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Jagdish Gopal Kamath & Others v/s Lime & Chilli Hospitality Services P. Ltd.

    Petition No. 972 of 2012 In Suit No. 2549 of 2012

    Decided On, 22 April 2013

    At, High Court of Judicature at Bombay

    By, THE HONOURABLE MR. JUSTICE S.J. KATHAWALLA

    For the Plaintiffs: V.R. Dhond, Senior Advocate, along with Rashmin Khandekar, Ms. Bijal Trivedi, instructed by M/s. Bhagwati & Co., Advocates. For the Defendants: Dr. Veerendra Tulzapurkar, Senior Advocate, along with Amit Jamsandekar, instructed by M/s. V.A. Associates, Advocates.



Judgment Text

1. The Petitioners (Original Plaintiffs) have filed the above petition for grant of Leave under Clause XIV of the Letters Patent. The Respondents are opposing the said grant on the ground that this is a fit case for refusal of leave in exercise of the discretion conferred on the Court by Clause XIV of the Letters Patent. For the sake of convenience the Petitioners shall hereinafter be referred to as 'Plaintiffs' and the Respondents as 'Defendants'.

2. The Plaintiffs are the registered Proprietor of two trade marks 'Cafe Madras' bearing Nos. 1390976 and 1390977. The Registration Certificates are at page 30 and 31 of the Plaint. The legal proceedings certificates are at pages 93-96 of the Plaint. The above suit seeks two fold reliefs i.e. against: (i) infringement and (ii) passing off. This Court has jurisdiction to entertain the suit for infringement by virtue of the provisions of Section 134 of the Trade Marks Act, 1999 ('the Act'). The infringement action before this Court will therefore be maintainable and continue, regardless of whether leave is granted or not. The cause of action for passing off has admittedly arisen outside the jurisdiction of this Court i.e. Nashik and Jalgaon where the Defendants have opened restaurants with the name identical to that of the Plaintiffs' restaurant and also identical to the Plaintiffs' registered trade mark 'Cafe Madras'. According to the Plaintiffs, they would be entitled to file suits against the Defendants for passing of before the District Courts of Jalgaon and Nasik. However, were such suits to be filed, (i) the parties thereto, (ii) the rival marks in question; (iii) the general inquiry by the Court; (iv) the majority of issues (if not almost all) [e.g. honesty of adoption, likelihood of deception/confusion; identify of the marks, etc.]; (v) the evidence/evidentiary inquiry, etc. will also be the same. In this background, it is therefore submitted on behalf of the Plaintiffs that the multiple actions be allowed to be clubbed and/or joined together in one action by granting leave under Clause XIV of the Letters Patent instead of compelling the Plaintiffs to institute three separate suits.

3. Dr. Veerendra Tulzapurkar, the Learned Senior Advocate appearing for the Defendants, has opposed the application seeking grant of leave under Clause XIV of the Letters Patent. He has taken the Court through Clause XIV of the Letters Patent which reads thus:

'And We do further ordain that where plaintiff has several causes of action against a defendant, such causes of action not being for land or other immovable property, and the said High Court shall have original jurisdiction in respect of one of such causes of action, it shall be lawful for the said High Court to call on the defendant to show cause why the several causes of action should not be joined together in one suit, and to make such order for trial of the same as to the said High Court shall seem fit.'

