and seek to reach a conclusion
different from the one reached by the court below 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. If the discretion has been exercised
by the trial court reasonably and in a judicial manner the fact that the appellate
court would have taken a different view may not justify interference with the trial
court’s exercise of discretion. After referring to these principles Gajendragadkar,
J. in Printers (Mysore) Private Ltd. v. Pothan Joseph [(1960) 3 SCR 713 : AIR 1960
SC 1156] : (SCR 721)
“… These principles are well established, but as has been observed by
Viscount Simon in Charles Osenton & Co. v. Jhanaton [1942 AC 130]
‘…the law as to the reversal by a court of appeal of an order made by a
judge below in the exercise of his discretion is well established, and any
difficulty that arises is due only to the application of well settled
principles in an individual case’.”
The appellate judgment does not seem to defer to this principle.
(emphasis added)
25) Thus, in one of the Appeals before us, the broad scope of
interference by the Appellate Court into the order passed by the Court of
first instance, granting or refusing to grant temporary injunction, has been
outlined and we accordingly proceed to decide correctness of the two
impugned orders by keeping in mind the contours of our jurisdiction as
delineated in the judgment of the Larger Bench.
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Single Judge has dismissed Notice of Motion No.993/2009 filed by UTO
seeking temporary injunction against Tilaknagar inter alia from
manufacturing and selling products under the impugned marks.
E.1 FRAME OF UTO'S SUIT 27) We now proceed to examine the exact frame of UTO's suit. UTO's
suit is for passing off coupled with infringement of copyrights in label.
UTO’s suit is not for infringement of marks ‘MANSION HOUSE’ or
‘SAVOY CLUB’ by the Defendant-Tilaknagar. Holistic reading of the
plaint filed in UTO’s suit would indicate that the same is premised on the
contention that Tilaknagar is a mere licensee of UTO’s trademarks
Mansion House and Savoy Club. The Plaint then proceeds on the footing
that UTO has terminated Tilaknagar’s license on account of alleged
breaches committed by Tilaknagar in failing to purchase the concentrates
from UTO and that therefore UTO is entitled to restrain Tilaknagar from
manufacturing and/or selling its products under the impugned marks in
India. It is UTO’s case in the Plaint that despite execution of the two
ceding letters of 1987, Tilaknagar continued to be the licensee of UTO.
This is borne out from the following pleadings in the Plaint:-
Plaintiffs submit that Defendant has all along been the licensee of
the Plaintiff No. 1 and cannot, therefore claim to be the adopter
and/or owner of the trademarks “MANSION HOUSE”, “MH”,
“MHB” and “SAVOY CLUB” or the owner of the copyright in the
labels of the Plaintiffs’. Plaintiff No. 1 respectfully submits that the
conduct of the Defendant has always been that of a licensee.
Plaintiffs submit that the Defendant has always been aware and
accepted at all times, before and after the 1987 agreements that thePage No.39 of 83
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known and reputed trademarks and labels when they fraudulently
claimed to be proprietors of the trademarks and owners of the
copyright in the impugned labels by filing applications for
registration of the trade marks “MANSION HOUSE”, “MH”,
“MHB” and “SAVOY CLUB”.
(emphasis added)
28) Plaintiff also seems to have suggested through the pleadings in
the Plaint that though the act of ceding of the marks may have taken place
in the year 1987, Tilaknagar did not acquire any title in the marks and
UTO always remained the proprietor thereof. This is borne out from the
following pleadings in the Plaint:-
The arrangement regarding the ceding of the marks to the
Defendants was conditional and upon the Defendants failing to
comply with the conditions, the said arrangement stood
terminated. The conditions subsequent were not fulfilled and the
Defendants did not and could not acquire any proprietors rights in
the said Marks and Labels marks. In any event, it is submitted that
the Defendants have subsequently acknowledged for that they were
the licensees. The Defendants having requested Plaintiff No.1 to
assign the marks are estopped from claiming any proprietary rights
in the said marks or label marks. Plaintiff No.1 always remained
the proprietors of the said marks and label marks.
(emphasis added)
29) Thus, the broad frame of UTO’s Suit is that it continues to
remain the proprietor of the impugned trademarks and that Tilaknagar was
always its licensee. So far as the ceding letters of 23 February 1987 are
concerned, UTO has pleaded that the assignment of marks never took
place in favour of Tilaknagar as the conditions stipulated in the ceding
letters were never fulfilled. The pleaded case is thus that the assignment
was conditional and that since there was breach of conditions, the
arrangement stood terminated.
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E.2 FINDINGS RECORDED BY THE LEARNED SINGLE JUDGE
30) Though not specifically pleaded in the Plaint, UTO argued
before the learned Single Judge, while pressing its application for
temporary injunction, that the word ‘cede’ in the present case meant grant
of mere licence. However, the learned Single Judge has rejected the case of
UTO that the intention of the parties while executing the two ceding letters
of 1987 was to merely grant a license in respect of the impugned marks.
The learned Judge then proceeded to reject UTO’s contention of absence
of any reason for assignment of the marks to Tilaknagar without any
consideration and held that the act of assignment was made by UTO to
protect it against any consequences arising out of the judgment of the
Dutch Court. The learned Judge also held that there was agreement for
purchase of concentrates by Tilaknagar. The learned Judge has accordingly
held that there was consideration for transferring the marks to Tilaknagar.
The learned Judge thereafter proceeded to hold that the two ceding letters
of 23 February 1987 formed a composite transaction and the UTO did
infact transfer title in the marks to Tilaknagar by the said letters. This is
how the learned Judge has repelled the case sought to be set up by UTO
that Tilaknagar continued to remain a licensee in respect of the impugned
marks despite ceding letters of 1987.
31) The learned Judge thereafter went into the alternative case
pleaded by the Plaintiff of title in respect of the marks being retained with
UTO on account of breaches committed by Tilaknagar in not procuring
concentrates from UTO. The learned Judge also considered conduct and
correspondence between the parties to arrive at a finding that for a period
of 14 long years from 23 February 1987 till 13 November 2002, UTO
always proceeded on the basis that Tilaknagar was the owner and
proprietor of the marks in question and that UTO never asserted its title in
respect of the marks at any point of time which conduct was consistent
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with the transaction of assignment/transfer of the marks. The learned
Judge has thereafter held that there was no breach on the part of
Tilaknagar in procurement of concentrates primarily on account of non-
fixation of price in letters of 1983, 1987 and 1997. Assuming that there
was breach, the learned Judge held that UTO had abandoned/relinquished
its right in respect of the marks in favour of Tilaknagar and had acquiesced
in Tilaknagar using the marks. This is how the learned Judge held that
transfer/assignment of the marks in favour of Tilaknagar was complete
upon execution of the ceding letters and that the same was not dependent
upon any further act or deed on the part of any of the parties. While
recording the above findings, the learned Judge has taken into
consideration, the effect of the letter dated 21 October 1997 jointly signed
by both the parties by treating it as a mutual mistake of perception by
overlooking the existence and effect of the ceding letters of
23 February 1987.
32) The learned Judge thereafter formulated the question in para-
86 of the judgment about reversion of title in the marks in favour of UTO
on account of alleged breaches committed by Tilaknagar. The learned
Judge then held that UTO’s action of not preventing Tilaknagar from
manufacturing and selling the products under the impugned mark for 14
long years exhibited abandonment of rights under the letters of
23 February 1987, especially the right to have Tilaknagar purchase the
concentrates from UTO. The learned Judge has essentially held that UTO
abandoned its right under the second ceding letter dated 23 February 1987
of Tilaknagar purchasing concentrates from it and since the right itself was
abandoned, there was no question of any breach being committed by
Tilaknagar and therefore the question of reversion of title in the marks in
favour of UTO did not arise. Lastly, the learned Judge considered the
position that Tilaknagar continued using the marks adverse to UTO’s right
for considerable period of time. On above broad findings, the learned
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Judge in the first order, proceeded to dismiss UTO’s application to
temporarily restrain Tilaknagar from manufacturing or selling products
under the impugned marks in India.
33) The learned Judge has thus refused to accept UTO’s pleaded
case of Tilaknagar remaining a mere licensee in respect of the marks. The
learned Judge, in the first impugned order, has recorded following broad
prima-facie findings:-
(i) Tilaknagar did not remain a mere licensee after execution of
ceding letters of 23 February 1987.
(ii) Assignment of marks did take place in Tilaknagar’s favour
upon execution of the ceding letters of 23 February 1987.
(iii) UTO’s case of reversion of title in the marks on account of
alleged breaches has not been accepted by the learned Single
Judge by holding that there is no breach of promise by
Tilaknagar in procurement of the concentrates, on two counts
of non-fixation of price for purchase of concentrates and
UTO abandoning its right to have the concentrates purchased.
(iv) UTO did not object to Tilaknagar using the marks for several
years and that therefore no case was made out for temporarily
injuncting Tilaknagar from using the marks during pendency
of the suit.
E.3 GIST OF UTO'S CASE 34) During the course of hearing of the Appeal, lengthy
submissions are canvassed before us on behalf of UTO and Tilaknagar and
reliance is placed on dozens of judgments. Keeping in mind the contoursPage No.43 of 83
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refusing to grant temporary jurisdiction, in our view, it would not be
prudent to record our findings on each of the submissions by dealing with
ratio of all the judgments cited. From submissions canvassed on behalf of
UTO, following is the gist of UTO’s case in support of its prayer for
temporary injunction before us :-
(i) That the ceding letters of 23 February 1987 merely granted
license in favour of Tilaknagar.
