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TMI Blog2003 (4) TMI 405X X X X Extracts X X X X X X X X Extracts X X X X ..... tnership firm") by the use of the trade mark "Postiano" and for an injunction restraining the defendants from manufacturing and selling edible oil under the trade mark "Postiano" so as to pass off their goods as the edible oil being sold under the trade mark "Postman". 2. The suit is instituted by the Court Receiver, who has been appointed as Receiver of the assets of the partnership firm in Suit No. 4913 of 2000 filed by the defendant No. 2 against the defendant Nos. 3 to 7 for dissolution of the firm. In that suit, this Court by an order dated 6-10-2000 appointed the Court Receiver as Receiver of the partnership business and assets. By order dated 30-7-2001 this Court recorded the agreement of the parties that the assets of the firm are to be sold by inviting bids as under:- "19. It is also agreed that the partners of the suit firm shall not carry on any business on the basis of the trade marks of the suit firm. The Court Receiver shall however be entitled to take steps that may be necessary to safeguard the trade marks of the firm as also take action against the persons who may be unauthorisedly using the trade marks of the firm." 3. Thereafter, one of the partners the defend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the trade mark in the manner provided by the Act. Section 28(1) reads as follows:- "28. Rights conferred by registration.-(1) Subject to the other provisions of this Act, the registration of a trade mark in Part A or Part B of the register shall, if valid, give to the registered proprietor of the trade mark the exclusive right to the use of the trade mark in relation to the goods 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." Clause (q) of section 2 defines 'registered proprietor' as follows:- "(q) 'registered proprietor', in relation to a trade mark, means the person for the time being entered in the register as proprietor of the trade mark." Clause (b) of section 2 defines "associated trade marks" as follows:- "(b) 'associated trade marks' means trade marks deemed to be, or required to be registered as associated trade marks under this Act." 5. Dr. Tulzapurkar, learned counsel for the defendant No. 1, states that though a trade mark is property all the incidents of property are not attributable to a trade mark. The basic difference, according to him, between a trade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efendant No. 1 cannot be accepted as long as it cannot be disputed that the trade mark is a property. There is no doubt that the trade marks in question have all the characteristics of trade marks. They stand registered in the name of the partnership firm. The registration is valid and subsisting. It is not possible to hold that the property in them has in any way diminished because the firm has stopped manufacturing upon dissolution. A mere cessation of manufacture cannot result in the destruction or even diminishing the property in the mark where the registration of the mark subsists. The mark and the property in it must be taken to exist. Therefore, even if the Receiver has no connection in the course of trade with the goods it can be said that there is no property in the marks. The question is whether a Receiver can bring such a suit as the present one ? A Receiver is appointed by this Court under section 94 and Order 40 rule 1 of the Code of Civil Procedure, 1908. Section 94(d) reads as follows:- "94. Supplemental proceedings.-In order to prevent, the ends of justice from being defeated the Court may, if it is so prescribed,- (a) to (c)****** (d)appoint a receiver of any pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the trade mark that there should be some connection between the registered owner and the mark and that the connection is essential, it does not follow that the Receiver cannot bring the suit for protection of the trade mark in the absence of such a personal connection with the trade mark because the property in the registered trade mark subsists. In law and for all practical purposes, the Receiver stands in the shoes of the owner and must be held entitled to do all such acts necessary for the preservation and protection of the property, including trade marks, for which he is appointed a Receiver. 8. It is also not possible to accept the contention that apart from the owner only a person in whom the property vests by operation of law can bring the suit. There is no doubt that there is a distinction between the rights of an Official Assignee in whom the property vests by virtue of section 17 of the Presidency Town Insolvency Act and those of a Receiver in whom the property does not vest in the sense that he does not become an owner. What is important is that on the Receiver are conferred all the powers of an owner. Therefore, if the owner has the power to bring a suit, the Rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Receiver cannot institute this suit. The Receiver stands in the shoes of the registered proprietor and the ownership does not rest in any one else. 10. Mr. Kadam, learned counsel for the defendant No. 2, relied upon the decisions in Kurapati Venkata Mallayya v. Thondepu Ramaswami & Co. AIR 1964 SC 818, Koppathodi