M/S Kaveri Plasto Containers Pvt. Ltd. Vs M/S Kaveri Polymers

M/S. KAVERI PLASTO CONTAINERS PVT. LTD., A COMPANY REGISTERED UNDER THE COMPANIES ACT, 1956, HAVING ITS REGISTERED OFFICE AT NO.151/1, 2^ND FLOOR, R.V.ROAD, V.V.PURAM, NEAR MINERVA CIRCLE, BANGALORE - 560 004. REPRESENTED BY ITS DIRECTOR MR. SUSHIL SONEGARA.

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...APPELLANT

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(BY SRI. HARIKRISHNA PRAMOD, ADVOCATE)

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AND

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M/S KAVERI POLYMERS, HAVING ITS REGISTERED OFFICE AT PLOT NO.248, HASSAN GROWTH CENTRE, H.N.PURA ROAD, NEAR KIADB CIRCLE, HASSAN, KARNATAKA - 573 201. REPRESENTED BY ITS SOLE PROPRIETOR MR. MADHAVRAJ MALI.

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…RESPONDENT

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(RESPONDENT IS SERVED AND UNREPRESENTED)

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COMAP No.401 of 2024

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THIS COMAP IS FILED UNDER SECTION 13(1A) OF THE COMMERCIAL COURTS ACT, 2015 READ WITH SECTION 96 AND ORDER XLI, CPC, 1908 PRAYING TO SET ASIDE THE IMPUGNED ORDER DATED 04.09.2024 PASSED IN COM.O.S NO. 631/2024 BY THE LD. LXXXVI ADDL. CITY CIVIL AND SESSIONS JUDGE, (COMMERCIAL COURT), BENGALURU (CCH-87) AND RESTORE THE SUIT AND INTERLOCUTORY APPLICATIONS (IA NO. 1 TO 3) FILED BY THE APPELLANT HEREIN, ETC.

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THIS APPEAL HAVING BEEN HEARD AND RESERVED FOR JUDGMENT ON 07.01.2025, COMING ON FOR PRONOUNCEMENT OF JUDGMENT THIS DAY, V KAMESWAR RAO J ., DELIVERED THE FOLLOWING:

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CORAM: THE HON'BLE MR JUSTICE V KAMESWAR RAO AND THE HON'BLE MR JUSTICE S RACHAIAH

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CAV JUDGMENT

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(PER: THE HON'BLE MR JUSTICE V KAMESWAR RAO)

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This appeal has been filed by the appellant under Section 13(1A) of the Commercial Courts Act, 2015 (‘the Act’ for short) read with Section 96 and Order XLI, CPC challenging the order dated 04.09.2024 passed by the LXXXVI Addl. City Civil and Sessions Judge (Commercial Court), Bengaluru (CCH-87) (‘Trial Court’ for short) on IA No.1 in Com.O.S.No.631/2024 which has been filed by the appellant seeking permission to institute the suit without undergoing pre-institution mediation procedure and resultingly, rejecting two applications being IAs No.2

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and 3 filed by the appellant under Order XXXIX Rule 1 and 2 of CPC seeking ad-interim temporary injunction and Section 75 read with Order XXVI Rule 1 of CPC for appointment of Court Commissioner, were rejected.

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The case of the appellant before the Trial Court

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was on the basis of stand taken by it that it is a registered proprietor of a trademark and as such, the respondent, their promoters, assignee, successors-in-interest, licencees, etc., be refrained from utilizing the word ‘Kaveri’ or ‘Krishna Kaveri’ or any deceptive or phonetically similar variations thereof or other word or monogram/logo identical or deceptively similar thereto to the registered trademark of the appellant being ‘Kaveri’. According to the appellant, the respondent herein using the trademark ‘Krishna Kaveri’ for its water storage tanks which is deceptively similar to the trademark of the appellant, infringing its rights.

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The case of the respondent before the Trial Court

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in the written statement was, the respondent is a registered proprietor of trademark ‘Krishna Kaveri’ under

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class 20 for plastic water tanks under registration certificate dated 03.02.2018. The appellant had applied for rectification of the trademark of the respondent on 10.01.2019 and in spite of that, the appellant suppressed the material fact that the respondent is the registered proprietor of the trademark ‘Krishna Kaveri’. The Trial Court framed the following points for its consideration:

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“1 Whether the plaintiff has made out sufficient grounds to institute the suit without undergoing pre-institution mediation proceedings?