(ii) That even if ceding letters of 23 February 1987 are to be
construed as a transfer or assignment of the marks, such
transfer/assignment was conditional and that upon breach of
conditions of transfer, the title in respect of the marks has
reverted to UTO.
(iii) That after reversion of ownership in the marks to UTO,
Tilaknagar’s manufacture and sale of products in India
continued to be as UTO’s licensee, as acknowledged in
various correspondence, particularly in letter of
21 October 1997.
(iv) That since UTO’s cross border reputation is accepted by the
learned Single Judge, prima facie case was made out for grant
of temporary injunction against Tilaknagar for tort of passing
off.
(v) Tilaknagar always represented to consumers that it sold
products under advice of UTO and that therefore principles
of delay or acquiescence would not apply against UTO’s
claim for temporary injunction.
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constituting mere license is concerned, the learned Judge has rejected the
contention. UTO had executed a License Agreement in favour of
Tilaknagar on 7 July 1983 and if the license was already subsisting, there
was no occasion for UTO to again execute a fresh licence in the form of
letters dated 23 February 1987 in favour of Tilaknagar. By the first letter of
23 February 1987, UTO ‘ceded’ the marks ‘MANSION HOUSE’ and
‘SAVOY CLUB’ in favour of Tilaknagar which is explicitly clear from the
contents of the said letter which reads thus:
‘we hereby cede our brand names MANSION HOUSE and SAVOY
CLUB to Tilaknagar Distilleries’.
36) Having ceded the trademarks ‘MANSION HOUSE’ and
‘SAVOY CLUB’ in favour of Tilaknagar by first letter of 23 February 1987,
in our view, the case pleaded by the Plaintiff-UTO in its plaint that
Tilaknagar has always been a licensee, prima-facie, appears to be
completely misplaced. The learned Single Judge has rightly appreciated the
reason behind UTO ceding the marks in favour of Tilaknagar. UTO faced
order passed by the Dutch Court and desired not to be associated with the
marks in India and hence executed the first ceding letter dated 23 February
1987. However, instead of Tilaknagar selling the products under its marks,
UTO preferred the arrangement of selling its concentrates to Tilaknagar.
Thus, instead of monetizing the marks by issuance of license, UTO
apparently assigned the marks to Tilaknagar and preferred doing of
business of sale of concentrates with Tilaknagar. Whether the agreement
for purchase of concentrates is an independent agreement or whether such
agreement constituted the consideration for assignment is something which
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needs to be decided at the trial of the suit. We are however unable to trace
any element of perversity in the findings of the learned Single Judge in not
accepting UTO’s case of Tilaknagar remaining as its licensee post 1987
and in holding that the ceding letter of 23 February 1987 constitutes
assignment of the marks. Given the nature of adjudication we are tasked
upon to undertake, coupled with the limitations on our appellate
jurisdiction over an order refusing to grant temporary injunction, as
enunciated in the judgment of the Apex Court in Wander Ltd., we are not
inclined to interfere in the prima-facie findings recorded by the learned
Judge that the transaction vide letter dated 23 February 1987 constitutes
transfer/assignment of the marks.
E.5 UTO'S CASE OF REVERSION OF TITLE 37) As an alternative to the case of Tilaknagar always being a
mere licensee, UTO also pleaded and argued before the learned Single
Judge that the assignment either failed on account of breach of promise or
in any case the title reverted in UTO’s favour on account of such breaches.
This is the main plea of UTO before us.
38) It must be observed here that both the impugned orders have
dealt with the issue of reversion of title and there is a some degree of
difference in approach while dealing with this vital issue in the two
impugned orders. It must also be observed that UTO believes that the first
impugned order merely records the argument of reversion of title, but does
not really decide the same, whereas it is Tilaknagar’s case that even the first
impugned order has decided and rejected UTO’s case of reversion of title.
This aspect is being dealt with while deciding the correctness of second
impugned order in latter part of the judgment.
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39) There is no dispute between the parties that in Para 86 of the
first impugned order, the issue of reversion of title was formulated by the
learned Single Judge for prima facie determination. Para 86 of the first
impugned order reads thus:
86. The question is whether, as contended by Dr. Tulzapurkar, the transfer or
assignment affected by the documents dated 23″ February 1987 ceased to have
effect in view of the alleged breaches by the Defendant of its obligations
thereunder.
As of now, we are not deciding the controversy as to whether the above
question is decided in the first impugned order or not, which is being
discussed in latter part of the judgment. However, for limited purpose of
determining correctness of findings recorded on the issues of breach of
promise, acquiescence and abandonment, we extract few findings in the
first impugned order as under:
88. ….. What is, however, more important is that their failure to do so indicates that
they had abandoned their rights under the documents dated 23″ February, 1987,
especially the right to have the defendant purchase the concentrates from them and to
use the same in the products sold under the said marks…..
Whatever be the reasons, the fact is that the plaintiffs from the year 1994 to 2003
permitted the defendant to sell their products under the said marks without, in turn,
insisting upon the defendant fulfilling the terms and conditions thereof in favour of
the plaintiffs. The alleged breaches by the defendant of the documents dated
23″ February, 1987, were, therefore, waived by the plaintiffs.
89. Thus, even assuming that the defendant was guilty of a breach of it’s obligations
under the document dated 23″ February, 1987, or the document dated 7″ July, 1983,
it would make no difference whatever. In fact, it is difficult to hold that the defendant
was guilty for not having purchased the concentrates from the plaintiffs. ……
Even assuming that there was a breach on the part of the defendant in manufacturing
and selling its products under the said marks without using the concentrates, the
correspondence indicates quite clearly that the plaintiffs had abandoned their rights to
have the same enforced and simultaneously permitted the defendant to use the
trademarks on such products without any objection whatever, at least unto 7″
August, 2003.
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91. During this period, the plaintiffs appear to have lost interest in enforcing their
rights under any of the said documents, leading to at least a strong prima facie con-
clusion that they relinquished their rights qua the said marks unconditionally in
favour of the defendant. They acquiesced in the defendant using the marks without
any condition, including those stipulated in the said documents…..
98. …… As I have held earlier, the defendant’s contention that the marks were trans-
ferred to it, cannot be said to be dishonest for it is, to say the least, a probable view
that the documents dated 23″ February, 1987 transferred and assigned the
marks to the defendant.
100. Dr. Tulzapurkar contended that due to the defendant’s breach of the
terms and conditions of the document dated 23rd February, 1987, the transfer
of the marks to the defendant came to an end and that thereafter the
defendant was only a licensee and that thereafter the use of the said mark by
the defendant was only as a licensee. The submission is erroneous. This
approach was adopted obviously as a preface of a detailed argument before me on the
basis that the marks had been licenced by the plaintiffs to the defendant.
(emphasis and underlining added)
This is how the contention of UTO formulated in para 86 of the judgment
about reversion of title in the marks on account of breaches committed by
Tilaknagar has been dealt with by the learned Single Judge. While doing
prima facie adjudication of UTO’s case, the learned Single Judge has held
that UTO abandoned the right to have the concentrates purchased by
Tilaknagar and therefore there is no question of any breach being
committed by Tilaknagar. What must also be borne in mind is that though
the issue of reversion of title was raised by UTO before the learned Single
Judge while passing the first impugned order, the whole thrust of UTO was
that Tilaknagar continued to be its licensee. During the first round of
determination of prima facie case, the argument of reversion was essentially
aimed at establishing Tilaknagar’s use of the marks as licensee. This was
apparently necessary because mere establishment of proprietorship in the
marks was not enough for UTO as it had permitted Tilaknagar to use the
impugned marks unhindered by any objection for several years and
therefore UTO apparently thought it necessary to prove that such use by
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remaining as UTO’s licensee while dealing with the issue of reversion of
title.
40) Since UTO was pressing for temporary injunction to restrain
Tilaknagar from manufacturing and selling the products in India under the
impugned marks, the learned Single Judge has concentrated more on
UTO’s conduct in not objecting to Tilaknagar’s manufacture and sell of
products without procuring concentrates from UTO for decades. While
deciding UTO’s application for temporary injunction, the most vital aspect
to be borne in mind was the balance of convenience. The learned Single
Judge encountered a situation where UTO did not object to Tilaknagar’s
use of the marks for several years, and this was considered to be a major
factor for declining temporary injunction in favour of UTO. We do not find
any palpable error in this approach of the learned Single Judge.
41) Coming back to the issue of reversion of title, the first
impugned order is criticized by UTO by contending that the learned Single
Judge has erred in holding that there are no breaches on the part of
Tilaknagar. It is contended on behalf of UTO that there are judicial
admissions of breach committed by Tilaknagar in the Written Statement.
The pleadings in para-43 of Tilaknagar’s Written Statement are relied upon
which read thus :-
43. …. The Defendant further says and submits that Plaintiff No.
1, despite the Defendant’s failure to purchase from Plaintiff No.1
agreed volume of concentrate since the beginning, did not ever
terminate the Agreement dated 23rd February 1987 or call upon the
Defendant to cede/assign the said trademarks to Plaintiff No.1.
The Defendant says and submits that on the contrary Plaintiff No.1
by its conduct and/or subsequent writings signified his
acquiescence in continuation of the Defendant’s proprietorship of
the said trademarks despite the Defendant’s refusal to perform his
promise. ….
