1996 (11) TMI 446 - SC - Companies Law

Whether the suit filed by the appellant against the respondents in the Court of Chief Judge City Civil Court Hyderabad was barred by the provisions of Order 2 Rule 2 Sub-rule (3) of the Code of Civil Procedure 1908? Held that - Infringement of a registered trade mark would also be a continuing wrong so long as infringement continues. Therefore whether the earlier infringement has continuer or a new infringement has taken place cause of action for filing a fresh suit would obviously arise in favour of the plaintiff who is aggrieved by such fresh infringements of trade mark or fresh passing off actions alleged against the defendant. Consequently in our view even on merits the learned Trial Judge as well as the learned Single Judge were obviously in error in taking the view that the second suit of the plaintiff in the present case was barred by Order 2 Rule 2 sub-rule (3) CPC. As the learned Single Judge of the High Court has held on merits in favour of the plaintiff and has taken the view that the action of the defendants is actionable and amounts to acts of passing off as the waterproof raincoats manufactured by the first defendant bearing the trade mark BACK BACK are phonetically and visually similar to those of the plaintiff hearing the trade mark DUCK BACK it must be held that the plaintiff had made put a case for actionable breach of infringement of plaintiff s trade mark as well as actionable act of passing off by the defendants of their goods as if they were plaintiff s goods and therefore the plaintiff s suit would be required to be decreed. In the result the appeal succeeds and is allowed. The judgment and order of dismissal of the plaintiff s suit as passed by the Trial Court and as confirmed by the High Court are set aside. Plaintiff s Original Suit No.123 of 1982 in the Court of Chief Judge City Civil Court Hyderabad is ordered to be decreed as prayed for. Appeal is accordingly allowed .

Summary

Issues Involved:
1. Whether the suit filed by the appellant was barred by Order 2 Rule 2 Sub-rule (3) of the Code of Civil Procedure, 1908 (CPC).
2. Whether the suit was barred by res judicata.
3. Whether the defendants were infringing the plaintiff's registered trademark and passing off their goods as those of the plaintiff.

Issue-wise Detailed Analysis:

1. Bar by Order 2 Rule 2 Sub-rule (3), CPC:
The core issue was whether the second suit filed by the plaintiff was barred by Order 2 Rule 2 Sub-rule (3), CPC. The rule mandates that a plaintiff must include the whole claim in respect of the cause of action in one suit. If a plaintiff omits to sue for a portion of the claim or for any relief available, they cannot subsequently sue for the omitted portion or relief unless they had obtained leave of the court. The defendants argued that the second suit was based on the same cause of action as the first suit and thus barred. However, the Supreme Court highlighted that the defendants failed to produce the pleadings of the earlier suit, which is a threshold requirement as per the Constitution Bench ruling in Gurbux Singh v. Bhooralal. Without the pleadings from the first suit, the defendants could not establish the identity of the cause of action. The Court also noted that the second suit was based on continuous and recurring infringement of the trademark and passing off actions, which provided a fresh cause of action. Therefore, the second suit was not barred by Order 2 Rule 2 Sub-rule (3), CPC.

2. Bar by Res Judicata:
The learned Single Judge of the High Court had already determined that the suit was not barred by res judicata. The Supreme Court did not find it necessary to delve further into this issue as it was not contested in the appeal.

3. Infringement of Trademark and Passing Off:
On the merits, the High Court had agreed with the plaintiff, finding that the waterproof raincoats manufactured by the defendants bearing the trademark 'DACK BACK' phonetically and visually resembled those of the plaintiff bearing the trademark 'DUCK BACK'. This resemblance led to confusion among consumers, amounting to passing off. The Supreme Court upheld this finding, noting that the plaintiff had established a case for actionable breach of infringement of the trademark and passing off. The continuous and recurring nature of the defendants' actions provided a fresh cause of action for the plaintiff, justifying the filing of the second suit.

Conclusion:
The Supreme Court concluded that the second suit was not barred by Order 2 Rule 2 Sub-rule (3), CPC, due to the failure of the defendants to produce the pleadings from the first suit and the continuous nature of the infringement and passing off actions. Consequently, the appeal was allowed, the judgments of the Trial Court and the High Court were set aside, and the plaintiff's suit was decreed as prayed for. The plaintiff was awarded costs throughout.