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If answer is in the affirmative then,-

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2 Whether the plaintiff has made out a prima facie case?

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3 Whether the balance of convenience lies in his favour?

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4 Whether the irreparable loss or legal injury would be caused to the plaintiff if his prayer sought for in I.A. No.2 is rejected?

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5 Whether the plaintiff has made out valid grounds to appoint a court commissioner to conduct local investigation as sought for in I.A.No.3?”

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As stated above, the Trial Court rejected the

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application of the appellant seeking permission to institute

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the suit without undergoing pre-institution mediation.

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The reasoning given by the Trial Court on point No.1 is the following:

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“Point No.1:

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13. As per section 12A of the Commercial Courts Act, a suit which does not contemplate any urgent interim relief under the said Act shall not be instituted unless the plaintiff exhausts the remedy of pre-instituion mediation.

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14. Sri. Sushil Sonegara, the Director of the plaintiff-company in his affidavit filed in support of I.A. No.1 inter alia stated that, the plaintiff has filed interim application seeking ad-interim exparte order of temporary injunction under Order 39 Rule 1 & 2 of CPC and therefore, he has been advised to institute the suit without going the ordial procedure of pre institution mediation proceedings and therefore, his application may be allowed.

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15. Learned counsel for the defendant submitted that Section 12A of the Commercial Courts Act is a mandatory provision, a person who wish to file a commercial suit shall undergo the pre institution mediation proceedings and there was no urgency to the plaintiff to file the present suit and therefore, the application may be rejected. Advocate for the defendant has relied upon the following two decisions;

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(i) Yamini Manohar Vs. T.K.D. Keerthi reported in (2024)5 SCC 815.

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(ii) V. Prabhakar Vs. M/s. Saga Films and others in C.S.(Comm. Div.) No.228 of 2022 & O.A.No. 737 of 2022 & A.No.5180 of 2022 in C.S. (Comm. Div.) No.228 of 2022

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16. In the case of Yamini Manohar (supra), the defendant Yamini Manohar had filed the application under Order VII Rule 11 of CPC to reject the plaint on the allegation that the plaintiff has not undergone the mandatory procedure of pre institution mediation. Her application was rejected and the Hon'ble Supreme Court held that her application is rightly dismissed. The Hon'ble Supreme Court emphasized that the use of the words 'contemplate any urgent interim relief as used in Section 12(1) of the Commercial Courts Act, 2015 are used to qualify the category of a suit. This is determined solely on the frame of the plaint and the relief sought. The plaintiff is a sole determinant of the pleadings in the suit and the relief sought for. The Hon'ble Supreme Court held that the question whether the suit involves any urgent interim relief is to be determined solely on the basis of the pleadings and the reliefs sought by the plaintiff. If a plaintiff seeks any urgent interim relief, the suit cannot be dismissed on the ground that the plaintiff has not exhausted the pre institution remedy of mediation as contemplated under Section 12A(1) of the Commercial Courts Act, 2015.

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17. In the case of V. Prabhakar (supra), the Hon'ble Madras High Court made certain parameters/tests to discover that whether the plaintiff has made out grounds for urgent interim reliefs as follows;

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(a) whether the prayer for interim relief is a product of profound thinking carefully about the possibility of the happening;

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(b) whether the matter demands prompt action and that promptitude is of such nature that exhausting the remedy of pre institution mediation without any intervention in the mean time can lead to a irreversible situation, i.e., a situation where one cannot put the clock back;

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(c) where the urgency is of plaintiff's own doing, if that be so the plaintiff cannot take advantage of its own doing;

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(d) high standard is required to establish the requirement of this prompt action (urgency);

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(e) Plaintiff should be on fair ground in urging urgency and an interim measure;

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(f) actual or apprehended wrong or injury should be so imminent that the plaintiff should be able to satisfy the court the court that plaintiff should not be made to stand and suffer the same,'

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18. Bearing in mind, the scope of Section 12A of the Commercial Courts Act interpreted by the Hon'ble Constitutional courts in the aforesaid decisions let the court appreciate the facts and circumstances of the present case. The plaintiff in

