E.A. ABOOBACKER & ORS. versus STATE OF KERALA & ORS.

E.A. ABOOBACKER & ORS.

STATE OF KERALA & ORS.

(Civil Appeal No. 2772 of 2011)

SEPTEMBER 27, 2018

[MADAN B. LOKUR AND DEEPAK GUPTA, JJ.]

Land Acquisition Act, 1894 – ss.3(c), 4(1), 17(1) and 17(4) –Special Tahsildar if empowered to perform the functions of theCollector under the Act – State Government acquired land in itsdistrict for purpose of the Infopark and invoked the urgency clauseu/s.17(1) of the Act – Thereafter, notification was issued u/s.4(1) ofthe Act – According to appellants their separate land was sought tobe acquired along with the land of others – Appellants contendedthat Special Tahsildar was not entitled to perform the functions ofCollector in respect of other acquisitions for which he was notempowered under the Act – Held: notification dated 21.08.1989was issued by the State Government appointing Special Tahsildarto perform the functions of Collector only in respect of any landwithin his jurisdiction for the acquisition of which notificationunder sub-section(1) of s.4 of the Act was published – SpecialTahsildar was not empowered by the notification to issue any freshnotification in respect of other land – Notification dated 21.08.1989was followed by an explanatory note, which resolved the ambiguity– It clearly indicated that notification was issued only to empowerthe officer to act as Collector in respect for which the notificationunder sub-section(1) of s.4 had already been issued – If the Statewanted him to act as Collector in respect of other acquisitions,nothing prevented the State from issuing fresh notification in thisregard, but relying upon the notification dated 21.08.1989 theSpecial Tahsildar could not have acted as Collector in respect ofother acquisitions.

Allowing the appeals, the Court

HELD: 1. On perusal of the notification dated 21.08.1989it is apparent that by the said notification the Government ofKerala had appointed an officer by the name of Special Tahsildar(LA), K.R.L., to perform the functions of Collector under the

AAct only within the area of Ernakulam District, only in respect ofany land within his jurisdiction for the acquisition of which anotification under sub-section (1) of Section 4 of the LandAcquisition Act, 1894 has been published. [Para 8] [268-G]

2. On careful analysis of the said notification, the StateBhas empowered the specified officer i.e. the Special Tahsildar(LA), K.R.L. only in respect of the land for which the notificationunder sub-section (1) of Section 4 had already been issued. TheSpecial Tahsildar (LA) K.R.L. was not empowered by thenotification of 21.08.1989 to issue any fresh notification in respectof other land. Though the explanatory note may not be part ofCthe notification the same can definitely be used to resolve theambiguity, in the notification. The explanatory note clearlyindicates that the notification has been issued only to empowerthe officer to act as Collector in respect of 320 acres of land.[Para 9] [269-A-C]D3. The High Court erred in taking the view that since publicinterest is concerned liberal view has to be taken and whenacquisition proceedings are completed or going on for acquiringlarge portions of lands required for public purpose, suchacquisition cannot be stopped on “cryptic hyper-technicalEground”. It is settled position of jurisprudence that when thelaw prescribes procedure to be followed for doing any act orthing then that procedure has to be followed and any violation ofsuch procedure would make the act voidable, if not void. Thereis no doubt that the State is empowered to appoint any officerother than Collector or Deputy Commissioner to act asFCollector. However, the notification should be clear as to forwhat purpose such Collector is being appointed. As far as thepresent case is concerned the Special Tahsildar (LA), K.R.L.was appointed as Collector only in respect of the acquisition ofland relating to Cochin Refineries Limited within ErnakulamGDistrict. If the State wanted him to act as Collector in respect ofother acquisitions, nothing prevented the State from issuing afresh notification in this regard, but relying upon the notificationdated 21.08.1989 the Special Tahsildar (LA), K.R.L. cannot actas Collector in respect of other acquisitions. This is not hyper-technical ground. When the State wants to acquire the propertyH

of citizen which is constitutional right of any citizen underArticle 300(A) of the Constitution of India it must strictly followthe procedure prescribed by law. It cannot urge that becausethe acquisition is in public interest more liberal view is to betaken. There is no question of taking liberal or conservativeview. The only view which has to be taken is the legal view. TheSpecial Tahsildar (LA), K.R.L. was not authorized to act asCollector for the entire District of Ernakulam and is empoweredonly in respect of acquisitions for which notification had alreadybeen issued for acquiring land for the Cochin Refineries Limited.[Para 11] [289-D-H; 270-A-B]

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2772of 2011.

