Dismissed

The Scotch Whisky Association and 2 Ors. v. Khoday India Ltd.

Bombay HC1 Apr 2014CHS/170/2013

Case brief

AI extract

What is this about?

Defendants in a long-pending passing-off suit sought dismissal under Order VII Rule 11 CPC, citing res judicata based on a Supreme Court judgment. The court dismissed the Chamber Summons as premature, noting the plea had already been addressed in prior appeals where it was rejected, and that the Supreme Court directed expedition of the suit instead of dismissal.

What did the court decide?

Chamber Summons for rejection of plaint and dismissal of suit on grounds of res judicata was dismissed as premature.

The Scotch Whisky Association and 2 Ors. Vs Khoday… — Intellectual Property | Bombay HC (2014)

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CHS 170 of 2013

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION

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CHAMBER SUMMONS NO. 170 OF 2013 IN SUIT NO.1729 OF 1987

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Khoday India Limited …Applicants/

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(Org. Defendants)

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IN THE MATTER BETWEEN :

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The Scotch Whisky Association & Ors.

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…Plaintiffs

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Versus

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Khoday India Limited …Defendants

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Dr. Virendra Tulzapurkar, Senior Advocate, a/w. Mr. Amit Jamsandekar i/b. Little & Co., for the Plaintiffs.

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Mr. Gaurav Joshi, Senior Advocate, i/b. Doijode Associates, for the Defendants.

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CORAM: S. J. KATHAWALLA, J.

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JUDGMENT RESERVED ON : 28TH FEBRUARY, 2014 JUDGMENT PRONOUNCED ON : 1ST APRIL,2014

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JUDGMENT:

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The above Suit is filed in the year 1987 and is pending in this Court since the last 27 years. The above Chamber Summons is taken out by the Defendants on 12th February, 2013, seeking an order rejecting the Plaint under the provisions of Order VII Rule 11 of the

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Code of Civil Procedure, 1908 (“CPC”) and/or for dismissal of the above Suit.

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The above Suit is an action for passing off and has been filed by the Plaintiffs against the Defendants inter alia seeking a declaration that by using in respect of whisky not distilled and matured in Scotland, the label and carton containing the word ‘SCOT’ and/or the crest of a lion rampant and/or the description “Distilled from the Finest Malt and Blended With the Choicest Whiskies by Scotch Experts under Government Supervision”, the Defendants are passing off their whisky as “Scotch Whisky”.

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According to the Defendants, the Plaint ought to be rejected and/or the above Suit ought to be dismissed on the ground of the Suit being barred under the principles of Res Judicata contained in Section 11 of the CPC and the Suit becoming infructuous in view of the issues which are raised in the above Suit being finally adjudicated and decided by the judgment of the Hon’ble Supreme Court dated 27th May, 2008 [in the case of Khoday Distilleries Ltd. (now known as Khoday India Ltd.) vs. Scotch Whisky Association] reported in (2008) 10 SCC 723 (hereinafter, “the said judgment”) in an appeal [SLP (C) No. 21367 of 2007] filed by the Defendants against the Plaintiffs from the order and judgment of the Division Bench of the Madras High Court in rectification proceedings initiated by the Plaintiffs before the Registrar of Trade Marks, Madras.

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The relevant facts in the matter are briefly set out

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hereunder :

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4.1. The Defendants commenced manufacture of whisky under the mark 'PETER SCOT' in May, 1968 and made an application for registration of the said mark on 3rd July, 1971, which was accepted by the Assistant Registrar, Trademarks, Madras, in March, 1974. The Plaintiffs came to know of the Defendants’ mark on 20th September, 1974. An application for rectification of the said trademark was filed by the Plaintiffs on 21st April, 1986 and the above Suit was instituted on 12th June, 1987, in which the Written Statement was filed by the Defendants on 4th August, 1993. The said rectification application filed by the Plaintiffs was allowed in May, 1989 by the Deputy Registrar of Trade Marks, Madras, which was challenged by the Defendants. However, the said order was confirmed by the Single Judge and subsequently, the Division Bench of the Madras High Court.