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plaint para-48 pleaded that the cause of action is continuing one and first arose in the month of April 2024 when the plaintiff first became aware of the defendants infringing mark. The plaintiff filed the present suit on 24.04.2024. The defendant denied the version of the plaintiff and stated that on 10.01.2019, the plaintiff filed an application seeking rectification of the trademark of the defendant. He has placed before the court e-register maintained by the competent authority in compilation page-38 which indicates that Kaveri Plastic Container Pvt. Ltd., Plot No.9G, Bidadi Industrial Area, Section 9, Phase-II, Bidadi-562109 filed an application on 10.01.2019 seeking rectification of the trademark of the defendant. The plaintiff in the plaint furnished its registered address as No.151/1, 2nd Floor, R.V. Road, V.V.Puram, Bengaluru-560 004. The plaintiff in support of his case furnished several documents and one such document found at page-88 of the suit, wherein it is clearly mentioned that the plaintiff is carrying on its business at Plot No.9G, KIADB Industrial Area, Bidadi. Thus, it is clear that the plaintiff has filed an application for rectification of the trademark of the defendant. In fact, the plaintiff has not denied that it has applied for rectification of the trademark of the defendant. In fact, the plaintiff suppressed the material fact of filing of application way back in the year 2019 for rectification of trademark of the defendant. In view of this undisputed attendant circumstance, it is clear that

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the plaintiff has made out no urgency to file the present case in the year 2024. The cause of action one pleaded by the plaintiff that in the month of February, 2024 for the first time, he came to know about the defendant's trademark infringing the rights of the plaintiff is appears to be far from the truth. Filing of application under Order 39 Rule 1 & 2 of CPC cannot give rise a presumption that the plaintiff has really made out a valid ground for presenting the case before complying the Section 12A of the Commercial Courts Act. Therefore, the application under Section 12A of the Commercial Courts Act is liable to be rejected. In view of the answer to the point No.1 in the Negative, the consideration of other two applications/points for consideration does not survive.”

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Submissions:

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The submission of learned counsel for the appellant is, IA No.1 and consequently the suit came to be disposed of on the ground that rectification proceedings were instituted by the appellant on 10.01.2019 with respect to respondent’s wordmark ‘Krishna Kaveri’. But, the said rectification application was made with respect to wordmark of the respondent ‘Krishna Kaveri’ due to incorporation of the word ‘Kaveri’ in it, being the

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registered mark of the appellant. According to him, the incorporation of the words ‘Krishna Kaveri’ in a format that includes word ‘Krishna’ written in italics above a flute and the word ‘Kaveri’ written in capitals in bold with curved lines at the top and bottom portions of the words ‘Krishna Kaveri’ with a purpose only to highlight the word ‘Kaveri’ which is the registered mark of the appellant, with a view to cause confusion to the average consumer with imperfect recollection. Thus, the word ‘Kaveri’ being the only word that is boldly visible on the water tanks of the respondent, is deceptively similar to the logo and registered mark of the appellant and as such, the suit was righlty filed with an interim relief and an application seeking exemption from undertaking the procedure stipulated under Section 12A of the Act. According to the counsel, the conclusion of the Trial Court that the appellant had suppressed the material facts, may not be correct in as much as the same becomes relevant for the rectification proceedings and a suit pertains to two different issues and causes of action; while the rectification proceedings were initiated as a challenge to

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the wordmark itself, whereas the suit has been filed due to deceptive adoption of the said words in a way so as to mimic the logo of the appellant. So, the causes of action in both the proceedings are distinct. Insofar as the new logo of the respondent is concerned, the same came to the knowledge of the appellant in the month of January 2024 and the suit was filed on 22.04.2024. On IA No.1 which is seeking exemption from initiating pre-institution mediation process is concerned, the impugned order is against the very spirit and ethos of the Act and is wholly opposed to the intentions of the legislation in constituting Section 12A of the Act. The legislative intent for the said section to be incorporated is only to stipulate a mechanism for pre-institution mediation when there is no urgent interim relief sought in the plaint. According to him, though Section 12A is a mandatory provision, but the same is statutorily exempted in the case of urgency. He stated that, even otherwise, the application has been dismissed after the written statement was filed by the respondent and at the stage of hearing of the application under Order XXXIX Rules 1 and 2 of CPC. In other words,

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an order which generally is required to be passed at the threshold of the filing of the suit, has been passed much after the suit has been entertained and the respondent had appeared, filed his pleadings, the Court heard the arguments of both sides under Order XXXIX Rules 1 and 2 of CPC. He also stated, when the respondent had contested the suit and the application, the Trial Court could not have denied the permission to the appellant seeking exemption from pre-institution mediation process. He also stated, no purpose has been achieved for the appellant to resort to the pre-institution mediation as that the respondent shall contest the claim of the appellant in the pre-institution mediation process. In support of his submissions, he has relied upon the following judgments:

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a. Judgment of the Supreme Court in Yamini Manohar -Vs.- T.K.D. Keerthi [(2024) 5 SCC 815] ;

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b. Judgment of the Bombay High Court in the cases of Deepak Raheja -Vs.- Ganga Taro Vazirani [2021 SCC OnLine Bom 3124] and Chemco Plastic Industries Pvt. Ltd. -Vs.- Chemco Plast [Commercial IP Suit No.80 of 2024 , decided on 10.06.2024 ] ;

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c. Judgment of the Delhi High Court in the case of Chandra Kishore Chaurasia -Vs.- R A Perfumery Works Private Ltd. [2022 SCC OnLine Del 3529] ;

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He also stated that, the interim relief that has been sought is with regard to the trademark, which is an issue relatable to intellectual property rights, the same requires urgent consideration by the Court; any delay/knowledge to the respondent would defeat the very purpose seeking protection against the respondent. In other words, in a suit concerning intellectual property, the pre-institution mediation cannot be undertaken.

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We find that there is no appearance for the respondent despite service.

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Analysis:

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Having heard learned counsel for the appellant, we note that the Trial Court has dismissed IA No.1 which was seeking exemption from initiating pre-institution mediation under Section 12A of the Act. Two other applications were filed; one under Order XXXIX Rules 1 and 2 of CPC and the second one under Section 75 read

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with Order XXVI Rule 1 of CPC for appointment of a Court Commissioner.

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Before adverting to the submissions made by the counsel for the appellant, it is necessary to deal with the position of law as laid down by the Supreme Court and various High Courts.

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In the case of M/s Patil Automation Pvt. Ltd. and Ors. -Vs.- Rakheja Engineers Pvt. Ltd. [(2022)

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10 SCC 1] , the Supreme Court has put to rest the judicial divulgence by the various High Courts on the subject matter and held that the pre-institution mediation ought to be complied with before institution of a suit under the Act. The Supreme Court has also said, the requirement of pre-institution mediation would apply only where the plaintiff did not contemplate any urgent interim relief.

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The Delhi High Court also, in the case of Bolt Technology OU -Vs.- Ujoy Technology Pvt. Ltd. [(2022) 5 HCC (Del) 347] , held, it is for the Courts to

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determine whether urgent interim relief means such a relief which is required to be sought without undergoing pre-instittuion mediation. The High Court did acknowledge the fact that a case governing the intellectual property requires urgent consideration.

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In the case of Chandra Kishore Chaurasia

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(supra), it was held that it is the prerogative of the plaintiff to determine as to whether the suit involves any urgent interim relief or not on the frame of the plaint and relief sought.

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In the case of Yamini Manohar (supra), the

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Supreme Court held, when a suit praying for urgent interim relief is instituted, the Court concerned should assess the facts and circumstances of the case, the nature and subject matter of the suit, the cause of action and the prayer for interim relief. It held that the prayer for interim relief must not be a disguise or mask to wriggle out of and get over Section 12A of the Act. The Supreme Court has also stated, the Court must be cautious and ensure that the parties are not creating any artificial

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urgency merely to bypass the procedure laid down under Section 12A of the Act.

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So, the Court while examining whether the plaintiff is required to exhaust Section 12A before instituting the plaint, has to first examine whether the plaint contemplates any urgent interim relief. If it does not, then the suit must not be entertained if it has been instituted without exhausting the pre-institution mediation. If it is otherwise, the Court must necessarily entertain the plaint without requiring the plaintiff to exhaust pre-institution mediation. In arriving at this decision, the Court is not concerned in any way with the merits of the plea for interim relief. All that Court is required to determine is that the plea is genuine and bonafide .