From the Judgment and Order dated 06.01.2009 of the High Courtof Kerala at Ernakulam in W.A. No. 2446 of 2008

WITH

Civil Appeal Nos. 2773-2774 and 2775 of 2011.

R. Venkataramani, Sr. Adv., Ms. Bindu K. Nair, Shinu J. Pillai,Yashraj Bundela, Praveen Vignesh, Sushant Singh, Babby Augustine,V. K. Sidharthan, Ranjith K. C., Mayilsam K, Ninargam R. Maurya(for V. N. Raghupathy), Advs. for the Appellants.

Basant R., K. N. Balgopal, Sr. Advs., Sajith P., Mohd. Monish,G. Prakash, Jishnu M. L., Ms. Priyanka Prakash, Ms. Beena Prakash,Advs. for the Respondents.

The Judgment of the Court was delivered by

DEEPAK GUPTA, J. 1. The short question which arises in theseappeals is whether the Special Tahsildar (Land Acquisition), CochinRefineries Limited, Ernakulam, Vytilla, Cochin-19 [hereinafter referredto as “the Special Tahsildar (LA), K.R.L.”] was empowered to act asCollector under the Land Acquisition Act, 1894 (hereinafter referred toas “the Act”), in respect of lands acquired by the State for an Infopark.

2. On 05.12.2005, the Government of Kerala accordedadministrative sanction to acquire 177.79 acres of land in Ernakulamdistrict for the purpose of the Infopark. The Government also accordedsanction to invoke the urgency clause under Section 17(1) of the Act.Thereafter, on 15.12.2005, the District Collector, Ernakulam issued aGovernment Order appointing the Special Tahsildar (LA), K.R.L. as the

ALand Acquisition Officer for the acquisition of land for the Infopark.Thereafter, notification was issued under Section 4(1) of the Act. Inthe said notification, it is mentioned that in view of the order of theGovernment, application of Section 5(A) of the Act has been exemptedby invoking the powers under Section 17(4) of the Act. According tothe appellants 23.92 acres of land belonging to them was sought to beBacquired along with the land of others. The appellants filed objectionsunder Section 5A(1) of the Act. According to them no action was takenon their objections and, thereafter, they filed Writ Petition No.9735 of2008 in the High Court of Kerala seeking various reliefs includingquashing of the notification issued under Section 4(1) and 17(4) of theCAct. The main ground raised was that the Special Tahsildar (LA), K.R.L.was not entitled to perform the functions of Collector under the Act.The stand of the State was that the Special Tahsildar (LA), K.R.L. wasentitled to act as Collector for the entire Ernakulam District and wastherefore empowered to act as Collector even in relation to land acquiredfor the Infopark. The writ court dismissed the writ petition in so far asDthis objection was concerned. The appellants filed Writ Appeal No.2446of 2008 which was also dismissed on 06.01.2009.

3. We have heard Shri R. Venkataramani, learned senior counselfor the appellants, Shri Basant R., learned senior counsel appearing forInfopark and Shri K.N. Balgopal, learned senior counsel appearing forEthe State of Kerala.

4. Collector has been defined under Section 3(c) of the Act asfollows :-

“(c) the expression “Collector” means the Collector of district,and includes Deputy Commissioner and any officer speciallyFappointed by the appropriate Government to perform the functionsof Collector under this Act;”

bare reading of the provision makes it amply clear that theCollector and the Deputy Commissioner of District are, by virtue oftheir office, deemed to be “Collector” within the meaning of the Act.GThe appropriate Government is also empowered under Section 3(c) tospecially appoint any other officer to perform the functions of Collector.It is obvious that the State has to issue specific notification to appointany other officer to perform the duties of Collector. The State may in itswisdom appoint such officer for the entire district or for special project.

5. Section 4(1) of the Act reads as follows :-

4. Publication of preliminary notification and powers ofofficers thereupon.- (1) Whenever it appears to the appropriateGovernment that land in any locality is needed or is likely to beneeded for any public purpose or for company notification tothat effect shall be published in the Official Gazette and in twodaily newspapers circulating in that locality of which at least oneshall be in the regional language, and the Collector shall causepublic notice of the substance of such notification to be given atconvenient places in the said locality (the last of the dates of suchpublication and the giving of such public notice, being hereinafterreferred to as the date of publication of the notification).

