TMI Blog1991 (10) TMI 321X X X X Extracts X X X X X X X X Extracts X X X X ..... passed in favour of the plaintiffs and against the Defendants declaring that the Defendants are not entitled to use the aforesaid Foreign Brand name and/or endorsement of W.D. H. O. Wills and/or wills on the cigarettes packets and cartons manufactured sold and advertised by the Defendant No. 2 through Defendant No. 1 and/or their other Dealers, Agents etc. (b) a perpetual injunction be issued restraining the defendants their employees, servants, agents and dealers and/or assigns from producing and/or manufacturing and/or marketing and/or advertising and dealing with the cigarettes packets and cartons having an endorsement and/or brand name of W.D. H.O. Wills and/or Wills . The allegations made in the plaint for claiming these reliefs may be summarised as under: (i) The plaintiffs are the residents of Sikkim and are smokers or users of cigarettes and have knowledge and experience of various brands of cigarettes, their brand names and quality and have filed the suit as members of the public to prevent the defendants wrongful action constituting unfair trade practice affecting a large section of the public who are habitual smokers and who have been and continue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion upon the minds of the consumers that all the brands of wills cigarettes manufactured and sold by it are products, being sold in collaboration or association with the aforesaid foreign companies; (vi) There is a widely prevalent affinity and a desire in the general consumers in India to go for goods of foreign make or made with foreign association and as such by using the aforesaid endorsement, the members of the public such as the plaintiffs get misled, deceived and buy the products of ITC under the impression that these are the goods of foreign origin and/Or manufactured and sold in collaboration with the foreign manufacturers; (vii) The quality of the Wills brand cigarettes manufactured and sold by the defendants is not similar or comparable to the quality of the cigarettes manufactured by W. D. and H. O. Wilts ; (viii) The activities of ITC in manufacturing, selling and advertising its products under cover of the foreign brand name is misleading, deceptive and amounts to fraud and misrepresentation with intention to deceive the public, with a view to enhancing its sales; (ix) The activities of ITC are also contrary to and inconsistent with the guidelines f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disclose any cause of action and only an illusion of a cause of action has been created by making fake and untrue statements, and further that the suit is barred by law and is not maintainable. It is also stated that the Head Office of ITC is situated at 37, Chowringhee, Calcutta and it has no office establishment or representatives and does not carry on business within the State of Sikkim and the goods manufactured by it at various factories and establishments are purchased by Druk Investment Company, defendant No. 1, on a principal to principal basis, and thereafter distributed in the State of Sikkim pursuant to certain orders of the Government of Sikkim. 4. On 25-3-1991, the learned Trial Court framed the following two issues : 1. Whether the plaint discloses any cause of action, if not, whether the same is liable to be rejected? 2. Whether this Court has no jurisdiction to try and entertain the said suit, as alleged by the defendant No. 2? On that date, the learned counsel for ITC pressed for taking up the application under Order VII rule 11 prior to hearing on the injunction matter. On the other hand, the learned counsel for the plaintiffs urged that the injunctio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d District Judge had ordered on 25-3-1991 that the two issues framed by him on that date which included the issue as to territorial jurisdiction would be heard and decided first, and, yet he proceeded to dispose of the application for injunction without deciding that issue. At no time, he had recalled that order. According to Mr. Desai, this affected the validity of the order. Affidavits and counter-affidavits were filed in this regard. Dr. Ghosh opposed Mr. Desai and pressed that the matter should be heard in continuation. However, after arguments were concluded in the Revision, I came to the conclusion that the impugned order could not be sustained. Accordingly,. I pronounced the order allowing the Revision with reasons to follow. That order is reproduced at the end of the judgment. I now proceed to record my reasons for the order. 6. Mr. Desai has urged the following points in support of the Revision: (a) The plaintiffs have not made necessary averments in the plaint to disclose cause of action on any of the various counts on which reliefs are claimed by them, viz., deceit, passing off, unfair trade practice, violation of the guidelines for Industrial policy laid down by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... comes to the conclusion that there was no cause of action for the suit. In the latter case, obviously the plaint cannot be rejected under Order VII, Rule 11, C.P.C. The question whether the plaint does not disclose cause of action, has to be determined from the pleadings of the plaintiff alone. If the plaint is vague, the Court should clear, the vagueness by examining the plaintiff under Order X, Rule 2, C.P.C. As pointed out by the Privy Council in Mohammad Khalil Khan v. Mahbub Ali Mian, AIR 1949 PC 78, the phrase cause of action has not been defined in any enactment, but the meaning of it has been judicially considered in various decisions. 