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The case of the appellant in the plaint was that, it has registered both logo and wordmark ‘Kaveri’ and has been using it since inception. It uses and sells products under the brand name ‘Kaveri’, ‘Kaveri Plus’, ‘GK Star’, ‘Plumber’, E-Triveni’. It conceived and started to use the

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logo mark/device mark as ‘Kaveri logo’ from the year 1989. The appellant has registered various trademarks both word and device/logo under the trade name ‘Kaveri’. It is the case that the sales have increased every year using the mark ‘Kaveri’. It was in the month of January 2024, it came to the notice of the appellant that the respondent is manufacturing and selling storage tanks under the brand name ‘Krishna Kaveri’, wherein the word ‘Krishna’ is deliberately rendered in the same colour as the tank and only the word ‘Kaveri’ is made visible. According to the appellant, the mark ‘Krishna Kaveri’ is deceptively and confusingly similar to the registered and well-known mark of the appellant. The use of the word ‘Kaveri’ itself amounts to infringement of the appellant’s mark. The respondent has merely attached a prefix ‘Krishna’ to unlawfully utilize the registered mark of the appellant and deceiving the public into associating the infringing mark ‘Krishna Kaveri’ with the appellant’s registered mark ‘Kaveri’. The written statement filed by the respondent would reveal that they have adopted the mark ‘Krishna Kaveri’ in the year April 2018. It had

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preferred an application for registration of the mark ‘Kaveri’ on 03.02.2018 and the same was granted registration on 22.07.2024. The appellant had filed a rectification application against the said mark of the respondent on 10.01.2019; as such, the appellant was well within the knowledge that the respondent is using the registered mark of ‘Krishna Kaveri’. As such, there is an inordinate delay in bringing the suit for injunction. It has created the mark which is unique to identify with its products.

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Having noted the rival stand of the parties, it needs to be seen whether in the fact scenario, the application for urgent interim relief was bonafide ?

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It may be stated here that, there is no requirement in law that an application seeking exemption from initiating pre-institution mediation is required to be filed. It is only in the eventuality that an urgent relief is not sought that a pre-institution mediation needs to be resorted to. The Trial Court has primarily relied upon the rectification application filed by the appellant herein in the

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year 2019 which fact according to the respondent has been concealed and as such, the filing of application under Order XXXIX Rules 1 and 2 of CPC cannot give raise to a presumption that the plaintiff has really made a valid ground for presenting the case before complying Section 12A of the Act. Suffice to state, the filing of the rectification application in the year 2019 and the filing of the suit in the year 2024 cannot be considered as a ground for not considering the application under Order XXXIX Rules 1 and 2 of CPC. This we say because, the appellant is claiming interim relief on the basis of brand name ‘Krishna Kaveri’, which according to the appellant is by rendering the word ‘Krishna’ in the same colour and thereby projecting ‘Kaveri’ prominently, resulting the infringement of the trade mark of the appellant. The appellant has also, in the plaint, tried to project the revenue which is being generated by it over a period of time and in that regard, highlighting its reputation and goodwill. The question of delay and its effect on entitlement of a relief has no bearing on the aspect whether on the basis of the material on record, the

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appellant can contemplate urgent interim relief. In the case of Yamini Manohar -Vs.- TKD Keerthi [2023 SCC OnLine Del 2653] , the Delhi High Court held in favour of the plaintiff therein who despite the fact that the cease and desist notice was issued by the plaintiff on 06.11.2020 and the suit was eventually filed on 26.03.2022 by interalia holding, the delay is not fatal. The Supreme Court upheld the judgment of the High Court, in that context specifically held, the Court is expected to conduct a limited exercise in such cases and the contemplation of urgent interim relief has to be considered holistically from the standpoint of the plaintiff.

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The time gap between the rectification application and the filing of the suit cannot lead to a conclusion that the appellant cannot contemplate urgent interim relief. It is one thing to say that the appellant contemplates urgent interim relief, but different that in the facts it is entitled to the interim relief. It is also a fact

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that the plaintiff has also filed an application for appointment of a Court Commissioner. The prayers made

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in the application are for seizing all infringing materials, including books of accounts, marketing and packaging materials, etc. Moreover, the suit having proceeded further in as much as the written statement was filed by the respondent and it was at the stage of consideration of the application under Order XXXIX Rules 1 and 2, CPC and also for appointment of a Court Commissioner, this application came to be dismissed, that too when the respondent had opposed the suit itself, it is very difficult to contemplate that even if the appellant undertakes the pre-institution mediation, the parties are likely to settle their interse dispute. Under such eventuality, we are of the view that the Trial Court should have allowed the application and entertained the suit by considering the application under Order XXXIX Rules 1 and 2 of CPC and also application under Section 75 read with Order XXVI Rule 1 of CPC.

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Hence, the appeal is allowed . Order dated 04.09.2024 passed by the Trial Court on IA No.1 in Com.O.S.No.631/2024 is set aside. The application being IA No.1 is allowed and disposed of . The suit and the

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