(emphasis and underlining added)
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42) By relying on the above pleadings in the Written Statement, it
is contended that there are two admissions about :-
(i) Tilaknagar’s failure to purchase agreed volume of
concentrates, and
(ii) Tilaknagar’s refusal to perform its promise.
It is therefore contended that Tilaknagar has admitted non-procurement of
concentrates, as well as refusal to perform the promise. Reliance is placed
on the judgment of the Apex Court in Nagindas Ramdas (supra) in which
it is held that admissions in pleadings or judicial admissions stand on a
higher footing than evidentiary admissions and that the judicial
admissions, being fully binding on the parties making them, constitutes a
waiver of proof. So far as the first admission of failure to purchase
concentrates by Tilaknagar from UTO is concerned, there is not much
debate between the parties and as of now, it appears to be an admitted
position that Tilaknagar did not and has not been purchasing concentrates
from UTO. The issue here is whether non-purchase of concentrates from
UTO by Tilaknagar would automatically revive UTO’s title in the marks in
favour of UTO. What is being sought by UTO, by relying upon pleadings
of Tilaknagar in para-43 of the Written Statement, is establishing a link
between Tilaknagar’s refusal to perform promise under the second ceding
letter of 23 February 1987 with reversion of title in the marks in favour of
UTO. This so-called admission in para-43 of the Written Statement needs
to be understood in the context in which it is made, as well as the same
needs to be considered from the point of argument of reversion of title
sought to be raised by UTO. The pleadings in para-43 of the Written
Statement are made by Tilaknagar in support of its plea of acquiescence.
Even in that pleading, Tilaknagar has asserted its proprietorship of the
marks by contending that ‘in continuation of the Defendants proprietorship
in the said trademarks’. Therefore, the alleged admission of refusal to
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perform promise by Defendant cannot be read in the context of UTO’s
case of reversion of title in the marks. The said admission may be relevant
in an action brought by UTO for breach of promise to purchase
concentrates contained in the second ceding letter of 23 February 1987.
Prima facie, it is difficult to marry the said admission to UTO’s case of
reversion of title.
43) It is the case of Tilaknagar that the two letters of
23 February 1987 constituted two separate and independent transactions,
the first transaction being assignment of trademarks whereas second
transaction being only for purchase of concentrates. The learned Judge has
however prima-facie held that the letters constitute a composite transaction.
The said finding is however recorded while dealing with UTO’s submission
that the transaction continued to be that of licence. The learned Judge,
upon analysis of the two letters, has held that the letters dated
23 February 1987 constitute assignment of trademarks. The learned Judge
has further held that promise to purchase concentrates was the
consideration to support the transaction of transfer/assignment of the
marks. The learned Judge has thus interlinked the two letters of
23 February 1987 and has, in that sense, not accepted Tilaknagar’s case
that the second ceding letter of 23 February 1987 constituted a distinct or
independent transaction. After interlinking the two letters as a part of
composite transaction, the learned Judge has proceeded to consider
whether there was any breach on the part of Tilaknagar while considering
UTO’s claim of reversion of title.
44) The learned Judge has considered the position that it was
UTO’s own case that Tilaknagar stopped purchasing concentrates from the
year 1994 and has refused to grant temporary injunction in favour of UTO
on account of silence maintained by either not stopping Tilaknagar from
manufacturing or selling the products and in any case from not asserting its
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title in respect of the marks in question. In our view, while deciding the
issue of temporary injunction, conduct of the Plaintiff in not approaching
the Court at earliest possible point of time is of great significance. At this
stage, it is not necessary for us to decide whether there was actual breach of
any promise on the part of Tilaknagar relatable to the issue of reversion of
title and whether the title actually reverted in favour of UTO. What is
relevant to note and what is rightly been taken into consideration by the
learned Single Judge is the silence maintained by UTO for a considerable
period of time in not stopping Tilaknagar from manufacturing and selling
products under the brand names ‘MANSION HOUSE’ and ‘SAVOY
CLUB’ without purchasing any concentrates from UTO. The learned
Judge has rightly taken into consideration this conduct on the part of UTO
to deny discretionary relief of temporary injunction. Applying the tests in
Wander Ltd. (supra), we do not find that the discretion exercised by the
learned Judge is arbitrary or capricious or against the settled principles of
law governing temporary injunctions, for the Appellate Court to interfere
in the first impugned order.
45) The order of the learned Single Judge is sought to be criticised
by UTO by contending that the principle of acquiescence and waiver has
been erroneously invoked for the purpose of not accepting UTO’s case of
reversion of title. Reliance is placed by UTO on judgment of the Apex
Court in M/s. Power Control Appliances Versus. Sumeet Machines Pvt.
Ltd. (supra) in support of the contention that mere silence or inaction does
not constitute waiver or acquiescence. Judgment in M/s. Hindustan
Pencils Private Limited (supra) is also relied upon in support of the
contention that acquiescence means something more than silence on the
part of the Plaintiff. The judgments of this Court in D. R. Cosmetics Pvt.
Ltd. (supra) and Emcure Pharmaceuticals Ltd. (supra) are also relied
upon in support of the same proposition. In our view, the aspect of
conduct of the Plaintiff in not taking any steps to stop Tilaknagar from
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manufacturing and selling products without purchasing concentrates from
UTO is to be considered for twin purposes. The first purpose is to decide
whether UTO deserved grant of any temporary injunction in a belated
action brought in by it against Tilaknagar. The second purpose is to
examine whether the alleged breach committed by UTO constituted
acquiescence or waiver so as not to revert title in the marks in favour of
UTO. In our view, the conduct of the Plaintiff in maintaining silence for a
considerable period of time of 14 years as held by the learned Single Judge
is most relevant for the purpose of exercising discretionary jurisdiction of
grant of temporary injunction. So far as the second issue of reversion of
title is concerned, the same can await final decision of the Suit. However,
in our view, the learned Judge has rightly refused to grant temporary
injunction in favour of UTO by considering its conduct of maintaining
silence for over 14 years.
E. 6 REVIVAL OF LICENSE BY LETTER OF 21 OCTOBER 1997 46) Coming to the third contention of letter of 21 October 1997
reviving the license arrangement between the parties, the learned Judge has
considered execution of the said letter as a mutual mistake. In the said
letter of 21 October 1997, signed by both UTO and Tilaknagar, reference is
made to the earlier license of 7 July 1983 and the said letter of
21 October 1997 is completely silent about the two ceding letters of
23 February 1987. UTO contends on the basis of letter dated
21 October 1997 that the parties never understood the transaction of
assignment of the marks in favour of Tilaknagar through letters of
23 February 1987 and they always intended the transaction to be a mere
license right since 1983. We have already upheld the prima-facie findings of
the learned Single Judge rejecting UTO’s case of transaction between the
parties from the very beginning to be a mere license and that the two
ceding letters of 23 February 1987 constitute transfer/assignment of the
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marks. Once no fault is found in the prima-facie findings of the two ceding
letters of 23 February 1987 constituting a transaction of
transfer/assignment of marks, the issue of considering the effect of letter
dated 21 October 1997 becomes academic. However, the learned Judge has
still proceeded to hold that since the letter dated 21 October 1997 was
executed in ignorance of the ceding letters of 23 February 1987, the same
was a mutual mistake on the part of the parties. We do not find any
element of perversity in this plausible prima facie finding recorded by the
learned Single Judge. The learned Judge has rightly disbelieved Plaintiff ‘s
pleaded case of transaction between the parties being a mere license since
beginning and has rightly arrived at a prima-facie conclusion that the letters
of 23 February 1987 constitute transfer/assignment of the marks. We
therefore need not delve any deeper into the issue of the exact effect of the
letter dated 21 October 1997. We are therefore not discussing the ratio of
the judgment in Grasim Industries Limited (supra) relied upon by UTO
in support of the contention of legal effect of parties signing the document.
E. 7 UTO’S ENTITLEMENT TO TEMPORARY INJUNCTION IN ACTION FOR
PASSING OFF BASED ON CLAIM OF CROSS BORDER REPUTATION.
47) On this issue, both the contesting parties are in appeal before
us. Tilaknagar is aggrieved by findings of UTO’s cross border reputation
recorded by the learned Single Judge, whereas UTO is aggrieved by non-
grant of temporary injunction despite proving transborder reputation in
India. To the extent of findings of cross border reputation of UTO in
India, Tilaknagar has filed cross objections.
48) As observed above, UTO’s suit is not for infringement of
trademarks. It is for passing off and infringement of copyright in the labels.
Both parties claim proprietorship in the impugned marks. To seek common
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law remedy of passing off, it was necessary for UTO to establish its
goodwill in India, where it is seeking restraint order against Tilaknagar.
49) However, the manner in which the application for temporary
injunction was pressed before the learned Judge by UTO, it appears that
UTO premised its claim as if it is suit against Tilaknagar in respect of its
claim of title. The whole case of UTO, as argued before the learned Single
Judge, is as if UTO is a proprietor of the marks and Tilaknagar has been
committing breaches of the license and therefore needed to be injuncted.
Perusal of the plaint filed by UTO would indicate that its claim of
goodwill in India is not well supported by the pleadings. In the plaint,
UTO has mainly relied upon its reputation in respect of the marks in
question outside India and in various parts of the country of the world.
The plaint proceeds on a footing that the products with the marks were
introduced in India by Tilaknagar after execution of license of 1983.