Dr. Tulzapurkar submitted that the provisions of Clause XIV of the Letters Patent require the Court in each case to consider the facts and exercise discretion before granting the leave. The provisions are not similar to the provisions of Section 10 of the Code of Civil Procedure,1908 under which the Court is bound to stay the subsequent suit if the issues in the subject suit are substantially the same as those in the earlier suits instituted in a Court having jurisdiction. If the conditions are satisfied, the grant of stay under Section 10 of the CPC is mandatory. Even if the earlier suit is instituted mala fide, the Court has no option but to grant stay of the subsequent suit, if the conditions in Section 10 CPC are satisfied. However, under Clause XIV of the Letters Patent, even if the conditions are satisfied, viz. if the High Court has jurisdiction to entertain the suit for one cause of action, it is not obliged to grant leave to the Plaintiff to combine other causes of action in respect of which the High Court has no jurisdiction. The Court is required to examine the facts of a particular case and thereafter exercise its discretion. Dr. Tulzapurkar further submitted on behalf of the Defendants that before exercising discretion in favour of the Plaintiffs, the Court is required to consider whether prima facie the Plaintiffs have some case in respect of the cause of action in respect of which the Court has jurisdiction so as to order joining of other causes of action. This position is borne out by the legislative provisions and judicial interpretation of the provisions of Clause XIV of the Letters Patent. The wordings of Clause XIV provide that the High Court after calling upon the Defendants to show cause against joinder of causes of action, make an order for the same. The order under Clause XIV is not passed ex parte unlike the order under Clause XII of the Letters Patent. The Defendant is called upon to show cause against the joinder of causes of action before granting leave under Clause XIV of the Letters Patent.

4. Dr. Tulzapurkar submitted that in considering the application for leave under Clause XIV, apart from the balance of convenience, respective hardships of the parties are required to be considered, keeping in view the object of Clause XIV i.e. avoidance of multiplicity of proceedings. When the Court is required to consider the application with the aforesaid object, it is incumbent on the Court to consider ex facie at least that the Plaintiff has some case in respect of the cause of action for which the Court has jurisdiction. It is submitted that the Court is not required to go into great detail to ascertain whether the Plaintiff will ultimately succeed in the suit or not, in respect of the cause of action for which the Court has jurisdiction, but if it can be shown that ex facie the Plaintiff cannot sustain the cause of action for which the Court has jurisdiction, then the exercise of discretion should be against the Plaintiff. In support of his contention that in passing of, the order granting leave under Clause XIV of the Letters Patent is discretionary and not a matter of routine and that the object is to avoid multiplicity of proceedings, Dr. Tulzapurkar has relied on the decisions in (i) Burroughs Wellcome vs. G.K. Sharma (1989 IPLR Page 60), (ii) Brooke Bond India Ltd. vs. Balajee Tea (I) P. Ltd. (1989 IPLR P. 266), (iii) M/s. Arte Indiana vs. M/s. Mittulaul Lalal (1999) 4 Bom CR 239 paragraphs 9 and 10), (iv) Asian Paints vs. Jaikrishna Paints (2002) 6 Bom CR page-1), (v) Marico Industries vs. Sarfaraj Trading (2002) 104 Bombay Law Reporter 254), and (vi) European Limited vs. Economist Newspaper Limited (1998 FSR page 283).

5. Dr. Tulzapurkar next submitted that if it can be shown by the Defendant that the registered Proprietor’s trademarks has conditions and/or limitations which do not give him exclusive right, or if the Defendant can successfully raise a defence under Section 36 of the Act, or if the Defendant is admittedly a registered proprietor (in which event, no suit for infringement can lie), or if the Defendant can show that his user is prior to the user of the Plaintiff or registration, then it can be said that ex facie the Plaintiff’s claim is outside and beyond the provisions of Section 28 of the Act. In all such cases merely because the Court has jurisdiction to entertain the suit for infringement, the discretion should be exercised against the Plaintiff by refusing to grant leave under Clause XIV of the Letters Patent to combine the cause of action for passing off for which the Court has no jurisdiction, with the cause of action for infringement.

6. Dr. Tulzapurkar has submitted that in the instant case the registration granted to the Plaintiffs (on which the suit for infringement and/or the invocation of the jurisdiction of this Court is based) is itself subject to a limitation that no monopoly is conferred upon the use of the word 'Madras'. He submitted that the effect of this limitation on the Plaintiffs registration, coupled with the undisputed fact that the word 'Caf' is used in relation to restaurant services, and is a descriptive word, would be to allow the Plaintiffs to indulge in an abuse of process of law, by filing a suit for infringement in this Court and to seek leave to combine the cause of action for passing off, on specious plea of avoiding multiplicity of proceedings. In this connection, Dr. Tulzapurkar has relied on the decision of the Court of Appeal in Pirie and Sons vs. Goodall & Sons7. Dr. Tulzapurkar has further submitted that the Plaintiffs trade mark consists of words 'Cafe Madras'. The Plaintiffs have themselves agreed not to claim any exclusive rights in respect of the word 'Madras'. The other word 'Caf' is purely descriptive of the services. Hence, both the words, which are the only words in the registered trade mark are such that the combination thereof in the form of the mark 'Caf Madras' does not give the Plaintiffs any exclusive right to use the same. It is submitted that out of the parts of a registered trade mark at least one should be distinctive so as to confer exclusive right to use the trade mark on the proprietor of the registered trademark within the meaning and provisions of the Act.