6. In the present case, the controversy revolves around thenotification dated 21.08.1989, which reads as follows:

Government of KeralaRevenue (B) Department NOTIFICATION

No.51590/BI/89/RD Dated, Trivandrum, 21[st] August, 1989

S.R.O No. 1743/89-In exercise of the powers conferred byclause(c) of Section 3 of the Land Acquisition Act, 1894 (CentralAct 1 of 1894) the Government of Kerala hereby appoint theSpecial Tahsildar (Land Acquisition), Cochin Refineries Limited,Ernakulam Vytilla, Cochin-19 to perform the functions of collectorunder the said Act within the area of Ernakulam District and undersub section 2 of section 4 of the said Act, authorize him, his servantsand workmen in exercise of the powers conferred under the saidsub section in respect of any land within his jurisdiction for theacquisition of which notification under sub-section (i) of section4 has been published.

By order of the GovernorT . Sankaran,

Additional Secretary to Government

Explanatory Note

(This does not form part of the notification but is intended to

indicate its general purport.)

AAs per the Government Order (MS) No. 1/89/ID dated 15.04.1989Government have sanction creation of new special Land AcquisitionUnit with 30 staff for the acquisition of 320 acres of land for the expansionof Cochin Refineries Limited, Ambalamugal. In order to perform thefunction of ‘Collector’ under the Land Acquisition Act, the LandAcquisition Officer has to be authorized under Section 3 (c) of the LandBAcquisition Act. Hence the notification.

It has been urged by the State that the explanatory note not beingpart of the notification should not be taken into consideration.

7. According to the appellants the language of the notification isCvery clear that the Special Tahsildar (LA), K.R.L. has been appointedas Collector only in respect of those lands for which the notification ofacquisition under Section 4 has already been published. Therefore,according to the appellants, the Special Tahsildar (LA), K.R.L. has nopower to act as Collector in respect of other acquisitions for which he isnot empowered under the notification. The appellants also place relianceDon the explanatory note and submit that though it may not be part of thenotification but it clearly indicates that the appointment of the SpecialTahsildar (LA), K.R.L. was only in respect of 320 acres of land involvedin the expansion of Cochin Refineries Limited and not for any otherpurpose. On the other hand, the stand of the respondents is that by thisEnotification the Special Tahsildar (LA) K.R.L. has been specificallyappointed as “Collector” for Ernakulam District and is, therefore,empowered to act as Collector for all acquisitions of land in ErnakulamDistrict. It has been submitted on behalf of the State that the words“has been” cannot be read only in the past tense and the words “hasbeen” may be read as “is”. It is also contended that the District CollectorFhas distributed the work to the Special Tahsildar (LA), K.R.L. vide orderdated 15.12.2005.8. On perusal of the notification it is apparent that by the saidnotification the Government of Kerala had appointed an officer by thename of Special Tahsildar (LA), K.R.L., to perform the functions of aGCollector under the Act only within the area of Ernakulam District, onlyin respect of any land within his jurisdiction for the acquisition of whicha notification under sub-section (1) of Section 4 of the Act has beenpublished.

9. On careful analysis of the notification, in our opinion, theState has empowered the specified officer i.e. the Special Tahsildar(LA), K.R.L. only in respect of the land for which the notification undersub-section (1) of Section 4 had already been issued. The Special Tahsildar(LA) K.R.L. was not empowered by the notification of 21.08.1989 toissue any fresh notification in respect of other land. Though theexplanatory note may not be part of the notification the same candefinitely be used to resolve the ambiguity, if any, in the notification. Theexplanatory note clearly indicates that the notification has been issuedonly to empower the officer to act as Collector in respect of 320 acresof land.

10. As far as the G.O. dated 15.12.2005 is concerned, all that weneed to say is that under Section 3(c) of the Act, it is only the appropriateGovernment which can specifically appoint any other officer as Collector.The District Collector has no power to do so.

11. The High Court took the view that since public interest isconcerned liberal view has to be taken and when acquisition proceedingsare completed or going on for acquiring large portions of lands requiredfor public purpose, such acquisition cannot be stopped on “cryptic hypertechnical ground”. We are not at all in agreement with this view of theHigh Court. It is settled position of jurisprudence that when the lawprescribes procedure to be followed for doing any act or thing thenthat procedure has to be followed and any violation of such procedurewould make the act voidable, if not void. There is no doubt that theState is empowered to appoint any officer other than Collector orDeputy Commissioner to act as Collector. However, the notificationshould be clear as to for what purpose such Collector is being appointed.As far as the present case is concerned the Special Tahsildar (LA),K.R.L. was appointed as Collector only in respect of acquisition of landrelating to Cochin Refineries Limited within Ernakulam District. If theState wanted him to act as Collector in respect of other acquisitions,nothing prevented the State from issuing fresh notification in this regard,but relying upon the notification dated 21.08.1989 the Special Tahsildar(LA), K.R.L. cannot act as Collector in respect of other acquisitions.This is not hyper technical ground. When the State wants to acquirethe property of citizen which is constitutional right of any citizen