'Cause of action' means the whole bundle of material facts which are necessary for the plaintiff to prove, if traversed, in order to support his right to the judgment of the court. Therefore, where the defendant claims that the plaint does not disclose cause of action, it is necessary for the court to scrutinise the plaint in order to find whether the plaintiff has averred all the necessary allegations which, if traversed, are necessary to be proved by him to entitle him to relief. At the same time, if the plaintiff pleads more tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l position that the plaint has to be scrutinised to find whether the plaintiffs have pleaded all the material allegations which it was necessary for them to prove, if traversed, in order to entitle them to any of the reliefs claimed. 10. One of the causes of action on which the plaintiffs claim relief is deceit. As per Halsbury's Laws of England, fourth edition (volume 31), an action of deceit is maintainable at the suit of the representee for damages in respect of fraudulent misrepresentation and is founded in tort. In such an action, the burden is on the representee of alleging and proving the following matters: (1) that the alleged representation consisted of something said, written or done which amounts in law to a representation; (2) that the defendant was the representator; (3) that the plaintiff was the representee; (4) that the representation was false; (5) inducement and materiality; (6) alteration of position; (7) fraud; and (8) damage. The only damage which the law recognises is actual and temporal injury, that is, some loss of money or money's worth, or some tangible detriment capable of being quantified and assessed. It does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did in fact rely and act upon it. 12. Thus, in an action of deceit, the plaintiff must allege the following facts: 1. The defendant made a false representation; 2. The defendant made it fraudulently, that is, knowing it to be false or not knowing it to be true; 3. The defendant made it with the intent that the plaintiff should act on it; 4. The plaintiff acted on it; and 5. The plaintiff by acting on it, sustained damage. Misrepresentation and fraud are the two essential ingredients of an action of deceit. Order VI, Rule 4 of the Code of Civil Procedure says that in all cases in which the party pleading relies on any misrepresentation, fraud, breach of trust, wilful default, or undue influence, and in all other cases in which particulars may be necessary, particulars (with dates and items if necessary) shall be stated in the pleading. In the House of Lords' decision in Dow Hager Lawrance v. Lord Norreys, (1890) 15 App Cas 210, Lord Watson referred to the observations of Earl Selborne in Wallingford v. Mutual Society, (1880)5 App Cas 685 (697): General allegations, however strong may be the words in which they are stated, are insufficient to amount to an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aboration with the foreign companies. No particulars about advertising campaign have been given to indicate how the misrepresentation has been made and how it is fraudulent. Misrepresentation and fraud are alleged by the use by ITC of the aforesaid brand name on the packets of the cigarettes manufactured by it in the circumstances mentioned above. Even about the effect of the alleged misrepresentation on the minds of the public, the plaintiffs are not precise, as instead of being categorical, they have alleged that the impression created is either that they are of foreign make or that they are manufactured and sold in collaboration with the foreign companies. The plaintiffs have annexed a photostat copy of some of the packets of cigarettes manufactured by ITC as annexure II . A bare perusal of the packets shows that they do not carry any misrepresentation of the kind alleged by. them. Each of the packets contains an endorsement MADE IN INDIA and either a legend A PRODUCT OF I.T.C. LTD. or a legend A BRAND OWNED BY I.T.C. LTD . Along with the brand name is written the letter T in a circle to indicate that it is the trade mark of ITC. The address of ITC Ltd., is given on eac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rofess to have filed the suit in order to prevent ITC from practising deceit in the name of public interest. It is clear that the plaintiffs are aware at least now of the true factual position that the product of ITC bearing the aforesaid brand name is neither of foreign origin nor is being manufactured with any foreign collaboration. The same must also be true about those for whose alleged benefit, they have brought the suit, for the alleged beneficiaries cannot, obviously, be presumed to be in dark. That is apart from the fact that no suit in the nature of public interest litigation, except as provided for specifically in Section 91 and Order 1, Rule 8, CPC, if the procedure prescribed there can be said in any sense, to provide for litigation of that kind is permissible. Where the allegations made in the plaint do not constitute cause of action, the mere allegation that they have purported to bring the suit in public interest, does not have the magic of making good the deficiency. When the plaintiffs and all others placed in their situation are aware of the true facts, there is absolutely no question of their acting on any misrepresentation and, in consequence, of being deceived. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , observation was made at page 64 - It is of the essence of an action for passing off to show, first, that there has been an invasion by the defendant of a proprietary right of the plaintiff, in respect of which the plaintiff is entitled to protection, and, secondly, that such invasion has resulted in damage or that it creates a real and tangible risk that damage will ensue. Again in Erven Warnink B. V. v. J. Townend Sons (Hull) Ltd., 1980 RPC 31 : (1979 (2) All ER 927), which was the House of Lord's decision, Lord Diplock identified at page 93, five characteristics which must be present in order to create a valid cause of action for passing off (at pp. 932-33 of All ER): 1) a misrepresentation, (2) made by a trader in the course of trade, (3) to prospective customers of his or ultimate consumers of goods or services supplied by him, (4) which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably foreseeable consequence), and (5) which causes actual damage to a business or goodwill of the trader by whom the action is brought or (in a quia timet action) will probably do so. In Ruston Hornby Ltd. v. Z. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Trade Merchandise Marks Act, 1958, which prohibits the registration as trade mark of a mark the use of which would be likely to deceive or cause confusion. Reference is also been made to Section 12(1) of the same Act which says that save as provided in sub-section (3), no trade mark shall be registered in respect of any goods or description of goods which is identical with or deceptively similar to a trade mark which is already registered in the name of a different proprietor in respect of the same goods or description of goods. Reference is also made to the commentary of Dr. Venkateswaran in support of his contention where it is stated that Section 11 exists not merely for the benefit of other traders but for the benefit of the public at large. The interests of the public are of greater importance than the relative rights of the parties with the result that although the opponent might be estopped by his conduct from opposing registration yet in the public interest the tribunal must take cognizance of any fact that would render registration improper. In considering an objection under Section 12(1), the primary duty of the tribunal is towards the public and the maintenan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for declaration or injunction. If it were otherwise, the tort or deceit would be otiose, for, no one would like to prefer a cause calling for a higher burden of proof and promising an inferior remedy. Confusion is not a tort unless it amounts to deceit. It is one of the several ingredients for a 'passing off action. When the relief of declaration or injunction is not available to a plaintiff on a cause of action of deceit, it would be wholly irrational to say that such a relief would be available on the allegation of confusion or likelihood of confusion, which may be occasioned even without the presence of the element of fraud, even of misrepresentation which must be present in deceit. If a plaintiff is confused without a misrepresentation by the defendant, it is a sign of plaintiffs weakness and there is no reason why the defendant should suffer for the weakness of the plaintiff. However, the matter is different in a passing| off action, but even there, the plaintiff does not have a cause for a declaration or injunction on the allegation of confusion about himself, he has a cause of action for the confusion caused or likely to be caused to others by an act of the defendant. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decided by the Chancery Division on June 17, (1882) 21 Ch D 752. In that case, the defendant company had without any power (for their powers had come to an end) thought fit to do certain acts which undoubtedly tended in their nature to interfere with public rights, and so tended to injure the public. The question was whether, under such circumstances, the Attorney-General was justified in interfering, though there was no evidence of actual injury to the public. Fry, J. held that he was entitled to do so. The other case is the decision of the Queen's Bench Division in the Attorney-General on the Relation of the Warwickshire County Council v. The London and North Western Railway Company decided in November 10, 1898, 1 QB 72. In that case, the railway-company, under a particular statute, had