Otherwise, UTO relied upon its sales figure outside India in support of its
claim for goodwill. The only statement in the plaint about Indian citizens
knowing about impugned marks is found to be in para-17 where it is
pleaded that tourists from India visited places in countries where UTO’s
products under the marks were available. UTO therefore pleaded that the
marks were therefore known and popular all over the world, including
India.
50) Thus, UTO’s claim of passing off has been built in the plaint
essentially on the strength of its sales outside India and reputation and
goodwill generated outside India, which according to UTO travelled to
India and was known to Indians on account of tourists visiting the places
where UTO’s products were available. The learned Single Judge has
accepted the case of UTO of cross-border reputation by holding that if
UTO did not have any reputation, Tilaknagar would not have secured its
license. While Tilaknagar does not really dispute existence of goodwill of
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UTO in various other countries, it is Tilaknagar’s case that UTO must
establish sales in India to prove its reputation and goodwill for passing off
action. According to Tilaknagar, mere existence of cross-border reputation
would not be sufficient for proving the actionable claim of passing off. On
the other hand, it is the contention of UTO that establishment of goodwill
outside India is also sufficient for action of passing off, so long as it is
proved that the customers in India had knowledge about UTO’s products
being sold outside India. Mr. Kadam has relied upon judgments of the
Apex Court in Toyota Jidosha Kabushiki Kaisha (supra) and Brihan
Karan Sugar Syndicate Private Limited (supra) in support of the
contention of requirement of proving actual sales in India for existence of
reputation. On the other hand, Mr. Khambatta has relied upon judgments
in N. R. Dongre Versus. Whirlpool Corporation (supra), Daiwa
Pharmaceuticals Co. Ltd. (supra) and Milmet Oftho Industries and
others Versus. Allergan Inc.58, in addition to several other judgments, in
support of the contention that actual sales in India is not the test for
establishing transborder reputation and goodwill. In our view, it is not
necessary to delve deeper into this aspect at this juncture since we have
recorded a finding that Plaintiff-UTO is not entitled to temporary
injunction on account of silence maintained by it by letting Tilaknagar
manufacture and sell its products under the impugned marks for a
considerable period of time. The issue of existence of cross-border
reputation and goodwill and requirement of proving sales in India for
establishing such reputation and goodwill can be decided at the time of
final hearing of the suit.
51) We are therefore not inclined to disturb the prima facie finding
of UTO’s cross border reputation recorded by the learned Single Judge by
allowing the cross objections filed by Tilaknagar. Similarly, we are not
inclined to disturb non-grant of temporary injunction by the learned Single
58 (2004) 12 SCC 624
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Judge in favour of UTO despite recording the finding of cross border
reputation in its favour.
E.7 UTO’S CASE OF PERMISSIVE, ALTERNATIVELY DISHONEST, USE OF
MARKS BY TILAKNAGAR
52) Faced with the situation that UTO did not take any steps to
injunct Tilaknagar from using the marks for several years despite
Tilaknagar failing to purchase the concentrates, UTO has attempted to
salvage the situation by contending that Tilaknagar always made UTO
believe that it was selling UTO’s products in India. Alternatively, it is
contended that Tilaknagar’s use of the marks is dishonest and mere
passage of time is not an answer to deny injunction in favour of the owner
against a dishonest user.
53) Reliance is placed by UTO on various letters exchanged
between the parties and their conduct in support of its claim of
continuance of use of marks by Tilaknagar with permission of UTO. It is
contended on behalf of UTO that the whole basis for assuming
acquiescence/waiver on the part of UTO is erroneous as Tilaknagar’s
conduct, as well as the correspondence that ensued between the parties
after 1997, leaves no manner of doubt that Tilaknagar always represented
UTO that it was selling UTO’s products in India. Reliance is placed on
letter dated 21 October 1997 which has already been dealt with
hereinabove. By that letter, Tilaknagar promised to purchase specified
minimum quantities of concentrates. Reliance is then placed on the fact
that the labels used by Tilaknagar on their products continued to bear the
statement ‘under technical advice of B.V. Utomji, Holland’. That this
representation was made by Tilaknagar to the customers admittedly till the
year 2002 and possibly till the year 2008. Reliance is then placed on letters
dated 21 January 2002, 4 February 2002, 28 June 2002, 8 July 2002,
1 October 2002, 16 October 2002, 23 October 2002 etc. in support of the
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contention that the said correspondence clearly indicates Tilaknagar’s
eagerness to purchase concentrates from UTO thereby creating a belief in
the mind of UTO that Tilaknagar was selling its products in India.
Reliance is placed on the fact that Tilaknagar placed order with UTO for
purchase of more than 3,000 liters of concentrates on 29 October 1997. It
is sought to be contended that both the above conduct, as well as
correspondence, has been ignored by the learned Single Judge while
passing the first impugned order.
54) In our view, the correspondence and conduct of the parties
needs to be viewed in the light of frame of UTO’s suit. UTO has claimed
in its Suit that it remained the proprietor of the marks and Tilaknagar
never acquired title therein. Alternate case of UTO is that the title in the
marks reverted in UTO’s favour because of breaches committed by
Tilaknagar. Thus, UTO’s suit is premised fully on alleged breaches
committed by Tilaknagar, either of licence or of promise which allegedly
was the superadded condition for assignment. Having pleaded the case of
breach, can UTO set up the alternate case of permissive use for saving
itself of consequences of silence maintained by it in not suing Tilaknagar
for several years? The answer, to our mind, appears to be in the negative,
particularly viewed in the light of UTO’s claim for temporary injunction.
55) Tilaknagar’s conduct of either expressing willingness to
purchase concentrates from UTO or placing an order for such purchase
may not really have any bearing on UTO’s claim of reversion of title. It is
UTO’s plea that the title stood reverted upon commission of breach of
promise by Tilaknagar. Therefore, the subsequent correspondence of 2002
becomes irrelevant for the purpose of proving UTO’s case of reversion of
title. If indeed the title had reverted either in 1987 itself or in 1994 when
Tilaknagar admittedly stopped purchasing the concentrates, why UTO did
not bring in action to injunct Tilaknagar at that point of time is difficult to
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fathom. Mere willingness on the part of Tilaknagar to purchase
concentrates from UTO in subsequent years cannot provide an escape
route for UTO in respect of the consequences arising out of silence
particularly in relation to its relief of temporary injunction. Tilaknagar’s
alleged representation to its customers in India about products being sold
under technical advice of UTO is again not of much relevance for deciding
UTO’s entitlement for temporary injunction. What is relevant to be
considered is Plaintiff ‘s pleaded case in the plaint that it continued to
remain owner of the marks in question on account of 1987 letters
constituting license or on account of reversion of title in the marks because
of Tilaknagar’s breach of promise. If UTO remained a registered
proprietor of the marks in question and it noticed that Tilaknagar was
freely manufacturing and selling its own products under the two marks
‘MANSION HOUSE’ and ‘SAVOY CLUB’, it ought to have sued
Tilaknagar at earliest point of time and sought an injunction against it.
56) Turning to the alternative plea of UTO of dishonest use of
marks by Tilaknagar, the case does not involve admission of UTO’s
ownership of title in the marks by Tilaknagar. On the contrary, Tilaknagar
has staked ownership in the marks based on the letter dated 23 February
1987. Tilaknagar believes that it is the owner of the marks upon execution
of letter of 23 February 1987. Its use of the marks after 1987 stems out of
the belief that it acquired title in the marks. This belief of Tilaknagar was
never questioned by UTO and it took 22 long years for UTO to file suit
claiming ownership in the marks. Therefore, the case does not involve
surreptitious passing off products by Tilaknagar under the marks. On the
other hand, the case involves dispute about title of the marks and nature of
transaction between the parties. Prima facie therefore Tilaknagar’s use of
the marks cannot be treated as dishonest for ignoring the silence on the
part of the UTO in not suing Tilaknagar at the earliest point of time. Mr.
Khambata has cited several judgments in support of contention that the
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shield of long user is not an answer to dishonest user. Since we are prima
facie of the view that the use of Tilaknagar is not dishonest, we are not
burdening the judgment by discussing the ratio of those judgments,
particularly since we are deciding an appeal against order arising out of
provisions of Order XXXIX Rules 1 and 2 of the Code.
57) In M/s Power Control Appliance Versus. Sumeet Machines
Pvt. Ltd. (supra) it is held by the Apex Court that equitable relief of
injunction can be denied in case involving unexplained delay and where
the balance of convenience is overwhelmingly in favour of Defendant. The
learned Single Judge has analyzed the conduct of UTO in para 95 of the
judgment as under :-
The facts of the present case establishes that the plaintiffs acquiesced in
the defendant using the marks. The plaintiffs sat by while the defendant
did so and spent money on it. The defendant’s conduct in the present case
is also consistent with the claim of exclusive rights in the said marks. In
the course of the correspondence, it stoutly denied the plaintiffs’ claim to
the said marks, asserted its rights in respect thereof and continued to use
the marks as the proprietor thereof. Even in response to the letter of
termination, the defendant contended that it was entitled to use the
marks. The plaintiffs stood by knowingly and let the defendant build up
an important trade. It is only thereafter, that the plaintiffs thought it
necessary to adopt proceedings to crush the same. For a crucial period,
the plaintiffs acquiescence virtually amounted to their consenting to the
defendant’s using the said marks. The plaintiffs do not state that they
were ignorant of the fact that they had a rights in respect of such marks
as well as the means to assert the same.
(emphasis added)
58) As rightly held by the learned Single Judge, UTO permitted
Tilaknagar to build a huge trade in India unhindered by any objection or
action initiated by UTO. By this conduct, UTO permitted the customers in
India to believe that the product that they were purchasing is of Tilaknagar.