Aunder Article 300(A) of the Constitution of India it must strictly followthe procedure prescribed by law. It cannot urge that because theacquisition is in public interest more liberal view is to be taken. Thereis no question of taking liberal or conservative view. The only viewwhich has to be taken is the legal view. In our considered opinion theSpecial Tahsildar (LA), K.R.L. was not authorized to act as CollectorBfor the entire District of Ernakulam and is empowered only in respect ofacquisitions for which notification had already been issued for acquiringland for the Cochin Refineries Limited.12. It has been urged by Shri K.N. Balgopal that Special Tahsildar(LA), K.R.L. has acted as Collector not only in the case of Infopark butCin many other cases and many land owners have accepted the awardand if we decide the matter against the State many complications mayarise. We, therefore, make it clear that if any land owners have, withoutany objection to the authority of the Special Tahsildar (LA) K.R.L.,accepted the award of the Collector or have filed objections with regardDto quantum and area only and have not disputed the authority of theSpecial Tahsildar (LA) K.R.L. to act as Collector, such land ownerscannot take benefit of this decision. As far as this decision is concernedit will only enure for the benefit of the appellants before us.

13. The appeals are accordingly allowed. Pending application(s)Eif any is also allowed. The judgments and orders of the High Court inWrit Appeal No.2446 of 2008 dated 06.01.2009 and Writ Petition No.9735of 2008 dated 25.11.2008 are set aside in the aforesaid terms. We alsomake it clear that no other point was raised before us and, therefore, theState can take appropriate action in accordance with law if it still wantsto acquire the land.F

Ankit Gyan

Appeals allowed.

[2018] 12 S.C.R. 271

WOCKHARDT LIMITED

TORRENT PHARMACEUTICALS LTD. AND ANR.

(Civil Appeal No. 9844 of 2018)

SEPTEMBER 12, 2018

[R. F. NARIMAN AND INDU MALHOTRA, JJ]

Trademark: Infringement and passing off – Respondenthaving trade mark ‘CHYMORAL and CHYMORAL FORTE, drugadministered post surgically for swellings/wounds – ExpressionCHYMO comes from the generic name of drug which isCHYMOTRYPSIN-TRYPSIN – In 2014, the appellant acquiredtrademark CHYMTRAL with full notice of respondent no 1’sregistration – Suit for infringement and passing off by respondent– Injunction refused by the Single Judge of the High Court holdingthat confusion may be assumed, but not deceit or deception and nomisrepresentation by appellant as to source, even assuming there issimilarity – Division Bench held that the substitution of letter “T’for the letter “O’ is the only difference between the two trade names,confusion on the ground of deceptive similarity would ensue,misrepresentation in law also made out, thus granted temporaryinjunction – On appeal, held: Though passing off is, in essence, anaction based on deceit, fraud is not necessary element of rightof action, and that the appellant’s state of mind is wholly irrelevantto the existence of cause of action for passing off, if otherwisethe appellant has imitated or adopted the respondent’s mark – Onfacts, after 17.11.2017, the appellant started to sell the same productunder new trade name, ‘CHYMOWOK’ and sales figure for thelast 10 months under this new trade name amounted to Rs. 2.71Crores – This trade name was registered in the name of the appellantway back on 14.11.2009 with effect from date in 2008, but hadnot been utilized till the Division Bench judgment was passed againstthe appellant – Remaining stock of material has been disposed ofunder the trade name “CHYMTRAL”, and that materialmanufactured after the Division Bench judgment is not being soldunder the said trade name despite the stay granted in favour of the

CDE

Aappellant – In view of the appellant’s sale under the “new” tradename being substantial, the discretionary jurisdiction u/Art. 136 isnot exercised in favour of the appellant – Constitution of India –Art. 136.