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4.2 Thereafter, an SLP (bearing Civil Appeal No. 4179 of 2008) was preferred by the Defendants against the order of the Division Bench of the Madras High Court before the Hon’ble Supreme Court. On 27th May, 2008, the Hon’ble Supreme Court by the said judgment allowed the Defendants’ appeal. In the said judgment, the two principal issues considered by the Hon'ble Supreme Court were (a) whether the delay on the part of the Plaintiffs in filing the application for rectification of the mark ‘PETER SCOT’ would amount to acquiescence and/or

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waiver?; and (b) whether the use of the term ‘SCOT’ would itself be a sufficient ground to form an opinion that the Defendants’ mark ‘PETER SCOT’ is deceptive or confusing so as to pass off the Defendants’ whisky as Scotch whisky?

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4.3 By an order of this Court (Coram: S.J. Vazifdar, J.) dated 15th June, 2006, the following issues were settled in the present Suit :

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“(a) Whether the plaint discloses any cause of action?

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(b) Whether the present suit is bad for mis-joinder of parties?

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(c) Whether the Plaintiffs prove that the Defendant has “passed off” their product as a whisky produced in Scotland as alleged in the plaint?

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(d) Whether the Defendant proves that this Hon’ble Court does not have any jurisdiction regarding the marketing in Japan and Abu Dhabi of the impugned product produced and labelled in India as alleged in paragraphs 2, 20, and 28 of the written statement ?

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(e) Whether the Plaintiffs have acquiesced in the Defendant’s use of the impugned trademark as alleged in paragraph 1 of the written statement?

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(f) Whether the Plaintiffs are estopped from making their present claim as alleged in paragraph 1 of the written statement?

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(g) Whether the Defendant has used its mark honestly and concurrently and is therefore entitled to continued use of the same as alleged in para 1 of the written statement?

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(h) To what reliefs, if any, are the Plaintiffs entitled?

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(i) Generally?”

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4.4 On 2nd December, 2008, the Defendants took out Chamber Summons No. 1783 of 2008 in the above Suit, seeking rejection of the Plaint under Order VII, Rule 11 of the CPC and dismissal of the Suit in view of the said judgment which according to the Defendants finally decided all the issues framed in the above Suit. The learned Single Judge after analysing the said judgment in detail reached a finding that there was nothing in the said judgment that leads to the conclusion that the case of passing off in the present Suit was in fact decided against the Plaintiffs and the finding of the Hon'ble Supreme Court of delay, acquiescence and waiver must be confined only to the application for rectification on the basis of the use of the word mark 'PETER SCOT' in so far as it includes the word 'SCOT'. The said Chamber Summons was therefore, dismissed by the learned Single Judge of this Court by an order dated 7th October, 2009.

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4.5 Thereafter, the Defendants preferred Appeal No. 150 of 2010 before the Hon'ble Division Bench of this Court challenging the aforesaid order of the learned Single Judge dated 7th October, 2009.

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The said Appeal was rejected by an order dated 12th September, 2011, on the ground that the Suit could not have been dismissed at that stage because, among other reasons, the issue of Res Judicata was not raised by the Defendants in their Written Statement. The Hon'ble Division Bench also held that, “in our opinion, the learned Single Judge has rightly rejected the Chamber Summons though for different reasons. The Appeal is therefore, rejected”. However, it was clarified by the Hon'ble Division Bench that the said order would not come in the way of the Defendants raising the plea of Res Judicata in their Written Statement.

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4.6 Subsequently, the Defendants preferred a SLP (bearing Civil Appeal No. 1106 of 2012) against the Appellate Order dated 12th September, 2011, before the Hon’ble Supreme Court. By an order dated 27th January, 2012, the said SLP was dismissed by the Hon’ble Supreme Court and the hearing of the above Suit was expedited.

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4.7 Thereafter, the Defendants took out Chamber Summons No. 424 of 2012 to amend the Written Statement and raise the plea of Res Judicata which was allowed by this Court by an order dated 16th July, 2012.

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4.8 The Plaintiffs too took out Chamber Summons No. 488 of 2012 to amend the Plaint and introduce the fact that “Scotch Whisky” had been registered on 27th January, 2011, as a Geographical

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Indication under the provisions of the Geographical Indications of Goods (Registration and Protection) Act, 1999 (the “G.I. Act”) and seeking reliefs for infringement of a registered Geographical Indication, which was opposed by the Defendants. However, the said Chamber Summons taken out by the Plaintiffs was allowed by this Court by its order dated 16th July, 2012, wherein the learned Judge has observed that the question whether the G.I. Act would be applicable to the facts of the present case or not will have to be decided after evidence is led by the parties and the parties are heard.