the power to cross a level crossing at a speed not greater than four miles an hour, but they constantly drove their trains at a speed exceeding that limit. Upon an information, filed by the Attorney-General, it was held that as the information had been filed to enforce the express terms of an Act of Parliament, an injunction must be granted, although there was no evidence of any injury to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us, neither its manufacture, nor its sale, nor its advertisement, nor its consumption is prohibited. Therefore, the use of the mark which results in an increase in the sale of cigarettes does not give a cause of action for an action of public nuisance. Nor does that act amounts to any other wrongful act. It will be profitable to bear in mind that Section 91 does not create any new legal right. It only provides for the procedure in cases of public nuisances and other wrongful acts affecting the public, where no special damage has been caused to such persons by reason of such public nuisance or other wrongful act. There are many forms of harm of which the law takes no account. Damage so done and suffered is called damnum sine injuria. Undoubtedly, such a harm is not comprehended within the expression, 'other wrongful act' affecting the public, occurring in Section 91. Thus the allegations about public nuisance and other wrongful act also do not constitute any cause of action in the present case. 22. The other cause of action on which the plaintiffs have relied upon is unfair trade practice. In paragraph 1 of the plaint, they have alleged that the suit is to prevent the def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o dispute that the guidelines were published much after ITC started using the aforesaid brand name. Furthermore, the guidelines do not create any legal right or legal obligations. As such the allegations regarding guidelines also do not constitute any cause of action. 25. During arguments, reference was made to the Supreme Court decisions in Fertiliser Corporation Kamagar Union v. Union of India, AIR 1981 SC 344, S. P. Gupta v. President of India, AIR 1982 SC 149 D. S. Nakara v. Union of India, AIR 1983 SC 130 and Bandhua Mukti Morcha v. Union of India, AIR 1984 SC 802 on the question whether the plaintiffs have the locus standi to bring the suit as public interest litigation. Since the plaint does not disclose any cause of action, the question as to the locus standi of the plaintiffs to bring the suit does not survive. As observed in S. P. Gupta v. President of India AIR 1982 SC 149 at page 195, there is a vital distinction between locus standi and justiciability and it is not every default on the part of the State or a public authority that is justiciable. The question as to locus standi arises for decision, only if there is a justiciable cause before the Court. There is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he decision is not the result of whim or fancy, but of a judicial approach to the matter in contest : it is also intended to ensure adjudication of the matter according to law and the procedure established by law. A party to the dispute is ordinarily entitled to know the grounds on which the Court has decided against him, and more so, when the judgment is subject to appeal or revision. The appellate or a revision Court will then have adequate material on which it may determine whether the facts are properly ascertained, the law has been correctly applied and the resultant decision is just . 29. Mr. Desai went through substantially the whole of the impugned judgment making comments to make his point. After a careful consideration of the entire matter, I find myself with no choice except to agree with him. The learned District Judge has referred to the pleadings of the parties. He has even referred to the written statement of ITC, even though it was not necessary to refer to it, for the question as to whether the plaint discloses cause of action has to be decided on the pleadings of the plaintiffs. He has also made an elaborate reference to the submissions made by both the couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, which was undoubtedly binding on him that, if the plaint does not disclose a clear right to sue, the Trial Court should exercise its power of rejecting the plaint under Order VII rule 11, CPC. Law is clear even on a reading of the bare provision. The fact that the decision had been rendered in a case where repeated suits had been filed to prevent the execution of a decree of ejectment does not in any manner make inapplicable to the present case the legal principle that the Court has to reject the plaint under Order VII rule 11, CPC, where the plaint does not disclose any cause of action. 