Wander Limited And Another v. Antox India P. Ltd. 1990B(Supp) SCC 727; Cadila Health Care Ltd. v. CadilaPharmaceuticals Ltd. (2001) 5 SCC 73; Laxmikant v.Patel v. Chetanbhai Shah and Another (2002) 3 SCC65; S. Syed Mohideen vs. P. Sulochana Bai (2016) 2SCC 683; Satyam Infoway Ltd. v. Siffynet Solutions Pvt.Ltd. (2004) 6 SCC 145– referred to.C

Case Law Reference

CIVIL APPELLATE JURISDICTION: Civil Appeal No. 9844of 2018E

From the Judgment and Order dated 17.11.2017 of the High Courtof Judicature at Bombay in Commercial Appeal No. 125 of 2017.

Mukul Rohatgi, Guru Krishna Kumar, Dr. A. M. Singhvi, Sr. Advs.,Ninad Laud, Ms. Smriti Churiwal, Ivo D’Costa, Aman Varma, AsimFSood, Nandan Pendsey, Ms. Madhavi Khanna, Ms. Bhargavi Kannan,Rythm B., Ms. Aishwarya Modi, Ms. Liz Mathew, Advs. for theappearing parties.

The Judgment of the Court was delivered by

R. F. NARIMAN, J. 1. Leave granted.G

2. The present Appeal arises from Suit that was filed based onboth infringement and passing off. However, at the time of the argumenton the interim injunction before the learned Single Judge, the argumentswere confined to passing off only.

3. The skeletal facts necessary to decide this Appeal are that thePlaintiff/Respondent has trade mark called “CHYMORAL” and“CHYMORAL FORTE”, which is drug administered post-surgicallyfor swellings that may arise and/or wounds that may arise. It is interestingto note that the expression “CHYMO” comes from the generic name ofthe drug which is CHYMOTRYPSIN-TRYPSIN. The learned SingleJudge ultimately found, after copious reference to the facts and caselaw, as follows:-

“45. In the present case, I am not satisfied that any of these testsare met. Reputation as to source is not sufficiently demonstrated.The rival products have long co-existed and I cannot and will notpresume misrepresentation by Wockhardt as to source, evenassuming there is similarity. There is no explanation at all forTorrent’s past conduct and the inaction with knowledge, or deemedknowledge, of Wockhardt’s trade mark registration application,its advertisement and subsequent registration, with not singleobjection from Torrent or is predecessor-in-title. There is noanswer about the caveats or about the co-existence of otherplayers in the market. There is simply no misrepresentation shownas required by law, at this prima facie stage. There being noprima facie case made out, I cannot grant the injunction. Thebalance of convenience seems to me to favour entirely theDefendants; after all, to the Plaintiff’s knowledge, they have hadtheir product in the market for very long time, at the very leastfor five years, possibly more, and an injunction at this stage is farremoved from the prima facie status quo that Wander v Antoxtells us is the primary objective. There is no injury, let alone anirreparable one, to the Plaintiff that I can tell if an injunction isrefused. It has not had one all this time while the Defendants’business has grown into crores. To grant the injunction would beunfairly monopolistic.”

4. The Division Bench, in an order of reversal, ultimately foundthat each one of the triple tests for passing off had been made out on thefacts, namely, the establishment of reputation, misrepresentation asunderstood in law and likelihood of injury or damage caused to thePlaintiff. On the first count, the Division Bench held that the Plaintiffhad obtained the mark by way of assignment in the year 2014, from one

AElder and Company, which, in turn, had obtained the said mark from oneArmour Pharmaceutical Company. The user that is claimed on behalfof the Plaintiff is at least from the year 1988 as and when ElderPharmaceuticals Ltd. actually sold drugs under the two trade names asaforesaid. The Division Bench also referred to the Plaint which, in turn,referred to sales figures of Rs. 59 Crores and Rs. 95 Crores for theByears 2014-15 and 2015-16 respectively. Having thus found, the DivisionBench then went on to state that it is clear that reputation has beenestablished. When it came to misrepresentation, the Division Benchfound that confusion was likely to ensue despite the fact that thepurchasers of the drug, which is Schedule-H Drug, may be personsCwho are Doctors and other patients who are literate. It found that thesubstitution of the letter ‘T’ for the letter ‘O’ is the only differencebetween the two trade names, and therefore, found that, in law, sinceconfusion on the ground of deceptive similarity would ensue,misrepresentation in law is also made out. On the third count, it said,undoubtedly, there would be likelihood of damage to the Plaintiff.D

5. The Division Bench interfered with the conclusion of the learnedSingle Judge by ultimately finding that wrong tests had been applied inlaw as result of which the judgment was “vitiated by errors of lawapparent on the face of the record”. It further went on to hold as follows:-

E“102. After referring to the order of the learned single Judge, inthe backdrop of the settled principles, we are of the view that it isvitiated by errors of law apparent on the face of the record. Theimpugned order is, ex-facie, erroneous and illegal. It ignoresadmitted factual materials and settled tests while denying relief tothe appellant-plaintiff. For these reasons, it is unsustainable andFwe have no alternative, but to quash and set aside the same. It is,accordingly, quashed and set aside.”