Moidin Kutty v. A.K. Doraiswami Aiyar AIR 1952 Mad. 51, Chaturbhuj Durgadas Factory v. Damodar Jamnadas Zawar AIR 1960 Bom. 424 and William Robert Fink v. Mohanraj Bahadur Singh [1998] ILR 25 Cal. 642, in support of the proposition that a Receiver can certainly maintain a suit in respect of the property. In Kurapati Venkata Mallayya's case (supra), the Supreme Court has observed as follows:- "(13) The next question is whether the suit was in proper form and was within time. Though the cause of action for the suit arose on June 5, 1946, it is admitted before us that the courts were closed on June 5, 1949 and the suit was filed on the day on which they reopened. It would, therefore, be within time if it was properly constituted on the date on which it was filed. In Jagat Tarini Dasi v. Naba Gopal Chaki ILR 34 Cal. 305 which is the leading case on the point it was held b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as useless form inconvenient, because in many cases, the title of the owners may be the subject-matter of the limitation in which the receiver has been appointed-useless, because the true owners have no discretion as to the institution of the suit, no control over its management, and no right to the possession of the proceeds." (pp. 316-317) Later the learned Judges pointed out, that for the time being and for the purpose of administration of the assets the real party interested in the litigation is the Receiver and, therefore, there is no reason why the suit could not be instituted in his own name. The learned Judges then referred to a number of cases in support of their conclusion. It seems to us that the view of the Calcutta High Court that a Receiver who is appointed with full powers to administer the property which is custodia legis or who is expressly authorised by the court to institute a suit for collection of the assets is entitled to institute a suit in his own name provided he does so in his capacity as a Receiver (sic). If any property is in custodia legis the contesting parties cannot deal with it in any manner and, therefore, there must be some authority competent to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s been appointed as Receiver. Having found that the suit by the receiver is competent and tenable, it is not necessary to consider the contention raised by the learned counsel for the plaintiff and the defendant No. 2 that the defendant No. 1 was a party to the order of this Court wherein this Court directed the Receiver to file the suit and, therefore, cannot object to the maintainability of this suit. 12. The next important question that arises is whether the plaintiff can seek an injunction against passing-off by the defendant No. 1 in view of the admitted fact that the partnership firm has last manufactured and sold edible oil under the trade mark "Postman" in December 2000 after which, admittedly, the goods of the partnership firm (hereinafter referred to as the "plaintiff's goods") have not been sold in the market because of the dissolution. In other words, is the plaintiff entitled to an injunction against passing-off even though there is no trade by the plaintiffs goods. 13. The partnership firm M/s. Ahmed Oomerbhoy carried on the business of manufacture and sale of edible oil and used the trade mark "Mastaan" and "Postman" in the course of their trade. There is no disput ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure and sale of edible oil by the partnership firm is only due to the dissolution and the order dated 6-12-2000 in the suit by which the Court Receiver has been appointed as Receiver of the business and assets of the partnership firm. By an order dated 30-7-2002 the Court Receiver has been appointed as Receiver of all assets of the erstwhile firm. The cessation of business of the partnership firm is because of the dissolution of the firm. As regards the stage of the dissolution of the firm, there is no dispute about the fact that the assets have been ordered to be sold and that this Court has directed the Receiver to explore the possibility of sale of the business of the firm as a going concern which would also safeguard the interest of the employees. Clearly the winding up is not yet complete. 16. The question is does the goodwill in the business of the partnership firm exist in this situation ? It seems to be clear that it does. Section 14 of the Indian Partnership Act, 1932 expressly stipulates that the property of the firm will include the goodwill of the business. Section 53 recognises the right of the partner to restrain another partner from carrying on business in the firm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, to the contrary, the goodwill must be sold for the benefit of all the partners, if any of them insist on such sale; (2) So far as is possible, having regard to the right of every partner to carry on business himself, the court will, on dissolution, interfere to protect and preserve the goodwill until it can be sold; (3) If a partner has himself obtained the benefit of the goodwill, he can be compelled to account for its value, i.e. for what it would have sold, on the footing of his being himself at liberty to compete in business with the purchaser." Now, there seems to be no dispute that a passing-off action is based on the existence of the goodwill in the business and not merely the get-up of the good. (See observations in Spalding & Bros. case (supra)). There is also no dispute that in partnership, trade marks are considered to be an integral part of the goodwill of the business. Lindley on the Law of Partnership, Fourteenth Edition, says thus:- "Goodwill in connection with trade marks. The use of partnership trade marks is another very important element in the goodwill of the business. Such marks, as assets of the firm, are saleable on a dissolution like any other asset. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fact that there is no statement in the plaint that the partnership firm is going to resume business, it was contended that the plaintiff is disentitled for an injunction since there is no chance of the defendants passing-off their goods as those of the plaintiff which are non-existent. In support of this proposition, he relied on the decision of the English Court in Pink's case (supra). It is not possible to accept the contention that because the plaintiff is not trading in the goods, she is not entitled to an injunction on the ground of passing-off simply because the defendants goods cannot be confused with non-existent goods of the plaintiff. In the first place, the action of passing-off is not based on the property in the mark name or get-up improperly used by the defendants. It is a remedy against invasion of the property in the business or goodwill likely to be injured by the misrepresentation of the defendant that his goods are those of plaintiffs. Therefore, if such goodwill in the business can be shown to exist, then obviously that business or goodwill can be invaded and the plaintiff can protect it by seeking an action in passing-off. 18. In Saville Perfumary Ltd. v. June ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roduced earlier, in fact, provides that in settling the accounts of a firm after dissolution, the goodwill shall, subject to the contract between the partners, be included in the assets, and it may be sold either separately or long with other property of the firm. What must be inferred from the above is that even after the dissolution of a partnership firm, the goodwill in the business, which includes trade marks, must be taken as something that survives. It must follow, therefore, that it must be protected till it is sold or assigned or till it is found that it is not possible to sell it because of a complete devaluation. In the context of passing-off. Goodwill has been described by Kerly in the Law of Trade Marks and Trade Names, Thirteenth Edition, as something which represents "in connection with any business or business product, the value of the attraction to customers which the name and reputation possesses. It is often described as the attractive force which brings in custom". Kerly quotes the description of goodwill by Scrutton L.J. in Whiteman Smith Motor Co. v. Chaplin [1934] 2 K.B. 35 :- "A division of the elements of goodwill was referred to during argument and appears ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, therefore, be held to be perfectly tenable both on the ground of passing-off as well as on the ground of infringement of the trade mark. Therefore, the goodwill of a firm which is deemed to be the property of the firm clearly survives after the dissolution. Dr. Tulzapurkar relies on the decision in Pink's case (supra) for the proposition that that an action for passing-off cannot be maintained by the plaintiff who has no goods since there is no possibility of confusion of the defendants goods with his. Undoubtedly, the Court in that case has held that the plaintiff can have no goodwill if its business has come to a close and is, therefore, not entitled to maintain an action for passing-off and also for alleged infringement of the trade mark. It must be noted, however, that Pink's case (supra) was not a case of dissolution of the firm and would have no application to a situation where a firm is being dissolved in the Indian context under the Indian Partnership law which expressly recognizes the existence of goodwill after dissolution. Moreover, in that case, there is a finding that the entire business and everything has been sold. Even the stock, pots and jars and trade labels of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f it was to be extinguished, but this has subsequently been denied." It is, therefore, clear that irrespective of the provisions of the Indian Partnership Act, it cannot be the law that an action for passing-off cannot be maintained merely because the plaintiff has no business. Therefore, the application for injunction both in respect of passing-off as well as infringement of the trade mark cannot be considered. 20. Now to take up the question of deceptive similarity of the marks in question. "Mastaan" and "Mastman" The partnership firm has been selling mustard oil under the brand name "Mastaan" since 1958. The word "Mastaan" is used along with the label or device of a turbaned rustic man with a moustache. Exhibits C-1 to C-4 are the firm's containers, bottles and labels. This mark and the label and device of the moustache rustic man were registered under clause 28 on 5-11-1966. The firm has had an extensive sale of the edible mustard oil under the trade name "Mustaan". The sales figures at Exh. D are in the region of Rs. 98 crores from the years 1990-91 to 1999-2000 which are not denied. 