7. Dr. Tulzapurkar submitted that the Defendants are not using the plea of invalidity of the Plaintiffs registration at this stage but are raising a plea that in the facts of the case, discretion under Clause XIV should be exercised against the Plaintiffs inasmuch as the Plaintiffs are claiming rights which do not exist in law and in such a case, the suit for infringement itself is an abuse of process of law and it is inequitable to order joining of causes of action for passing off in the present case. In this connection reliance is placed on Section 28 (2) and Section 17 of the Act. It is therefore submitted that keeping in mind avoidance of multiplicity of proceedings, this is a fit case where leave should be refused.

8. Mr. Venkatesh Dhond, the Learned Senior Advocate appearing for the Plaintiffs, has submitted that the issue canvassed on behalf of the Defendants is not new. It has in the past been unsuccessfully canvassed before this Court in at least 5 cases (three before learned Single Judges and two before Division Benches) i.e. in the cases of (i) M/s. Arte Indiana Mumbai v. P. Muttulaul Lalah and sons, Madras (AIR 1999 Bom. 369), (ii) Marico Industries Ltd. v. Sarfaraj Trading Company (20020) 25 PTC 93 (Bom) (DB), (iii) Dow Agro (unreported Leave Petition No. 184 of 2006), (iv) Parle Agro Pvt. Ltd. vs. Balan Natural Food (P) Ltd. ( Order dated 4th May 2006 in Leave Petition No. 229 of 2006 in Suit No. 1220 of 2006 (unreported) and (vi) Burroughs Welcome (India) Ltd. vs. G.K. Sharma (supra). Mr. Dhond submitted that the clear legal proposition which emerges from these cases is (i) the paramount and/or overriding consideration/yardstick in considering applications for grant of leave is avoiding multiplicity of litigation. Multiplicity of litigation is to be avoided where possible. The legislative policy and object behind Clause XIV is precisely this. (ii) Considerations/inquiries touching the merits/strength of the case of parties are not relevant. In an application under Clause XIV, in fact the Courts should at the stage of granting leave refrain from making any such inquiry and/or commenting thereon, since this will potentially affect a decision on interim relief. Mr. Dhond submitted that it should be borne in mind that traditionally and until very recently and possibly in future-leave applications were considered by the Chamber Judge while interim relief applications were considered by the Judge hearing Motions.