It, therefore, upset the judgment of the learned Single Judge and grantedthe temporary injunction asked for. It went on to stay the order for aperiod of 12 weeks, which stay has been continued by this Court tillGdate.

6. Mr. Guru Krishna Kumar, learned Senior Counsel appearingon behalf of the appellant, has vehemently contended that the DivisionBench judgment should be set aside as it has disregarded this Court’s

judgment in Wander Limited And Anothervs. Antox India P. Ltd.1990(Supp) SCC 727, in particular, para 14 thereon, which reads as under:-

“14. The appeals before the Division Bench were against theexercise of discretion by the Single Judge. In such appeals, theAppellate Court will not interfere with the exercise of discretionof the court of first instance and substitute its own discretion exceptwhere the discretion has been shown to have been exercisedarbitrarily, or capriciously or perversely or where the court hadignored the settled principles of law regulating grant or refusal ofinterlocutory injunctions. An appeal against exercise of discretionis said to be an appeal on principle. Appellate Court will notreassess the material and seek to reach conclusion differentfrom the one reached by the court below if the one reached bythat court was reasonably possible on the material. The appellatecourt would normally not be justified in interfering with the exerciseof discretion under appeal solely on the ground that if it hadconsidered the matter at the trial stage it would have come to acontrary conclusion. If the discretion has been exercised by thetrial court reasonably and in judicial manner the fact that theappellate court would have taken different view may not justifyinterference with the trial court’s exercise of discretion. Afterreferring to these principles Gajendragadkar, J. in Printers(Mysore) Private Limited vs. Pothan Joseph, 1963 SCR 713at 721:

“... These principles are well established, but as has beenobserved by Viscount Simon in Charles Osenton & Co. v.Jhanaton, 1942 AC 130, ‘…... the law as to the reversal by acourt of appeal of an order made by judge below in theexercise of his discretion is well established, and any difficultythat arises is due only to the application of well settled principlesin an individual case.’

The appellate judgment does not seem to defer to this principle.”

According to learned Senior Counsel, the Single Judge Bench summationat para 45 could not have been interfered with by the Division Benchbecause the law had been looked at threadbare, and ultimately it wasfound that not only had none of the three tests being satisfied but that

Athere was clearly case of acquiescence made out, for which the Plaintiffhas to be denied interim relief. He referred to several judgments tobuttress his submissions.

7. On the other hand, Dr. A.M. Singhvi, learned Senior Counselappearing on behalf of the respondents, has supported the judgmentBpassed by the Division Bench, also, by copiously referring to variousjudgments and by stating that the Division Bench judgment, in fact, upsetthe learned Single Judge because of errors of law and, therefore,interfered on principle and not on fact. He was at pains to point out thatreputation had been established by the sales figures from 1988 onwards;“misrepresentation” had been made out in the said sense understood inClaw, that is, that absence of an intention to deceive is not defence inlaw, and that the defendant’s state of mind is wholly irrelevant to theexistence of the cause of action in passing off. He stressed the fact thatas reputation had been made out, and as the learned Single Judge himselfhad said that “confusion” had been made out, the learned Single JudgeDwas wholly wrong in stating that further requirement was necessary,namely, fraud or deceit. On the third aspect, it was also pointed out thatit is obvious that there would be likelihood of damage to the Plaintiff.Assuming that there was no damage caused to the general public, becausethe drug being sold unlike in Cadila Health Care Ltd. vs. CadilaPharmaceuticals Ltd. (2001) 5 SCC 73 consisted of the sameEformulation, yet this would not deny them the right to interim relief, andthat is only further factor that needs to be taken into account , also tocombat the plea of acquiescence.