It permitted Tilaknagar to build goodwill and reputation of the products
without using UTO’s concentrates. It did not object to Tilaknagar
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developing its own recipes for the products. The conduct of UTO in siting
back and permitting Tilaknagar to develop its goodwill and independent
trade in India has rightly been considered as a factor against UTO by the
learned Single Judge and we do not find any manifest error in the same.
59) What must also be borne in mind is the fact that UTO is
without any injunction for the last 16 long years after filing of the suit in
the year 2009. Tilaknagar has been admittedly selling the products under
the impugned marks from 1987 without any restriction. By now, period of
38 long years has elapsed when Tilaknagar has been manufacturing and
selling the products under the impugned marks. As observed above, the suit
is kept pending by the parties for the last 16 long years, and it is necessary
that the same is taken up for final disposal at some point of time. If UTO is
without any injunction for the last 16 long years and when period of 14
long years has elapsed after dismissal of its Notice of Motion seeking
temporary injunction, we see no reason why any injuncting relief can now
be granted in favour of UTO at this distant point of time. Instead, it will be
in the interest of all the parties that the suit itself is taken up for decision in
an expeditious manner. This is yet another factor why we are of the view
that the first impugned order passed by the learned Single Judge on 22
December 2011 does not warrant any interference.
60) We are therefore not inclined to disturb the first impugned
order dated 22 December 2011 passed by the learned Single Judge
dismissing UTO’s motion for temporary injunction. In our view, therefore
UTO’s Appeal No.66/2012 as well as Tilaknagar’s cross objections deserve
dismissal.
Page No.61 of 83 16 July 2025 ::: Uploaded on - 16/07/2025 ::: Downloaded on - 16/07/2025 22:22:27 ::: Neeta Sawant COMAPL-6617-2025 with APP-66-2012-FC F. CORRECTNESS OF SECOND IMPUGNED ORDER DATED 7 FEBRUARY 2025 61) As observed above, though UTO's Notice of Motion seeking
temporary injunction came to be rejected by the first impugned order dated
22 December 2011, Notice of Motion No. 1287/2010 filed by Tilaknagar
in its Counterclaim No.6/2010 continued to remain pending. The said
Motion was moved before this Court on 10 September 2014 by Tilaknagar
after learning that UTO had assigned and transferred 50% of its purported
rights in the two marks to Defendant Nos.3 and 4 (ABD) to the
counterclaim. This Court however kept Tilaknagar’s Notice of Motion
No.1287/2010 pending by directing vide order dated 10 September 2014
that the Defendants to the counterclaim shall not introduce any products in
the subject trademarks without the leave of the Court. Though such leave
was granted by this Court to UTO and ABD on 10 September 2014, it
appears that they did not apply to this Court seeking leave for introduction
of their products in India for a considerable period of time. It is only on
20 June 2023 that ABD filed Interim Application (L.) No. 16999/2023
seeking leave of the Court for introduction of the products under the
trademark ‘MANSION HOUSE’ in the State of West Bengal in terms of
labels and registration secured by it. When the Interim Application (L) No.
16999/2023 came up for hearing, Tilaknagar apparently pressed its
pending Notice of Motion No.1287/2010 possibly because opposing the
prayers of UTO and ABD to introduce products in India also meant
restraining them from doing so, which was the relief claimed in pending
Notice of Motion No.1287/2010. The learned Single Judge has decided
Tilaknagar’s Motion for temporary injunction, as well as ABD’s Interim
Application by a common judgment and order dated 7 February 2025. The
learned Single Judge has dismissed Tilaknagar’s application for temporary
injunction and has allowed the Interim Application filed by ABD by
permitting it to introduce its products in the State of West Bengal under the
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mark ‘MANSION HOUSE’. Commercial Appeal (L) Nos. 6622 of 2025
and 6617 of 2025 are filed by Tilaknagar challenging the common
judgment and order dated 7 February 2025 to the extent of rejection of its
application for temporary injunction and also to the extent of grant of
relief in favour of ABD respectively.
62) While opposing Tilaknagar’s application for temporary
injunction and for pressing ABD’s application for introduction of goods in
the State of West Bengal, the UTO and ABD essentially pressed into
service the doctrine of reversion of title in the impugned marks by relying
on the provisions of Section 31 of the Transfer of Property Act. This
attempt was objected to by Tilaknagar contending that the issue of
reversion of title in favour of UTO has already been decided in the first
impugned order dated 22 December 2011 and that therefore it was not
open for UTO to once again agitate the very same issue.
63) It must be observed that UTO made a specific representation
before the learned Single Judge passing the second impugned order that ‘he
has submitted that ABD is not inviting any findings from this Court contrary
to the findings given in the said judgment dated 22.12.2011′. Thus, UTO as
well as ABD proceeded on a footing that the findings recorded in the first
impugned order dated 22 December 2011 remained binding qua the parties
subject to pendency of Appeal No.66/2012. In short, UTO and ABD did
not make any attempt, and in our view rightly so, to urge before the
learned Single Judge passing the second impugned order that there was
error in the first impugned order dated 22 December 2011.
64) Now that we have upheld the first impugned order dated
22 December 2011, the issue for consideration is whether the learned
Single Judge was justified in dismissing Tilaknagar’s motion for injunction
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and granting permission to ABD to introduce its products in West Bengal
under the mark MANSION HOUSE.
F. 1 WHETHER FIRST IMPUGNED ORDER DECIDES THE ISSUE OF
REVERSION OF TITLE
65) The hotbed of controversy between the parties before the
learned Single Judge passing the second impugned order was whether the
first impugned order decides the issues of reversion of title. This issue has
been discussed to some extent by us while determining the correctness of
the first impugned order.
66) Since UTO and ABD pressed the point of reversion of title
and since Tilaknagar raised the plea that the issue of reversion has already
been prima-facie decided in the first impugned order dated
22 December 2011, the learned Judge took up for consideration the issue
as to whether the said issue was indeed decided in the first impugned order
dated 22 December 2011. The learned Single Judge has held that though
the issue of reversion of title was framed in para-86 of the judgment dated
22 December 2011, no findings are recorded on that issue. It is held that
UTO’s application for temporary injunction was rejected on the grounds of
acquiescence, abandonment and waiver of right to enforce the conditions
in the letters dated 23 February 1987. The learned Judge has accordingly
concluded that the issue of reversion of title was required to be considered
and decided as the same would not conflict with the findings on transfer or
waiver in the first impugned judgment. The relevant findings recorded by
the learned Single Judge in the second impugned judgment are as under :-
127. Having perused the said Judgment dated 22nd December,
2011 passed by the learned Single Judge of this Court in UTO’s
Notice of Motion filed in these proceedings, I do not find that the
learned Single Judge of this Court has answered thePage No.64 of 83
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said Judgment. The learned Single Judge of this Court has not
rendered any finding on the effect of breach of condition on which
the marks were ceded. This upon holding that a proper
construction of the writings dated 23rd February 1987 shows that
the word ‘cede’ was used to transfer or assign the marks to
Tilaknagar and it did not mean a mere license. The findings of the
learned Single Judge in the said Judgment for rejecting the
application of UTO are on the grounds of acquiescence and what
the learned Single Judge calls abandonment and waiver of the right
to enforce the conditions in the writings dated 23rd February, 1987.
This is apparent from the various paragraphs of the said judgment
which have been relied upon by ABD. Thus, the issue of, whether
the transfer or assignment ceased to have effect in view of the
breaches by the Defendant of its obligations thereunder is required
to be considered as this will in my view not conflict with the
findings on transfer or waiver in the said Judgment dated 22nd
December, 2011.
(emphasis added)
67) Thus, the learned Judge passing the second impugned order
has held that though the issue was formulated in para-86 of the first
impugned order, the same has not been decided. We accordingly proceed
to examine whether the issue of reversion of title has indeed been decided
in the first impugned order of 22 December 2011. We have already culled
out some of the findings recorded in the first impugned order while
examining the approach of the learned Single Judge while deciding UTO’s
entitlement for temporary injunction. At the cost of repeating the exercise
of reproduction of some of those findings, we extract paragraphs 88 to 91
of the first impugned order for the purpose of deciding the controversy of
decision of issue of reversion of title in the first impugned order :-
88. During these sixteen years, the plaintiffs proceeded on the basis
that by the documents dated 23rd February 1987, the trademarks
had been transferred or assigned to the defendant. The plaintiffs
knew at least from the year 1994 that the defendant had not
purchased the concentrates from them. I have disbelieved the case
in paragraph 27 of the plaint regarding the defendant having
represented that it was manufacturing the products sold under the
said marks utilising the concentrates purchased from the plaintiffs
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therefore, clear to the plaintiffs that the defendant was
manufacturing products sold under the said marks contrary to the
terms and conditions of the arrangement contained in the
document dated 7th July, 1983 as well as the documents dated 23 rd
February, 1987. The plaintiffs did nothing to prevent the defendant
from doing so. Nor did the plaintiffs call upon the defendant to
cease and desist doing so. The inference is that the plaintiffs did not
do so as they had considered their having transferred or assigned
the marks to the defendant. What is, however, more important is
that their failure to do so indicates that they had abandoned their
rights under the documents dated 23rd February, 1987, especially
the right to have the defendant purchase the concentrates from
them and to use the same in the products sold under the said
marks. The reason for the plaintiffs not having even insisted upon
their rights is immaterial. However, the fact that they did not
enforce their rights or even insist upon the same from 1994 to the
year 2003 indicates a strong prima facie case in favour of the
defendant that this was due to the plaintiffs having lost interest in
the Indian market probably due to the economic scenario and the
laws regarding prohibition in India or the enforcement thereof
during that period. Whatever be the reasons, the fact is that the
plaintiffs from the year 1994 to 2003 permitted the defendant to sell
their products under the said marks without, in turn, insisting upon
the defendant fulfilling the terms and conditions thereof in favour
of the plaintiffs. The alleged breaches by the defendant of the
documents dated 23rd February, 1987, were, therefore, waived by
the plaintiffs.