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4.9 The Defendants carried out the permitted amendment in their Written Statement on 10th September, 2012 and the additional issue of Res Judicata was framed by this Court by its order dated 15th January, 2013. The same is reproduced hereunder:

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“Whether the Suit is barred and/or has become infructuous in view of what is stated in paragraph 2.1 of the amended Written Statement?” .

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4.10 Pursuant thereto, the Defendants have once again taken out the above Chamber Summons (seeking rejection of the Plaint under Order VII, Rule 11 of the CPC and/or dismissal of the Suit), on the same issues/grounds which it had urged before the Hon'ble Supreme Court in the SLP which was dismissed vide order dated 27th January, 2012.

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The learned Senior Advocate appearing for the Defendants,

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in support of the Chamber Summons has made the following submissions:

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(i) that the order of the learned Single Judge dated 7th October, 2009 in Chamber Summons No.1783 of 2008 and the findings contained therein, cannot be relied upon by the Plaintiffs in view of the order of the Hon'ble Division Bench dated 12th September, 2011. Relying on the judgment of the Hon'ble Supreme Court in the case of Kunhayammed and Ors. V/s. State of Kerala and Ors.¹ , it was submitted that the order of the lower Court merges with the decision of the superior Court. It was submitted that in any event, liberty was specifically reserved to raise the point of res judicata by the Appellate Order and the findings of the learned Single Judge are thus not binding.

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(ii) that it is well settled law that the principles of res judicata/issue estoppel would also apply to passing off and trademark actions. In support of this contention, the Defendants have relied on the decisions in Indo-Pharma Pharmaceuticals Works Pvt. Ltd. V/s. Pharmaceuticals Company of India² and K.R.Chinnakrishna Shetty V/s. Ambalal and Co.³

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1 (2000) 6 SCC 359

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2 1978 (80) BOM LR 73

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3 AIR 1973 Mysore 74

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(iii) that the principles of res judicata/issue estoppel apply even though the subject matter of the two proceedings may be different, provided the issue is the same. In support of this contention, the Defendants have relied on the decisions in Pandit Ishwardas V/s. State of Madhya Pradesh and Ors.⁴ , Rama Maruti Chaugule V/s. Mallappa Krishna Chaugule⁵ and Chiranjilal Ramchandra Loyalka and Ors. V/s. Life Insurance Corporation of India⁶ .

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(iv) that the issue of res judicata, or the question whether the Suit has become infructous ought to be decided as a preliminary issue under the provisions of Order 14 Rules 1 and 2 and/or Section 151 of the CPC. In support of this contention, the Defendants have relied on the decisions in Abdul Rahman V/s. Prasony Bai⁷ and Shipping Corporation of India Ltd. V/s. Machado Brothers and Ors.⁸ . It is further submitted that therefore, the additional issue framed on 15th January, 2013, also be decided in the present Chamber Summons.

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(v) that the test of likelihood of confusion or deception arising from similarity of marks is the same, both in infringement and passing off actions, i.e. in an infringement action when the two marks are not identical and only alleged to be deceptively similar, the test to be

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4 (1979) 4 SCC 163

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5 1942 (44) Bom. L.R. 678

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6 AIR 1959 Bom 396

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7 (2003) 1 SCC 488

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8 (2004) 11 SCC 168

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applied is the passing off test, wherein the entire label and get-up is to be considered. In support of this contention, the Defendants have relied upon the decisions in Ramdev Food Products (P) Ltd. Vs. Arvindbhai Rambhai Patel and Others⁹ ; Ruston & Hornsby Ltd. Vs. The Zamindara Engineering Co.¹⁰ ; Goenka Institute of Education & Research Vs. Anjani Kumar Goenka and Another¹¹ ; Winthrop Products Inc. Vs. Eupharma Laboratories Ltd.¹² Pfizer Products Inc. Vs. BL & Company & Others¹³ ; and Lowenbrau AG & Another Vs. Jagpin Breweries Ltd. & Another¹⁴ . It is further submitted that in the said judgment, the Hon'ble Supreme Court has considered not only the word mark 'Peter Scot', but the entire label including Rampant Lion and the statements on the label, which is inter alia clear from paragraphs 13, 14(5), 15(ii), 15(vii) and 18 of the said judgment. Thus, issue No.3 framed by this Court regarding whether the Defendants are passing off their whisky as Scotch Whisky, stands finally decided and/or concluded by the said judgment.