30. Paragraph 20 of the judgment runs as under: 20. In the instant case the plaintiffs case has been that the defendants' have been selling their products with the trade mark which is identical with the registered trade mark of the two English companies in England whose reputation is still well known throughout the world thereby leading the unwary smokers and purchasers to confusion and deception. The plaintiffs have filed one letter written by M/s Fox and Gibbons dated 12th September, 1989 addressed to a Malaysian Oil Company who apparently enquired about the mark W.D. H.O. Wills ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is not sustainable. Instead of saying how the plaint discloses cause of action, it has been said that, the contention that the plaint does not disclose cause of action is not sustainable. It was essential to specify with precision how the plaint disclosed cause of action, if the contention of ITC, was not found sustainable but this was not done, and instead, it was said that there was a serious question to be tried. Even that serious question was not specified. That might mean the plaintiffs allegation that they were confused and deceived. For deciding an application under Order VII, Rule 11, it is not necessary to decide whether the question is serious or not. It is enough, if there is a question which calls for decision. That would be so, if the bundle of facts pleaded by the plaintiffs on proof of admission make out a case for some relief to the plaintiffs. The impugned judgment nowhere says how the allegation about confusion and deception is sufficient to constitute any cause of action. I have already held that the mere allegation that the plaintiffs were deceived or confused or are likely to be deceived or confused is not sufficient to constitute the tort of deceit and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ontention of the defendant No. 2 that since the plaintiffs did not claim any damage in terms of money the suit in its present form cannot be sustained, as correct, it would lead to an absurd situation. If the plaintiffs could show during the trial that their allegations are well founded or substantiated by sufficient materials the Court cannot remain a silent spectator because the Courts always got to have the interest of the public in mind while deciding such a serious conflict between the parties. It is highly undesirable that in the wake of such serious allegations the public should be put in a position where they are likely to be deceived or confused . Thus the learned District Judge was prolific in irrelevancies and avoided the relevant question which of the allegations constituted which cause of action, if the plaint disclosed any cause of action, in his view. The argument that a tort of deceit gives cause only for damages cannot possibly be met by saying that such an argument would lead to an absurd situation. If several ingredients must be present to constitute a cause of action, it is not open to any one to say that he will treat the presence only of one or a few as suffic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r was without jurisdiction, that the plaint did not disclose cause of action and that the application under Order 39, Rules I and 2 CPC did not disclose any ground for any ex parte injunction and the fact that even then the Hon'ble Supreme Court, after hearing the learned counsel for both the parties, had been pleased only to modify the injunction order permitting the production and manufacture and limiting the injunction to marketing only subject to further orders that might be made by the trial Court, showed that the Hon'ble Supreme Court was not convinced with the grounds as stated above by ITC. The learned District Judge has further stated that if the Hon'ble Supreme Court was convinced that the impugned order had been passed without jurisdiction and the suit did not disclose any cause of action as alleged, perhaps, the Hon'ble Court would have quashed the impugned order instead of passing the modified order of injunction . To say the least, the inference drawn by the learned District Judge is entirely unwarranted. The fact that the Hon'ble Supreme Court did not quash the impugned order in its entirety does not mean that the Hon'ble Court was convinced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ercise of his jurisdiction illegally. For this reason, and also because on a consideration of the facts and the relevant law, I have come to the conclusion that the plaint does not disclose any cause of action, and so is liable to be rejected. 34. As regards costs, the general rule is that the costs should follow the event. The object of awarding costs is to indemnify a party against the expense of successfully vindicating his rights in Court. The quantum of costs that the Court awards has relation to the valuation of the suit. In the present case, the plaintiffs and ITC secured the services of more than one lawyer from outside, besides local counsel. Expenses in terms of fees, transport, boarding and lodging must be so enormous that the costs which the Court may allow as per the usual practice, may look to be illusory, for the recovery of which the successful party like ITC who has no office in Sikkim and who may have to again engage a lawyer from outside, may have to incur an expense which may well exceed the amount of the costs that may be awarded. The purpose of awarding costs is to compensate the winning party and not to penalise it. But, for the recovery of the costs that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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