89. Thus, even assuming that the defendant was guilty of a breach
of it’s obligations under the document dated 23rd February, 1987,
or the document dated 7th July, 1983, it would make no difference
whatever. In fact, it it difficult to hold that the defendant was guilty
for not having purchased the concentrates from the plaintiffs.
Neither the documents dated 7th July, 1983, read with the
document dated 21st October, 1987, nor the documents dated 23rd
February, 1987, stipulated the price. The absence of the price being
stipulated is another matter altogether. During the course of
correspondence, there appear to have been some negotiations
regarding the price at which the concentrates were to be procured.
Firstly, this correspondence was in the course of negotiations.
Further, unless and until the price was determined, it is difficult to
hold that the defendant had committed a breach of the terms and
conditions of any of the documents as regards it’s obligations to
purchase the concentrates. Even assuming that there was a breach
on the part of the defendant in manufacturing and selling its
products under the said marks without using the concentrates, the
correspondence indicates quite clearly that the plaintiffs had
abandoned their rights to have the same enforced and
simultaneously permitted the defendant to use the trademarks on
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such products without any objection whatever, at least unto 7th
August, 2003.
91. The result of the plaintiffs’ conduct during this crucial period is
that they permitted the defendant to develop an enormous goodwill
and reputation in the business carried on under the said marks, at
least for a period of about ten years from the date of the knowledge
of the alleged breaches viz. the year 1994. During this period, the
plaintiffs appear to have lost interest in enforcing their rights under
any of the said documents, leading to at least a strong prima facie
conclusion that they relinquished their rights qua the said marks
unconditionally in favour of the defendant. They acquiesced in the
defendant using the marks without any condition, including those
stipulated in the said documents.
68) It would also be useful to quote the findings recorded in para-
85 of the judgment holding that the transfer/assignment of the marks in
favour of Tilaknagar was complete upon execution of the documents and
that the same was not dependent on any further act/deed on the part of
the parties. Para-85 of the judgment reads thus :-
85. The documents dated 23rd February 1987, transferred or
assigned the marks to the defendant. In other words, the transfer or
assignment of the trademarks in favour of the defendant was
complete upon the execution of the documents. The same was not
dependent upon any further act or deed on the part of any of the
parties. This is clear from the plain language of the documents
dated 23rd February 1987.
(emphasis added)
69) It would also be necessary to reproduce the findings recorded
by the learned Judge in para-76 of the judgment where it is held that there
was no breach on the part of Tilaknagar of promise to buy concentrates :-
It is difficult then to state at this stage that there was a breach even
as regards buying concentrates on the part of the defendant.
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70) In para 95 of the first impugned order, the learned Judge held
that the conduct of Tilaknagar was consistent with claim of ownership of
the marks. It is held :-
The defendant’s conduct in the present case is also consistent with the claim of
exclusive rights in the said marks.
71) Holistic reading of the above quoted findings would indicate
that in the first impugned order, the learned Judge has essentially held as
follows :-
(i) That the transfer/assignment was complete on execution of
ceding letters dated 23 February 1987 and such assignment was
not dependent on any acts/deeds on the part of any of the
parties.
(ii) UTO’s contention of reversion of title in the marks is premised
on breach of promise to buy concentrates by Tilaknagar and that
Tilaknagar did not commit any breach of promise to buy
concentrates.
(iii) UTO abandoned the right to have the concentrates purchased
from it by Tilaknagar and since the said right was abandoned,
there could be no breach of any promise and even if there was
any breach, the same was waived by UTO.
72) We find that the learned Single Judge, who formulated the issue
of reversion of title in para-86 of the first impugned order, approached the
same in a different perspective. The issue of reversion of title undoubtedly
depended on the factual dispute of commission of breaches by Tilaknagar.
The learned Single Judge, while passing the first impugned order, has
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conducted prima facie inquiry into the issue of commission of breaches and
has held that Tilaknagar has not committed the breach of promises. The
finding of absence of breach is on twin accounts of (i) non-specification of
price for procurement of concentrates and (ii) UTO abandoning the right
to have the concentrates purchased. If the breach itself is not prima facie
proved, the question of reversion of title would not arise. It is in this sense
that the learned Single Judge passing the first impugned order has not
accepted UTO’s case of reversion of title.
73) Perusal of findings recorded by the learned Single Judge in the
first impugned order indicates that the learned Judge has prima-facie not
accepted the case of UTO of reversion of title. The claim of reversion of
title is thus formulated, considered and not accepted by the learned Judge,
while refusing to grant injunction in favour of UTO. We therefore do not
agree with the findings recorded in the second impugned order that the first
impugned order does not answer the issue of reversion of title in the
impugned marks in favour of UTO. Mere absence of specific finding of
rejection of reversion claim would not mean that the same is not decided.
Establishment of breach of promise is sine qua non for claiming reversion
of title. Since breach of promise itself is not established, question of
recording finding on reversion of title did not arise. The learned Judge has
thus not accepted UTO’s claim of reversion of title while delivering first
impugned judgment dated 22 December 2011. UTO thus lived with the
reality of non-acceptance of claim of reversion of title for 14 long years.
Having lived with such reality for 14 long years, in our view it was not
open for UTO to raise the very same issue once again while opposing
Defendant’s Notice of Motion for injunction filed in the counterclaim.
74) Since UTO made a statement that it was not inviting any
observations adverse to the one recorded in the first impugned order, it
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becomes questionable as to whether the finding of absence of breach of
promise could be revisited in the second impugned order.
75) In fact, adjudication of the very same contention of reversion of
title while delivering second impugned judgment has resulted in somewhat
incongruous situation where the first impugned judgment does not accept
UTO’s claim of reversion of title whereas the second impugned judgment
delivered after 14 years later, holds UTO to be the proprietor of the marks
by accepting the theory of reversion. It is desirable that uniformity is
maintained in the findings recorded in interlocutory orders passed in same
proceedings. The Apex Court in Vishnu Traders (supra) has made the
following observations :-
3. In the matters of interlocutory orders, principle of binding precedents
cannot be said to apply. However, the need for consistency of approach
and uniformity in the exercise of judicial discretion respecting similar
causes and the desirability to eliminate occasions for grievances of
discriminatory treatment requires that all similar matters should receive
similar treatment except where factual differences require a different
treatment so that there is assurance of consistency, uniformity,
predictability and certainty of judicial approach.
76) The above principle is reiterated by the Supreme Court in
Hirendra Pal Singh (supra). In the present case the two interlocutory
orders passed in same Suit, has resulted in two contradictory prima facie
findings on the issue of ownership of title. The first impugned order does
not accept UTO’s case of it being the exclusive owner of the marks (and
consequently Tilaknagar being a mere licensee or dishonest user), whereas
the second impugned order holds that the ownership of the marks has
reverted in UTO’s favour. In our view, it was not open for UTO to seek a
de novo inquiry into the title and the position as obtained since passing of
the first impugned order needs to be continued till decision of the Suit.
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77) It is contended on behalf of UTO that Tilaknagar’s counterclaim
is based on title and that therefore, in its capacity as Plaintiff, Tilaknagar
was required to prove its title to the marks and therefore enquiry in the title
was warranted while passing the second impugned order. True it is that
Tilaknagar is the Plaintiff in the counterclaim and while securing
injunction in its favour, in ordinary circumstances, Tilaknagar needs to
prove title in respect of the marks in its counterclaim, which is based on
title. However merely because UTO’s position has changed from Plaintiff
in Suit to Defendant in counterclaim, the same cannot be a ground for
seeking findings contrary to the one recorded in the first impugned order.
The true indicator, to our mind, is this: if UTO is to be held as the
exclusive owner of the marks, can the first impugned order be sustained ?
In that case, Tilaknagar would become either a licensee or
dishonest/unauthorised user of UTO’s exclusively owned marks. Thus,
declaration of exclusive ownership of UTO in the second impugned order
actually renders the first impugned order erroneous. In our view therefore,
it was not open for UTO to seek a fresh inquiry into the title.
78) We accordingly conclude by holding that the contention of
reversion of title raised by UTO is not accepted in the first impugned order
and therefore it was not permissible for UTO to raise it once again during
the course of adjudication of Motion filed by Tilaknagar and Application
filed by ABD.
F. 2 REVERSION OF TITLE UNDER SECTION 31 OF THE TRANSFER OF
PROPERTY ACT
79) The most contentious issue between the parties, during the course
of hearing of the Appeals, is about the effect of provisions of Section 31 of
the Transfer of Property Act on the transaction of assignment of
trademarks vide ceding letters of 23 February 1987. Before proceeding to
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examine the issue, it must be observed at the very outset that UTO never
relied upon the provisions of Section 31 of the Transfer of Property Act
while pressing its Motion for temporary injunction in the year 2011.