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(vi) that the question of acquiescence and waiver arising under Issue Nos.5, 6 and 7 is also covered by the findings of the Hon'ble Supreme Court in paragraphs 22 to 58.

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9 (2006) 8 SCC 726

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1 0 1969 (2) SCC 727

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1 1 ILR (2009) VI Delhi 415

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1 2 1998 (18) PTC 213 (Bom)

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1 3 2002 (25) PTC 262 (Del)

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1 4 MIPR 2009 (1) 356

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(vii) that the issue regarding applicability of the Geographical Indications of Goods (Registration and Protection) Act, 1999, has been decided by the Hon'ble Supreme Court. The contention of the Plaintiffs that the issue has not been expressly considered by the Hon'ble Supreme Court is incorrect. The said issue has been expressly considered by the Hon'ble Supreme Court in paragraphs 14, 15, and 84 of its judgment.

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(viii) that the contention of the Plaintiffs that the Chamber Summons is not maintainable is incorrect. It is therefore, submitted that the Chamber Summons be allowed and the Suit be dismissed.

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The learned Senior Advocate appearing on behalf of the Plaintiffs has submitted that the present Chamber Summons is an abuse of the process of this Court as it has been filed to re-agitate the points which have been conclusively determined in the earlier Chamber Summons No.1783 of 2008 filed in the present Suit. It is submitted that on the strength of the authorities cited by the Defendants on the issue of res judicata, the Defendants ought not to be permitted to once again canvass the same point before this Court in the present Chamber Summons and on this ground alone, the present Chamber Summons deserves to be dismissed.

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It is further submitted on behalf of the Plaintiffs that the order of the Division Bench does not give any liberty to the Defendants

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to take out the present Chamber Summons and therefore, the Defendants are not entitled to take out the present Chamber Summons and re-agitate the issue raised in the earlier Chamber Summons No.1783 of 2008. It is submitted that there is no change in the circumstances which justifies the Defendants taking out the present Chamber Summons. It is also submitted that the Plaintiffs have taken out Chamber Summons No.488 of 2012 to amend the Plaint and introduce the fact that 'Scotch Whisky' had been registered as a Geographical Indication and seeking reliefs for infringement of a registered Geographical Indication. This Chamber Summons was opposed by the Defendants on the ground that the said issue has been put to rest by the judgment of the Hon'ble Supreme Court dated 27th May, 2008. The said contention was rejected by this Court vide its order dated 16th July, 2012, which allowed the Plaintiffs to amend the Plaint. The Defendants have not preferred any appeal against the said order and have accepted the same. It is submitted that on this ground also, the present Chamber Summons be dismissed. In their written submissions, the Plaintiffs have also dealt with some of the judgments relied upon by the Defendants.

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I have considered the submissions advanced on behalf of the Parties. I have also perused the present Chamber Summons as well as the earlier Chamber Summons No.1783 of 2008. I have also perused the judgment of the Hon'ble Supreme Court dated 27th May,

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2008; the order dated 7th October, 2009 of the learned Single Judge dismissing the Chamber Summons No.1783 of 2008, the order of the Hon'ble Division Bench of this Court dated 12th September, 2011 dismissing the Appeal preferred from the order of the learned Single Judge and the SLP preferred therefrom, which is dismissed by the Hon'ble Supreme Court of India vide its order dated 27th January, 2012, with a request to this Court to dispose of the Suit as expeditiously as possible, and in any event within three months from the date of communication of the said order.

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It is an admitted position that the Chamber Summons No.1783 of 2008 was filed under Order 7 Rule 11 praying that the Plaint be rejected and the Suit be dismissed on the ground that the issues in the present Suit stood concluded by the judgment of the Hon'ble Supreme Court dated 27th May, 2008, and it be held that the present Suit does not survive in view of that judgment. The Chamber Summons No.1783 of 2008 has been dismissed by the Trial Court. Admittedly, the Appeal preferred by the Defendant against the Trial Court's order rejecting the Chamber Summons No.1783 of 2008, was also dismissed by the Hon'ble Division Bench of this Court. The Defendant preferred a SLP challenging the order of the Hon'ble Division Bench in which the following questions of law were framed:

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“(i) Whether the issue raised in the suit viz.