9. Mr. Dhond has further submitted that the arguments advanced on behalf of the Defendants firstly that the grant of leave is a discretionary exercise and that granting leave in the present case will be dragging the Defendants from a forum which does not otherwise have jurisdiction and would seriously inconvenience the Defendants is completely fallacious and wholly irrelevant. Equally irrelevant is the second submission advanced on behalf of the Defendants that this Court should consider the fact that the registration granted to the Plaintiffs is itself subject to a limitation that no monopoly will be conferred upon the use of the word 'Madras' and the word 'Caf' is a word over which no monopoly can ever be claimed by anybody in the restaurant business. It is submitted that it is a well settled proposition of law that the Court does not consider matters/issues which touch upon the merits of the controversy between the parties in the suit. All the submissions of the Defendants pertain to the merits of the case of the Plaintiffs before this Court. These are relevant to an enquiry as to whether the Plaintiff has and/or has made out a case for infringement. These have no relevance to the question of grant of leave. The same would have the effect of disentitling the Plaintiffs to the grant of interim/final reliefs which cannot be allowed. Mr. Dhond has submitted that the decision of the Madras High Court in the case of Brook Bond India vs. Balaji Tea (supra) is of no assistance to the Defendant. The said judgment has to be understood in the context of the facts and circumstances of that case. Mr. Dhond without prejudice to his contention that the arguments based on the limitations placed on registration are arguments which deal with the merits of the case and are required to be excluded from consideration at the stage of deciding applications for leave under Clause XIV of the Letters Patent, submitted that even on merits, the Defendants’ submissions are misconceived. While placing limitations, at the time of granting registration, the Registrar after due exercise of discretion and/or after due consideration of the material on record, only places a limitation on the word 'Madras'. This only means the Plaintiffs cannot claim monopoly over the word 'Madras'. The Plaintiffs are not even claiming any such monopoly. Notwithstanding the limitation on the word 'Madras', the Registrar granted registration of the composite mark 'Caf Madras'. The Plaintiffs are therefore entitled to exclusive use of the words 'Caf Madras'. Mr. Dhond has therefore submitted that the Plaintiffs are entitled to leave under Clause XIV of the Letters Patent and the same be granted.

10. I have considered the submissions advanced by Mr. Dhond and Dr. Tulzapurkar, learned Counsel appearing for the Plaintiffs and the Defendants respectively.

11. The Courts have repeatedly affirmed in its various decisions including the decisions relied upon herein that the paramount and/or overriding consideration/yardstick in considering application for grant of leave is 'avoiding multiplicity of litigations' and the legislative policy and object behind clause XIV is precisely this. The serious consequence and/or prejudice flowing from multiplicity of litigation are well known and need not be re-discussed. The Hon'ble Division Bench of this Court (Coram: A.P. Shah and V.K. Tahilramani, JJ.) in Marico Industries vs. Sarfaraj Trading (supra) after considering the facts of the case and the decisions of this Court in Burroughs Welcome (India) Ltd. (supra) and the Division Bench decision in Gold Seal Engineering Products Pvt. Ltd. (supra) set aside the order of the Learned Single Judge declining leave under Clause XIV of the Letters Patent on the ground that, in their opinion grant of leave would definitely avoid multiplicity of proceedings and serve the ends of justice. In the said decision the Division Bench also noted that in the decision of the Division Bench of this Court in Gold Seal Engineering (supra) it is held 'that once it is found that the Plaintiffs are entitled to maintain the suit in this Court in respect of grievance of breach of copyright, there was no reason to refuse the leave so as to drive the parties to file litigation in several Courts'. Paragraphs 10, 11 and 12 of the decision in Marico are relevant and therefore reproduced hereunder:

'10. Next, the question is whether on facts, the appellants are entitled to grant of leave as sought or not. The learned Counsel Mr. Shah referred to the decision in Burroughs Wellcome (India) Ltd. v. G. K. Sharma and King Scientific Research Centre, 1990 IPLR 60 where it has been held that as the Bombay High Court has jurisdiction to entertain the suit in respect of cause of action relating to infringement of copyright, cause of action in respect of infringement of trade mark and passing off should be permitted to be joined in the suit and under these circumstances, leave under Clause 14 of the Letters Patent was granted.

11. In the next decision relied upon by Mr. Shah in Gold Seal Engineering Products Pvt. Ltd. and Ors. v. Hindustan Manufacturers (supra) while reversing the decision of single Judge of this Court and proceedings on the assumption that this Court has no jurisdiction to entertain the suit in respect of infringement of trademark and passing off, the division bench held that once it is found that the plaintiffs are entitled to maintain the suit in this Court in respect of grievance of breach of copyright, there was no reason to refuse the leave so as to drive the parties to file litigation in several Courts. It was held that it is necessary to grant leave with a view to avoid multiplicity of litigations. The bench noticed that it is desirable that a practical view is taken and parties are not driven from Court to Court on technicalities. It was held that Clause 14 of the Letters Patent was enacted to subserve the purpose of avoidance of multiplicity of proceedings and the trial Court was entirely in error in refusing to grant leave on assumption that the conduct of the appellant was not bona fide. Leave was accordingly granted. The decision in Gold Seal Engineering Products Pvt. Ltd.'s case (supra) was followed by the division bench in the case of M/s Arte Indiana (supra).