8. Having heard learned Senior Counsel for some time, we maypoint out that the learned Single Judge, after referring to the case law,Fpointed out in para 27 as follows:- “I think I must accept Mr. Dwarkadas’ssubmission that confusion may be assumed, but not deceit or deception.”.In para 45, the learned Single Judge went on to state that he would notpresume misrepresentation by Wockhardt as to source, even assumingthere is similarity.G

9. We may indicate, at this juncture, that insofar as the secondtest is concerned, this Court has in plethora of judgments held thatthough passing off is, in essence, an action based on deceit, fraud is nota necessary element of right of action, and that the defendant’s stateof mind is wholly irrelevant to the existence of cause of action for

passing off, if otherwise the defendant has imitated or adopted thePlaintiff’s mark. We need only state the law from one of our judgments,namely, in Laxmikant V. Patel vs. Chetanbhai Shah and Another,(2002) 3 SCC 65, which reads as under:-

“13In an action for passing-off it is usual, rather essential, to seekan injunction, temporary or ad-interim. The principles for the grantof such injunction are the same as in the case of any other actionagainst injury complained of. The plaintiff must prove primafacie case, availability of balance of convenience in his favourand his suffering an irreparable injury in the absence of grant ofinjunction. According to Kerly (ibid, para 16.16) passing-off casesare often cases of deliberate and intentional misrepresentation,but it is well-settled that fraud is not necessary element of theright of action, and the absence of an intention to deceive is not adefence, though proof of fraudulent intention may materially assista plaintiff in establishing probability of deception. ChristopherWadlow in Law of Passing-Off (1995 Edition, at p.3.06) statesthat the plaintiff does not have to prove actual damage in order tosucceed in an action for passing-off. Likelihood of damage issufficient. The same learned author states that the defendant’sstate of mind is wholly irrelevant to the existence of the cause ofaction for passing-off (ibid, paras 4.20 and 7.15). As to how theinjunction granted by the Court would shape depends on the factsand circumstances of each case. Where defendant has imitatedor adopted the plaintiff’s distinctive trade mark or business name,the order may be an absolute injunction that he would not use orcarry on business under that name. (Kerly, ibid, para 16.97).”

This judgment has been followed in S. Syed Mohideen vs. P. SulochanaBai, (2016) 2 SCC 683 at 699-700. Also, in Satyam Infoway Ltd. vs.Siffynet Solutions Pvt. Ltd., (2004) 6 SCC 145, this Court held:-

“14The second element that must be established by plaintiff ina passing-off action is misrepresentation by the defendant to thepublic. The word misrepresentation does not mean that the plaintiffhas to prove any mala fide intention on the part of the defendant.Of course, if the misrepresentation is intentional, it might lead toan inference that the reputation of the plaintiff is such that it isworth the defendant’s while to cash in on it. An innocent

278SUPREME COURT REPORTS

Amisrepresentation would be relevant only on the question of theultimate relief which would be granted to the plaintiff [CadburySchweppes v. Pub Squash, 1981 RPC 429 : (1981) 1 AllER 213: (1981) 1 WLR 193 (PC); Erven Warnink v. Townend, 1980RPC 31 : (1979) 2 AllER 927 : 1979 AC 731 (HL)]…..”

B10. The Division Bench essentially interfered with the judgmentof the learned Single Judge on this score and also found that the learnedSingle Judge was incorrect in stating that “reputation as to source is notsufficiently demonstrated”. It found that reputation was established fromthe sales figures, and the fact that the Plaintiff was clearly prior userwould make it clear that the first pre-requisite for the action in passingCoff was made out. Where the Division Bench and the learned SingleJudge really locked horns was on the point of acquiescence. The learnedSingle Judge found that not only was there lying by for long period,but that there was positive action on the part of the Plaintiff in leadingthe defendant to believe that he could build up his business, at whichDpoint the Plaintiff swooped in to interdict and throttle that business as itwas rising just as sales were rising. On this count, the Division Benchinterfered with the learned Single Judge as follows:-“89. The learned Judge then attributes acquiescence to the plaintiff.The plaintiff’s predecessor in title did not object to the trademarkEregistration application. It allowed others to do so and it is theplaintiff’s failure to bring suit on service of caveat. Thus,there is no objection from the plaintiff. It only means that theplaintiff kept quiet when the application for registration was madeby the defendant. They failed to object to the advertisement ofthe defendant’s application or when the defendant brought itsFproject in market. They did not object to other entities introducingtheir products in the market either. This is enough to assumeacquiescence. We do not think this to be the position on facts andin law. plea of acquiescence to be raised in defence so as tosucceed ought to be supported by weighty materials to that effect.GSince the learned single Judge has referred to the judgment of theHon’ble Supreme Court in the case of M/s Power ControlAppliances and Ors. vs. Sumeet Machines Pvt. Ltd., (1994) 2SCC 448, we would refer to it in some details. Paras 4, 5, 7, 11,12, 13, 14, 15 and 16 of this judgment were heavily relied upon by

Mr. Tulzapurkar. In that, the facts and the submissions aresummarised. Then, in para 20, the argument of the respondentsbefore the Hon’ble Supreme Court was set out. In paras 27, 28,29 and 30, the English judgments were noted and up to para 31.Thereafter, the decisions rendered by our Hon’ble Supreme Courtand other courts have been noted.