However, when it came to decision of Tilaknagar’s application for
injunction filed in its counterclaim, the whole thrust of UTO was on the
provisions of Section 31 of the Transfer of Property Act. As observed
above, if Tilaknagar was not to press its Motion for temporary injunction,
which was pending for 16 long years, there would have been no occasion
for the learned Judge to go into the issue of applicability of provisions of
Section 31 of the Transfer of Property Act for examining the contention of
reversion of title, which was once not accepted in the first impugned
judgment. Be that as it may. Somehow, Tilaknagar was advised to press its
Motion for temporary injunction 16 years after filing of the counterclaim
and it has invited adverse findings on applicability of provisions of Section
31 of the Transfer of Property Act.
80) Before dealing with highly contentious issue of applicability
of provisions of Section 31 of the Transfer of Property Act to the
transaction of ceding of the marks vide letters dated 23 February1987, it
must be borne in mind that UTO’s case of reversion of title has prima-facie
not been accepted in the first impugned order dated 22 December 2011. All
that is presented by UTO while opposing Tilaknagar’s Motion for
temporary injunction, 14 years later, is same argument by giving flavor of
provisions of Section 31 of the Transfer of Property Act.
81) Section 31 of the Transfer of Property Act deals with
incorporation of condition of ceasing of transfer upon happening/non-
happening of specified event. Section 31 provides thus :-
31. Condition that transfer shall cease to have effect in case
specified uncertain event happens or does not happen.–
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interest therein may be created with the condition superadded that
it shall cease to exist in case a specified uncertain event shall
happen, or in case a specified uncertain event shall not happen.
82) There is great deal of debate between the parties as to whether
Section 31 is only an enabling provision allowing the parties to the
transaction to incorporate a condition of reversion of title upon happening
of specified uncertain event or whether the provision contemplates
automatic reversion of title on happening of the specified event. It is
Tilaknagar’s case that the manner in which Section 31 of the Transfer of
Property Act is couched, it merely carves out an exception to the earlier
provisions of the Act and enables the parties to the transaction to superadd
a condition of transfer of property shall cease to exist in the event of
happening of specified uncertain event. Tilaknagar therefore contends that
in a transaction, where such is condition is superadded, parties need to
seek a declaration from a Court of reversion of title as the superadded
condition is a mere contractual term, enforcement of which must be
secured through Court’s decree. On the other hand, it is UTO’s contention
that Section 31 of the Transfer of Property Act provides for automatic
cessation of transfer of property upon happening of specified uncertain
event. Lengthy submissions are advanced on behalf of the rival parties and
several case laws are relied upon to support respective contentions on the
above issue, which is now the hotbed of controversy between the parties.
83) No doubt, the issue of reversion of title in the marks in favour of
UTO on account of alleged breach of promise to buy concentrates is an
important issue which needs to be answered while deciding the suit.
However, there are multiple reasons why we are not inclined to record any
findings on that contentious issue. The issue of reversion of title was
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specifically argued before the learned Single Judge while delivering the first
impugned judgment dated 22 December 2011. UTO’s contention of
reversion of title is same as was raised while passing the first impugned
order, but was presented in a new package in the form of Section 31 of the
Transfer of Property Act. The issue could not have been reagitated by
UTO while deciding another interlocutory application in same
proceedings. In UTO’s Appeal No.66/2012, no interim relief is granted
with the result that UTO has lived with the reality of non-acceptance of its
claim of reversion of title for the last 14 long years. UTO has not
commenced trial of the suit which is pending for 16 long years and the
same needs to be taken up for decision at some point of time rather than
letting parties litigate over the issue of interlocutory injunction endlessly.
Rather than this Court recording its prima-facie findings on the issue of
reversion of title in the light of provisions of Section 31 of the Transfer of
Property Act, it is appropriate that the learned Trial Judge decides the said
issue finally by proceeding ahead with the trial of the suit. Also, even if
this Court decides the contentious issue of reversion of title by examining
lengthy arguments and by discussing dozens of judgments quoted in
support of respective contentions, such decision would still be mere prima-
facie determination, which would not bind the learned Judge deciding the
suit finally. The proper course of action is to record final findings on the
issue by the learned trial Judge by proceeding with trial of the suit.
84) For above reasons, we are not inclined to record our prima
facie findings on the issue of reversion of title in the impugned marks in
favour of UTO by examining the effect of provisions of Section 31 of the
Transfer of Property Act. In our view the issue needs to be decided at the
time of final hearing of the Suit. We are therefore not burdening the
judgment by discussing various judgments cited by the rival parties on the
issue of reversion of title.
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case on the issue of reversion of title in the marks under the provisions of
Section 31 of the Transfer of Property Act, in our view the balance of
convenience clearly lies against UTO and in favour of Tilaknagar. The
transaction of assignment/transfer of marks has taken place on
23 February 1987. In the first impugned judgment, the learned Judge has
held that the transaction of assignment was complete and the same was not
dependent on further act/deed on the part of any of the parties. The said
finding has remained undisturbed for the last 14 long years. It is
undisputed position that Tilaknagar has been manufacturing and selling its
own recipes without purchasing concentrates from UTO since the year
1987 by asserting its title in respect of the marks. Such manufacture and
sale of products in India has been taking place for the last 38 long years,
unhindered by any restraint order passed against Tilaknagar. Tilaknagar’s
manufacture and sale of products under the impugned marks is consistent
with its claim of proprietorship in the marks. UTO has not manufactured
or sold even a single bottle under the impugned marks in India for the last
38 long years after execution of ceding letters dated 23 February 1987.
UTO did not sue Tilaknagar for a considerable period of time asserting its
claim of title. UTO itself appears to be confused about the exact nature of
transaction as it has raised inconsistent pleas of documents of 1987
constituting merely a license, as well as reversion of title on account of
breach of promise. As held above, the learned Single Judge has rightly
refused to grant injunction in favour of UTO by the first impugned
judgment dated 22 December 2011.
86) Even after rejection of its prayer for temporary injunction,
UTO was free to manufacture and/or sell its own products in India as no
injunction operated against it. UTO and ABD were granted leave to apply
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for introduction of products in India by order dated 10 September 2014.
However, after rejection of its prayer for temporary injunction on
22 December 2011, UTO did not make any attempts to introduce its
products in India for a considerable period of time. After failing to secure
injunction against Tilaknagar, UTO apparently transferred 50% ownership
in the marks in favour of ABD sometime in August 2014. Though this
Court granted leave to UTO and ABD to seek permission of the Court for
introduction of products in India by order dated 10 September 2014,
neither UTO nor ABD filed any such application to introduce the products
for next nine long years. Such application was filed by ABD for the first
time in the year 2023. All these factors would clearly go against UTO and
ABD while considering the balance of convenience.
87) UTO is yet to commence its business in India, which is most
vital consideration to be put in the scales for determining the balance of
convenience. Here the observations of the Apex Court in Wander Ltd.
(supra) are relevant :-
9. Usually, the prayer for grant of an interlocutory injunction is at a stage when
the existence of the legal right asserted by the plaintiff and its alleged violation
are both contested and uncertain and remain uncertain till they are established at
the trial on evidence. The court, at this stage, acts on certain well settled princi-
ples of administration of this form of interlocutory remedy which is both tempo-
rary and discretionary. The object of the interlocutory injunction, it is stated
“…is to protect the plaintiff against injury by violation of his rights for which
he could not adequately be compensated in damages recoverable in the action if
the uncertainty were resolved in his favour at the trial. The need for such protec-
tion must be weighed against the corresponding need of the defendant to be pro-
tected against injury resulting from his having been prevented from exercising his
own legal rights for which he could not be adequately compensated. The court
must weigh one need against another and determine where the ‘balance of con-
venience’ lies.”
The interlocutory remedy is intended to preserve in status quo, the rights of par-
ties which may appear on a prima facie case. The court also, in restraining a de-
fendant from exercising what he considers his legal right but what the plaintiff
would like to be prevented, puts into the scales, as a relevant consideration
whether the defendant has yet to commence his enterprise or whether he has al-
ready been doing so in which latter case considerations somewhat different from
those that apply to a case where the defendant is yet to commence his enterprise,
are attracted.
(emphasis and underling added)
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88) If the objective of preserving status quo is to be achieved, the
current status of Tilaknagar alone manufacturing and selling the products
in India under the impugned marks will have to be continued till decision
of the suit. In our view therefore, upon putting in the scales the factum of
UTO not commencing its enterprise in India, the balance of convenience
clearly gets tilted in favour of Tilaknagar and against UTO.
89) Also, UTO’s passing off action is based on its claim of
invasion of its business. As of now, it is an admitted position that UTO has
not commenced any business in India. In India only one entity is
manufacturing and selling products under the impugned marks, which is
Tilaknagar. By seeking leave of this Court, UTO’s assignee (ABD) has
proposed to commence the business in India into the product under the
tradename Mansion House. By now, the Indian consumers have associated
the products under the impugned marks as that of Tilaknagar. UTO has
permitted Tilaknagar to develop its trade in India. This status between the
parties, which has prevailed for several decades, needs to be preserved till
decision of the suit.
F.4 PUBLIC POLICY 90) As observed above, passing of second impugned order dated
7 February 2025 has resulted in a situation where Tilaknagar is not
restrained from manufacturing/selling products under the impugned marks
and UTO is also not injuncted from doing the very same act. If both the
orders are permitted to stand, the same would result in utter confusion in
the minds of the customers where both Tilaknagar and UTO would sell
same products under the same marks.