21. After agreeing to an order on 30-7-2001 that the partners of the suit firm shall not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anufactured by the firm is having a distinctive design, shape, colour scheme, lay-out, get-up and appearance as would be apparent from the photographs at exhibits I-1 to I-4. The trade name "Postman" and the several labels and devices depicting a Postman were registered with the Registrar of Trade Marks and have been used for decades. Apparently, the label "Postman" is also registered with the Registrar of Trade Marks in U.A.E. (Dubai) and the United Kingdom. The documents of registrations are at exh. B-3 to B-20. The mark appears to be registered in the name of all the partners trading as Ahmed Oomerbhoy and also as Ahmed Mills. There is no dispute that this registration is current and subsisting. 25. It appears that after the order dated 30-11-2001 was passed, the defendant-company which is controlled by the defendant No. 3 and his relatives started marketing packed refined groundnut oil under the trade mark "Postiano". This was being sold in bottles and containers whose design, colour scheme, etc. are similar to that of "Postman" brand. The photographs of the bottles and containers are at exh. L-1 to L-3. Again the two words are not identical. But it is important to see if the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder dissolution, I have no doubt prima facie that "Postiano" was adopted because it would resemble "Postman". Thus, having regard to these similarities, I am of view that taking the two products and the word as a whole "Postiano" is deceptively similar to "Postman" and is intended to simulate the latter. The Supreme Court in Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd. AIR 2001 SC 1952 has quoted the observation of Farwell, J. in William Bailey (Birmingham) Ltd.'s Application [1935] 52 RPC 136:- "I do not think it is right to take a part of the word and compare it with a part of the other word; one word must be considered as a whole and compared with the other word as a whole.....I think it is a dangerous method to adopt to divide the word up and see to distinguish a portion of it from a portion of the other word." 27. The words and symbols involved here i.e., "Mastaan" and "Mastman" and "Postman" and "Postiano" must be held to be deceptively similar. As observed by the Supreme Court in Ruston & Hornby Ltd. v. Zamindara Engg. Co. AIR 1970 SC 1649:- "...It is enough that the get-up of B's goods has become distinctive of them and that there is a probability of confusion ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not possible to apply the decision of the Delhi High Court refusing injunction to the present case The Injunction was refused on the overall facts and circumstances of the case which included the fact that the defendant's design, lettering, colour scheme, etc. were entirely different; the plaintiff was found to have no bona fide intention to use the mark at the time of the application and the balance of convenience was in favour of the defendant. On the other hand, the decisions relied upon by Mr. Kadam, learned counsel for the defendant No. 2, seem to conclude the issue. In Hindustan Embroidery Mills P. Ltd. v. K. Ravindra & Co. (LXXVI Bombay Law Reporter 146), this Court observed:- "It is not the practice to consider the validity of the registration of a trade mark on a Motion for interlocutory injunction taken out by the person who has got the mark registered in his name. While a mark remains on the register (even wrongly), it is not desirable that others should imitate it." Section 31 of the Trade and Merchandise Marks Act, 1958 reads as follows:- "31. Registration to the be prima facie evidence of validity.-(1) In all legal proceedings relating to a trade mark registered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the trade mark. Merely because it has not been done till date, it is no reason to allow a further erosion of the value of the mark. There is one notable feature of this case which, to my mind, merits the grant of an injunction and that is the manner in which the impugned marks "Mastman" and "Postman" have been put to use. As may be recalled in the suit for dissolution and winding up of the partnership firm, this Court, passed an order dated 30-7-2001. In para 19 of that order, the following agreement was recorded:- "19. It is also agreed that the partners of the suit firm shall not carry on any business on the basis of the trade marks of the suit firm. The Court Receiver shall however be entitled to take steps that may be necessary to safeguard the trade marks of the firm as also take action against the persons who may be unauthorisedly using the trade marks of the firm." Thereafter in August 2001, the defendant No. 1, a company in which shares are held by the defendant No. 3, a partner who had agreed to the above order, started using the trade mark "Mastman". Then after this Court passed the order dated 30-11-2001 directing the Receiver to engage an advocate to initiate proce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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