90. We are in agreement with Mr. Tulzapurkar that even at thisprima facie stage, there is no positive act which can be attributedto the plaintiff so as to deny the relief. There is no acquiescencewhich can be culled out. Beyond referring to some generalprinciples, we do not find any material placed before the learnedsingle Judge from which an inference of acquiescence can bedrawn. Mr. Dwarkadas has, on this point, relied upon certainjudgments and even in the written submissions, there is referenceto general principles. All that the first defendant says is as under:-

“(ii) The defence of the acquiescence is available to RespondentNo. 1 since the plaintiff was aware of its right and the defendantwas ignorant of its own right and despite the same, the plaintiffassents to or lays by in relation to the acts of the defendant and inview of the same, it would be unjust in all circumstances to grantthe relief of injunction to the plaintiff. It is submitted that therequirements stand duly fulfilled and on the above set of factswhere from 2009/11, the Appellant/its predecessors are duly awareof Respondent No. 1’s trademark; the use of Respondent No. 1’smark openly and on an extensive scale; and at no point for over 7years did the appellant or its predecessors contest the same. Onthe contrary, the appellant’s 2014 acquisition of the trademark iswith full notice of the adoption and use and registration ofRespondent No. 1’s trademark. As such, the principles ofacquiescence and waiver apply with full vigour.

(iii) Acquiescence is species of estoppel and therefore both arule of evidence and rule in equity. It is an estoppel in pais: aparty is prevented by his own conduct from enforcing right tothe detriment of another who justifiably acted on such conduct.

(iv) The ‘positive act’ as referred to in the decision of the Hon’bleApex Court in M/s Power Control Appliances and Ors. vs.

ASumeet Machines Pvt. Ltd. reported in (1994) 2 SCC 448 (reliedupon by the appellant) cannot mean that the plaintiff ‘green lighting’the defendant’s action only to later complain of it. The ‘positiveact’ is the ‘sitting by’ or ‘laying by’ i.e., not mere silence or inactionbut refusal or failure to act despite knowledge of invasion andopportunity to stop it. In the present case, from 2009, the appellantBand/or its predecessors have been at notice of Respondent No.1’s adoption, use and registration of its trademark and against thatthere has been complete failure to register any protest orobjection. In 2014, the appellant acquired the trademark with fullnotice of Respondent No. 1’s registration and use of the trademarkC“CHYMTRAL”. This qualifies for both acquiescence and estoppeldefences.”

91. Thus, the attempt is to equate delay with acquiescence andwhich is not correct. We do not think that because the appellantsstepped in the year 2014 with notice of the first respondent’sregistration and use of the mark that means the appellant-plaintiffhas acquiesced in the same. That is not positive act and whichis required to deny the relief on the ground of acquiescence.”

11. We are of the view that this is not case where Wander Ltd.(supra) has not been heeded. On the contrary, the Division Bench hasEinterfered on matter of principle, pointing out errors of law by thelearned Single Judge. We may also point out one other significant factthat has occurred in the meanwhile. After 17.11.2017, despite the factthat the Division Bench of the High Court stayed its own order, whichstay was continued by this Court till date, the Appellant has started tosell the same product under new trade name, namely, ‘Chymowok’.FWe have been shown sales figures in the last 10 months of sales madeby the Appellant under this new trade name which amounts to figureof Rs. 2.71 Crores from 17.12.2017 till 18.08.2018.

12. We may also state, that this trade name was registered in thename of the Appellant way back on 14.11.2009 with effect from dateGin 2008, but had not been utilized till the Division Bench judgment waspassed against the Appellant. We are also told that the remaining stockof material has been disposed of under the trade name “CHYMTRAL”,and that material manufactured after the Division Bench judgment is notbeing sold under the said trade name despite the stay granted in favour

of the Appellant. Seeing the sales figures of ‘Chymowok’ fromDecember, 2017 till August, 2018 and the fact that the Appellant’s salesunder the “new” trade name are substantial, we do not think that weshould exercise our discretionary jurisdiction under Article 136 of theConstitution of India in favour of the Appellant, seeing that the balanceof convenience is well served by the judgment under appeal. The Appealis, therefore, rejected.

Nidhi Jain

Appeal rejected.