91) ‘One mark, one source and one proprietor’ is the settled principle
of law aimed at achieving the public policy of avoiding confusion amongst
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the consumers. The net result of the second impugned order is that ABD
will introduce the same alcoholic product under brand name MANSION
HOUSE in the State of West Bengal. Since there is no injunction against
UTO and ABD, they will introduce their products under the same marks
all over India as they need not seek leave of the Court on account of
dismissal of Tilaknagar’s Notice of Motion. Soon, all the States in India
will see sale of same alcoholic products under same tradenames of
MANSION HOUSE and SAVOY CLUB of Tilaknagar and UTO/ABD.
This would create utter confusion in the minds of the consumers, who have
been purchasing products of only Tilaknagar in India since 1987 in
absence of even a single bottle being made available for sale by UTO in
India.
92) In para 41 of the judgment in Power Control Appliances Versus.
Sumeet Machines Pvt. Ltd. (supra) the Apex Court has held as under :-
41. It is a settled principle of law relating to trade mark that there can be only one
mark, one source and one proprietor. It cannot have two origins. Where,
therefore, the first defendant-respondent has proclaimed himself as a rival of the
plaintiffs and as joint owner it is impermissible in law. Even then, the joint
proprietors must use the trade mark jointly for the benefit of all. It cannot be
used in rivalry and in competition with each other.
(emphasis added)
As of now, there is only one manufacturer and seller of alcoholic products
under the impugned marks in India. It would therefore be appropriate that
the same situation is continued till the suit is decided rather than creating
confusion amongst the consumer by letting UTO and ABD also to
introduce their products.
93) Reliance is placed by UTO and ABD on provisions of Section
28(3) and 33(2) of the Trademarks Act in support of contention that both
Tilaknagar and UTO/ABD can be permitted to sell their products in India
till decision of the Suit. Section 28 of the Trademarks Act provides thus :-
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28. Rights conferred by registration.
(1) Subject to the other provisions of this Act, the registration of a trade mark
shall, if valid, give to the registered proprietor of the trade mark the exclusive
right to the use of the trade mark in relation to the goods or services in respect of
which the trade mark is registered and to obtain relief in respect of infringement
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 (1) shall
be subject to any conditions and limitations to which the registration is subject.
(3) Where two or more persons are registered proprietors of trade marks, which
are identical with or nearly resemble each other, the exclusive right to the use of
any of those trade marks shall not (except so far as their respective rights are sub-
ject to any conditions or limitations entered on the register) be deemed to have
been acquired by any one of those persons as against any other of those persons
merely by registration of the trade marks but each of those persons has otherwise
the same rights as against other persons (not being registered users using by way
of permitted use) as he would have if he were the sole registered proprietor.
Section 33 of the Trade Marks Act provides thus :-
33. Effect of acquiescence.
(1) Where the proprietor of an earlier trade mark has acquiesced for a continuous
period of five years in the use of a registered trade mark, being aware of that use,
he shall no longer be entitled on the basis of that earlier trade mark–
(a) to apply for a declaration that the registration of the later trade mark is in-
valid, or
(b) to oppose the use of the later trade mark in relation to the goods or services in
relation towhich it has been so used, unless the registration of the later trade mark was not
applied in good faith.
(2) Where sub-section (1) applies, the proprietor of the later trade mark is not en-
titled to oppose the use of the earlier trade mark, or as the case may be, the ex-
ploitation of the earlier right, notwithstanding that the earlier trade mark may no
longer be invoked against his later trade mark.
94) In our view, provisions of Sections 28(3) and 33(2) govern
situations of existence of two or more similar trademarks. Here we are
concerned with the same trademarks over which Tilaknagar and UTO are
fighting. Tilaknagar has developed huge trade in the impugned trademarks
for the last over 38 long years as against UTO not selling a single bottle in
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Indian market. We are of the view that in the peculiar facts and
circumstances of the present case, permitting both UTO and Tilaknagar to
sell same products under the same marks would be against the public
interest. Therefore following the test in Wander Ltd. it would be more
appropriate to continue the status quo which has existed for 38 long years
since execution of ceding letters and for 14 years after passing of the first
impugned judgment dated 22 December 2011 for some more time till the
suit is decided finally. Such a course of action would prevent confusion in
the minds of Indian consumers. If UTO has waited for such a long time
for introduction of its products in India, it can wait for some more time till
the Suit gets finally decided. Also of relevance is the fact that after 9 long
years of grant of leave, ABD filed application for introduction of product
under the mark ‘MANSION HOUSE’ only in the State of West Bengal. In
our view, UTO and ABD can wait for some more time before introducing
their products under the trademark ‘MANSION HOUSE’ in one of the
Indian States.
F.5 ARGUMENT OF SUPPRESSION AND PROSECUTION HISTORY
ESTOPPEL
95) Much is argued on behalf of UTO that Tilaknagar suppressed
the pleadings in suit filed by it before Hyderabad Court where it adopted
alleged contradictory stand of the marks being dissimilar, which is
contrary to the pleadings in its counterclaim. Therefore, arguments of
suppression for denial of equitable relief of injunction as well as
prosecution history estoppel were pressed into service by UTO before the
learned Single Judge passing the second impugned order. The learned
Judge has accepted both the contentions of UTO for denying injunction in
favour of Tilaknagar.
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96) However, what appears to have been ignored is the position
that the argument of suppression, as well as prosecution history estoppel,
were very much available with UTO while pressing its application for
temporary injunction in 2011. The Hyderabad Suit was filed by Tilaknagar
on 9 October 2009 after the present Suit was filed by UTO on
5 March 2009. However, for reasons unknown, UTO never raised the
contention of suppression and prosecution history estoppel at the time of
passing of the first impugned order. This shows that UTO apparently did
not find the pleadings in Hyderabad Suit relevant for pressing its claim
against Tilaknagar. However, while pressing ABD’s application for
introduction of products in the State of West Bengal and while opposing
Tilaknagar’s Application for temporary injunction, UTO pressed the
argument of suppression, which has found favour with the learned Single
Judge passing the second impugned order. The learned Single Judge has
criticized Tilaknagar for not disclosing the factum of filing of Hyderabad
Suit in its counterclaim and Notice of Motion. However, by the time the
Motion was taken up for hearing, there were multiple disclosures made by
Tilaknagar about Hyderabad suit in various Affidavits filed in the year
2014.
97) UTO’s conduct in not arguing suppression and estoppel is
sought to be explained by contending that those objections became relevant
while deciding the claim of Tilaknagar for injunction in its capacity as
Plaintiff rather than deciding UTO’s application for temporary injunction.
Since aim of both the motions filed by UTO and Tilaknagar was same, i.e.
of restraining each other based on rival claims of ownership, UTO’s
conduct of not raising the pleas of suppression and estoppel while passing
of the first impugned order would assume importance. Be that as it may. In
our view, it is not necessary to delve deeper into this aspect as UTO has
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lived with the reality of non-introduction of any products in India under
the impugned marks for the last 38 long years and more particularly for l4
long years after passing of the first impugned order. The balance of
convenience is clearly against UTO and in favour of Tilaknagar. In order to
avoid confusion in the minds of the customers, which is also in public
interest, the two rival entities cannot be allowed to manufacture and sell
products under the same marks particularly when UTO has not sold a
single bottle of alcohol in India under the impugned marks for 38 long
years.
98) We have already expressed that hearing of the suit deserves to
be expedited. We are informed that the issues in the suit have already been
framed by order dated 26 February 2013. It is appropriate that the parties
lead evidence before the learned trial Judge in support of their respective
claims expeditiously so that the suit and the counterclaim can be taken to
their logical end in an expeditious manner.
G. CONCLUSION 99) The conspectus of the above discussion is that the first
impugned order dated 22 December 2011 deserves to be upheld. Since we
have held that the first impugned order did not accept UTO’s claim of
reversion of title, the finding of reversion of title in favor of UTO recorded
in the second impugned order needs to be aligned with the finding in the
first impugned order. Also, the resultant status in the Indian market
prevailing for the last 14 years after passing of the first impugned order
need not be disturbed and needs to be preserved till the suit is decided. For
that purpose, the second impugned order will have to be set aside.
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of Motion No. 993/2009 filed in Suit No. 632/2009 is upheld
and consequently Appeal No. 66/2012 filed by UTO is
dismissed.
(ii) Judgment and order dated 7 February 2025 passed in Notice of
Motion No. 1287/2010 filed in Counterclaim No.6/2010 and
passed in Interim Application (Lodg.) No. 16999/2023 is set
aside and consequently Commercial Appeal (Lodg.) No.
6617/2025 and Commercial Appeal (Lodg.) No.6622/2025 filed
by Tilaknagar are allowed.
(iii) UTO and ABD shall continue the current status of non-
introduction of their products in India under the impugned
marks MANSION HOUSE and SAVOY CLUB till decision of
the Suit.
(iv) The learned Trial Judge is requested to expedite hearing of
Commercial IP Suit No.2/2009 and to make an endeavor to
decide the same in an expeditious manner.
(v) It is clarified that the findings recorded in the judgment are prima
facie and the learned Single Judge shall not be influenced by the
same while deciding the suit finally.
101) With the above directions, all the three Appeals are disposed
of.
Digitally
signed by
NEETA
NEETA SHAILESH
SHAILESH SAWANT [SANDEEP V. MARNE, J.] [CHIEF JUSTICE]
SAWANT Date:
2025.07.16
18:27:13
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