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acquiescence on part of the Respondent herein

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and whether the mark used for deceptively similar,

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have already been adjudicated by this Hon'ble Court in its judgment dated 27-05-2008 in Khoday Distillaries Ltd. V/s. Scotch Whisky Association and Others, in Civil Appeal No.4179 of 2008 reported in (2008) 10 SCC 723 ?

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(ii) Whether Suit No.1729 of 1987 filed by the Respondents before the Hon'ble High Court of Bombay was barred by the principles of res judicata ?

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(iii) Whether the Plaint should be rejected on the ground that it is an abuse of the process as it seeks to re-agitate issues, which have already been finally determined by this Hon'ble Court?

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(iv) Whether the Hon'ble High Court ought to

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have dismissed the suit taking into account

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subsequent facts?

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(v)Whether the impugned order is contrary to the settled principle of law, viz., Courts should dispose off pending litigation if subsequent developments rendering it infructous are brought to the notice of

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the Court, as laid down by this Supreme Court in

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SCI V/s. Machado Bros, Reported in (2004) 11 SCC 168 and J.M. Biswas V/s. J.K.Bhattacharjee reported in (2002) 4 SCC 68 ?” .

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The SLP was dismissed by the Hon'ble Supreme Court vide its order dated 27th January, 2012, which is reproduced hereunder:

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“We have heard the learned counsel for the parties at some length. We are not inclined to interfere in the matter. However, in the peculiar facts and circumstances of this case, we deem it appropriate to request the High Court of Judicature at Bombay to decide the old suit of 1987, being Civil Suit No. 1729/1987, as expeditiously as possible, in any event, within three months from the date of communication of this order. With these observations this special leave petition is disposed of.”

¶132

It is therefore clear that the very same contentions which the Defendants are urging before this Court in the present Chamber Summons, were urged by them before the Hon'ble Supreme Court in the SLP preferred by them and these very same contentions did not find favour with the Hon'ble Supreme Court and the Hon'ble Supreme Court could not be persuaded by the Defendants to interfere and set aside the

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judgment of the Hon'ble Division Bench dated 12th September, 2011. Instead, the Hon'ble Supreme Court was of the view that the Suit itself should be disposed of as expeditiously as possible. Both the Parties thereafter took out proceedings for Amendment of their respective Pleadings and immediately upon the same being allowed, the Defendants carried out amendments to their Written Statement on 10th September, 2012 and got an additional issue framed on 15th January, 2013. However, instead of proceeding with the hearing of the Suit as directed by the Hon'ble Supreme Court, the Defendants have delayed the hearing of the Suit (pending before this Court since the last 27 years) by taking out the present Chamber Summons on 12th February, 2013, once again re-agitating the same grounds which it had agitated before the Hon'ble Supreme Court in the SLP. It is pertinent to note that when the Hon'ble Supreme Court expedited the hearing of the Suit, the Defendants have not submitted before the Hon'ble Supreme Court that the Defendants instead of proceeding with the hearing of the Suit, will after carrying out the amendments to their Written Statement as allowed by the Hon'ble Division Bench of this Court, shall once again re-agitate the same issues by way of a fresh Chamber Summons. In the aforesaid circumstances, I am of the view that the Defendants cannot be permitted to once again canvass the same points before this Court in the present Chamber Summons.

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It is true that the Hon'ble Division Bench in its order dated

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12th September, 2011, whilst dismissing the Appeal filed by the Defendants from the order of the learned Single Judge observed that the order will not come in the way of the Defendants raising the plea of res judicata in their Written Statement. However, the order of the Division Bench does not give any liberty to the Defendants to take out the present Chamber Summons and the Plaintiffs have correctly submitted that the argument of the Defendants to this effect is contrary to the apparent tenor of the order itself. An additional issue of res judicata has been framed by this Court which will be considered at the appropriate stage after the evidence is recorded and the Suit is being finally heard. The Plaintiffs are correct in their submission that the present Chamber Summons is therefore premature and the Court need not decide whether the Plaint should be rejected and/or the Suit be dismissed at this stage. I am also in agreement with the submission advanced on behalf of the Plaintiffs that there has been no change in the circumstances which justifies the Defendant taking out the present Chamber Summons.