12. In the light of the decided cases, we will examine whether the order passed by the learned Single Judge refusing to grant leave under Clause 14 is correct. It is apparent from the order of the learned Single Judge that the leave was refused solely on the ground that the respondents are carrying on business at Hyderabad/Secunderabad and grant of leave would cause hardship to them. In our opinion the learned Single Judge was in error in refusing leave under Clause 14. The Court should endeavour to avoid multiplicity of litigation and the parties should not be driven from Court to Court on technicalities. In the present case the parties involved are businessmen and we are not satisfied that no undue hardship is likely to be caused to the respondents if the appellants are allowed to combine the action of trademark and passing off along with the action of infringement of copyright. In our opinion grant of leave would definitely avoid multiplicity of proceedings and serve the ends of justice'.

12. It is not the case even of the Plaintiffs that once leave is sought under Clause XIV of the Letters Patent the Court is bound to grant the same without considering any aspect of the case. The Division Bench of this Court (Y.K. Sabharwal, C.J. and S.H. Kapadia, J. ) in the case of M/s. Arte Indiana (supra) held that, ' As already observed, one of the objects for enacting Clause (14) was to avoid multiplicity of proceedings, though it may be a different matter if, on the facts and circumstances of a particular case, the Court may decline leave considering undue hardship to the respondent or other such similar ground'. In the case of Brook Bond India vs. Balaji Tea (India) Pvt. Ltd. (supra), the Plaintiff therein who was a large Corporation having branches across the country despite having an office and/or was carrying on business at the place where the Defendants were carrying on business and could therefore have conveniently sued at the said location, consciously chose not to do so but had chosen to file a suit in Madras, where it had a branch office. The Plaintiff therein did not appear to be serious about its case on infringement of copyright. The pleading on copyright infringement was almost entirely lacking (Paragraph 9 of the Judgment). The submission before the Court was that the filing of the suit, as framed, was an abuse of process of the Court and made with a view to preventing the Defendant from effectively defending the action. It is in this context that the Madras High Court declined to grant leave under Clause XIV, since it felt that the object behind the entire exercise was an abuse of the process of the Court.

13. Therefore, a bare argument that grant of leave will drag the Defendants from a forum where the Defendants are situated to the Court from which clause XIV is sought and that this is prejudicial/inconvenient to the Defendants is fallacious and misconceived. Upon leave being granted, all that the Defendants are required to do is to defend before the very Court and the very proceedings in which the Defendant already finds itself arrayed, the allied issue of passing off. This poses no genuine or real inconvenience.

14. However none of the decisions cited, suggests that even if the suit as filed is on the face of it not maintainable and that the suit framed is nothing but an abuse of law/Court, the Court should only upon considering the issue of hardship/inconvenience proceed to grant leave under clause XIV of the Letters Patent. Such an interpretation if applied to the said provision would invite absurd consequences. For example, if a Plaintiff files a suit alleging infringement of a trade mark without the mark being registered and then applies for leave under Clause XIV of the Letters Patent, the Court is surely entitled to enquire into the matter and not grant the leave sought for. Grant of leave in such a situation would be nothing but a total abuse of the process of the Court. Therefore, there can be no hard and fast rule prescribed by any Court in any of its decisions as to under what circumstances the Court should grant leave or decline leave. The Court has to use its judicial discretion and arrest any abuse of the process of the Court, however, keeping uppermost in mind that multiplicity of litigation is to be avoided wherever possible.

15. As stated hereinabove, the Division Bench of this Court has in the case of Gold Seal Engineering Products Pvt. Ltd. (supra) held, 'that once it is found that the Plaintiffs are entitled to maintain the suit in this Court in respect of grievance of breach of copyright, there was no reason to refuse the leave....'. Again in the case of M/s. Arte Indiana (supra) the Division Bench of this Court though it held that, 'the Court may decline leave considering undue hardship to the respondent or other such similar grounds' the Division Bench has after setting out the submissions qua the facts of that case and observing that the same are not quite relevant for the purpose of considering the Leave Application under Clause (14), have clearly stated that, 'We would not like to commit in detail on the facts pointed out by the defendant lest our observations may adversely effect the parties while considering the prayers for grant of interim relief or while deciding the suit'. The Division Bench has therefore in no uncertain terms indicated that the Court should not hold a detailed inquiry on facts, so as to ensure that the observations made pursuant to such inquiry in no way adversely affects the parties while considering the prayers for grant of interim relief or while deciding the suit.

16. From a reading of Clause XIV of the Letters Patent, the observations/findings in the aforestated decisions of the Hon'ble Division Bench of this Court, and from the above discussion it can safely be concluded that:

(i) the grant of leave under Clause XIV of the Letters Patent is a discretionary exercise;

(ii) the primary consideration, while deciding applications for grant of leave under clause XIV of the Letters Patent is 'avoiding multiplicity of litigation';

(iii) in the absence of proven mala fides/hardship, the argument that grant of leave will drag the Defendant from a forum where the Defendant is situated, to the Court from which Clause XIV is sought and that this is prejudicial/inconvenient to the Defendant, is fallacious and misconceived;

(iv) leave may be declined considering undue hardship to the Defendant or such other similar ground/s;

(v) leave may be declined if the suit as filed is on the face of it not maintainable and the same is nothing but an abuse of law/Court;

(vi) the inquiry whether on facts the Plaintiff is entitled to grant of leave as sought for or not has to be minimal and not in detail, so as to ensure that observations made do not adversely affect the parties while considering the prayers for grant of interim relief or while deciding the suit;

(vii) it is not possible to list all the circumstances under which leave under Clause XIV should be grante

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d or declined. The Court has to use its judicial discretion and arrest any abuse of the process of a court without going into the merits of the case to the extent of virtually obliterating the distinction between grant of leave and grant of interim relief. (viii) leave petitions cannot be converted into interlocutory hearings based on the initial cause of action. This will be an anathema to the object/legislative policy behind granting leave. 17. In the instant case, the Plaintiffs are the registered Proprietor of two trade marks. The Registration Certificates are at pages 30 – 31 of the Plaint. The Legal proceedings certificates are at pages 93-96. The factum of registration is admitted. The validity thereof in these proceedings is not contested. Whilst placing limitations, at the time of granting registration, the Registrar after due exercise of discretion and/or after due consideration of the material on record, only placed a limitation on the word 'Madras'. Notwithstanding the limitation on the word 'Madras', the Registrar granted registration of the composite mark 'Caf Madras' entitling the Plaintiffs to the exclusive use of the words 'Caf Madras'. The Defendants are admittedly using the mark 'Cafe Madras'. The Defendants have themselves made an application for registration of the very mark, after being served with a cease and desist notice. Under the circumstances, the suit filed by the Plaintiffs alleging infringement cannot be said to be lacking in bona fides and nor is it an abuse of the process of the Court. Going into the details upon the limitations placed upon the registration at this stage as suggested by the Defendants would amount to conducting an inquiry as to whether the Plaintiffs have made out a case for infringement. This would certainly affect the application for interim/final reliefs. Having come to the conclusion that the suit filed by the Plaintiff cannot be said to be lacking in bona fides and is not an abuse of the process of the Court, the question of dragging the Defendants to this Court upon leave being granted or inconveniencing them also does not arise. In fact, the Defendants will have to defend their action only before this Court instead of defending the same before the Courts at Bombay, Jalgaon and Nashik which would result in multiplicity of proceedings followed by possibility of conflicting decisions. 18. In the circumstances, leave is granted to the Plaintiffs under Clause XIV of the Letters Patent as sought. However, it is clarified that all the contentions raised by the parties are kept open and the ad-interim/interim and final reliefs shall be granted by the Court without being influenced by any of the observations made in this Judgment. The Leave Petition is accordingly disposed of.
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