¶142

As set out hereinabove, the Plaintiffs had taken out Chamber Summons No.488 of 2012 to amend the Plaint and introduce the fact that 'Scotch Whisky' had been registered as a Geographical Indication and seeking reliefs for infringement of a registered Geographical Indication. This Chamber Summons was opposed by the

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Defendant inter alia on the ground that the issue regarding the applicability of Geographical Indication of Goods (Registration and Protection) Act, 1999, had been put to rest by the judgment of the Hon'ble Supreme Court dated 27th May, 2008 and consequently, it was not permissible for the Plaintiffs to re-agitate this issue in the present Suit. This contention of the Defendants was expressly negatived by this Court in its order dated 16th July, 2012, which granted the Plaintiffs' application and permitted the Plaint to be amended. It is observed by the learned Judge in the order dated 16th July, 2012 that the question whether the G.I. Act, would be applicable to the facts of the present case or not will have to be decided after evidence is led by the parties and the parties are heard. The Defendants have not preferred any appeal against this order and have thus accepted it. Consequently, even on this ground, it is now not open for the Defendants to file the present Chamber Summons and seek relief in that behalf.

¶147

As regards the decision in the case of Ruston & Hornsby Ltd. Vs. The Zamindara Engineering Co. (supra) and Cadila's case reported in 2001 (5) SCC 73 relied upon by the Defendants, it is submitted on behalf of the Plaintiffs that they do not dispute the principles of law laid down therein. However, they have correctly submitted that the extent of applicability of those principles to the facts of this case will have to be gone into only at the time when the Suit is being finally heard after the evidence is recorded.

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As regards the judgment on the doctrine of merger, in the case of Kunhayammed and Ors. V/s. State of Kerala and Ors. (supra), the Plaintiffs have correctly submitted that the conclusion of that judgment which was made in the context of a decree cannot be applied in the manner sought to be done in the present case, as in the present context there is no decree but only two judgments, one of the Learned Single Judge dismissing the earlier Chamber Summons and the other judgment of the Hon'ble Division Bench dismissing the Appeal preferred by the Defendant against that order of dismissal. I am in agreement with the submission of the Plaintiffs that in the context of a judgment, the conclusions of the Hon'ble Supreme Court would not apply and a judgment until it is set aside continues to be binding. The mere fact that the Hon'ble Division Bench has come to the same conclusion by different reasons cannot and does not ipso facto overrule the judgment of the learned Single Judge.

¶152

The contention of the Defendants that the principles of res judicata/issue estoppel apply even though the subject matter of the two proceedings may be different provided the issue is the same, is also not disputed by the Plaintiffs. However, as submitted by the Plaintiffs, the issue in the present Suit is the subject matter of the rectification application, which ultimately was concluded by the Hon'ble Supreme Court's judgment dated 27th May, 2008. The rectification proceedings involved the registered trade mark 'Peter Scot' only and not the label

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mark which is the subject matter of the present Suit. This is clearly noted in the judgment of the Trial Court which rejected the earlier Chamber Summons of the Defendant.

¶157

With regard to the Defendants' contention that the question posed for the Court's consideration by the present Chamber Summons should be decided as a preliminary issue, and their reliance on the judgments in Abdul Rahman V/s. Prasony Bai (supra) and Shipping Corporation of India Ltd. V/s. Machado Brothers and Ors. (supra), for the said purpose, the Plaintiffs are correct in submitting that the observations and conclusions in these two judgments were made by the Hon'ble Supreme Court on the basis of the facts in those two matters. In the present case, especially in view of the order dated 16th July, 2012, it is now not open for the Defendants to contend that the question raised by the present Chamber Summons should be decided as a preliminary issue.

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In the circumstances, the above Chamber Summons is dismissed.

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(S. J. KATHAWALLA, J.)

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The Scotch Whisky Association and 2 Ors. v. Khoday India Ltd.

Case brief

What is this about?

What did the court decide?

The Scotch Whisky Association and 2 Ors. v. Khoday India Ltd.

Case brief

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What the court decided

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