P v Anand Kishore Vs M/S Bhatt Electronics (P) Ltd.

THIS RFA IS FILED U/SEC.96 OF CPC, AGAINST THE ORDERS DATED 05.06.2011 PASSED IN FDP.NO.37/1991 ON THE FILE OF THE XXVII-ADDL. CITY CIVIL JUDGE, BANGALORE, ALLOWING THE PETITION FILED U/O-20, RULE-17, R/W, SEC.151 OF CPC.

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THIS APPEAL, COMING ON FOR FINAL HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

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CORAM: HON'BLE MR. JUSTICE M.G.S. KAMAL

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NC: 2026:KHC:4403 RFA No. 2181 of 2011

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HC-KAR

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ORAL JUDGMENT

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This appeal is by the defendants in O.S.No.3085/1985 aggrieved by the order dated 05.06.2011 passed in F.D.P. No.37/1991 on the file of XXVII Additional City Civil Judge, Bengaluru, (hereinafter referred to as 'FDP Court') in terms of which, while allowing the petition filed by the plaintiff/respondent herein under Order XX Rule 17 read with Section 151 of CPC, defendants/appellants herein have been held liable to pay Rs.3,00,000/- towards the sale of electronic goods (Nite Honda) by the defendant No.1/appellant No.1, payable to the plaintiff/respondent with interest at 8% per annum from the date of petition till realisation.

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Brief facts of the case leading upto filing of the present appeal are that, the above suit in O.S.No.3085/1985 filed by the plaintiff/respondent herein under Section 105 of the Trade and Merchandise Marks Act,1958 and Section 53 of the Designs Act, 1911 read with Section 26, and Order VII Rule 1 of CPC, for the following reliefs:

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''(a) Manufacture or marketing emergency lights or torches bearing the impugned design as per Exhibit No.2, hereto or any other design which is either a fraudulent or obvious imitation of the plaintiff's registered design Nos. 151581 in class 1 (one) and 151582 in Class 3 (Three) or by use of impugned mark

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'NITE HONDA' or any other on or in relation to such goods which is in any manner deceptively or confusingly similar to the plaintiff's trademark "NITESUN', and from passing off emergency lights or torches (not of the plaintiff's manufacture) as or for the plaintiff's emergency lights or torches as per Exhibits No.1 hereto by the use of the impugned design as per Exhibit-2 hereto or any other design which is in any manner deceptively or confusingly similar to the plaintiff's design as per Exhibit No.1, hereto and

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OR

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Directing the first and second defendant to render on oath a true and faithful account of the offending emergency lights or torches sold by them with full particulars of each sum ad may be determined by this Hon'ble Court as damages for the piracy of design and passing off committed by the defendants.

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(ii) Directing the first and second defendants to surrender to the plaintiff. For destruction, all offending emergency lights or torches all pamphlets, trade literature and the like and all implements used in the manufacture of preparation of the same including blocks, dies moulds and the like.

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(c) Directing the defendant to pay to the plaintiff the costs of this suit; and

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(d) granting such other relief or relief's as this Hon'ble Court may deem fir to grant in the circum stances of the case in the interest of justice.''

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3. The said suit after the contest was decreed by the

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judgment and order dated 30.08.1989 as under:

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ORDER

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''The suit of the plaintiff is decreed with costs.

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Defendant 1 and 2 are herby permanently restrained from manufacturing and marketing the said emergency lights or torches like Ex.P-16 which is the imitation of the plaintiff's registered design No.151581 in class-I, and 151582 in Class-3.

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Defendant 1 and 2 or any one claiming under them are hereby permanently restrained from using the impugned mark NITEHONDA or may other mark in relation to the goods manufactured by them.

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NC: 2026:KHC:4403 RFA No. 2181 of 2011

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HC-KAR

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There shall be an enquiry into the sale of the emergency lights or torches sold by defendant 1 and 2 claiming to be the goods of the plaintiff under the name and style NITEHONDA.

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Draw decree accordingly.''

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Aggrieved by the said judgment and decree, appellant herein had preferred a Miscellaneous Appeal in M.A.No.330/1993, which was dismissed on 09.10.2001. As against which, a Miscellaneous First Appeal in MFA No.6943/2001 was filed and same was also dismissed on 30.06.2005. Thus, judgment and decree dated 30.08.1989 attained finality. In furtherance to the said judgment and decree, plaintiff/respondent herein filed an application under Order 20 Rule 17 of CPC seeking determination of damages. Objections to the same were filed.

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One Sri. K. C. Bhatt, who is the plaintiff/respondent herein examined himself as PW1 and exhibited 38 documents as Ex.P1 to Ex.P38. One Sri. P.V. Anand Kishore-defendant No.1/appellate No.1 herein examined him as RW1. No documentary evidence was led in. On appreciation of the evidence, the FDP Court passed the following order:

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''Petition filed by the petitioner under Order 20 Rule 17 R/w/S 151 of CPC 151 of CPC is allowed with costs.

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HC-KAR

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The mesne profits is determined at Rs.3 lakhs towards the sale of the electronic goods (Nite Honda) by respondent No.1. Petitioner is held entitled for the said mesne profits of Rs.3 lakhs together with interest at the rate of 8% pa from the date of petition till realisation.

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The petitioner to pay the requisite court fee on the amount determined.

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There shall be final decree in the above terms.

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Office to draw the final decree after collecting necessary court fee.''

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Aggrieved by the same, the present appeal is filed.

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Sri. Mithun Gerahalli, learned counsel appearing for the

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appellant taking this Court through the records, vehemently submits that the impugned judgment and order passed by the FDP Court is unsustainable as the same runs contrary to the settled principles of law. That unless and until a direct nexus is pleaded, proved and established with regard to manufacturing of the alleged product and selling of the same, a relief of damages can neither be considered nor ascertained. That legally acceptable cogent evidence is required to be presented and proved and it cannot be left for mere inference from the facts and circumstances of the case. He refers to document at Exs.P2 and P3 produced by the plaintiff/respondent herein, in support of the allegation of defendant/appellant involving in the sale of the product to contend that the said documents are

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hardly of any use, inasmuch as there is neither any name of the appellant nor the indication of appellant manufacturing and selling the product. Therefore, he submits that the FDP Court has grossly erred in fastening the liability of damages on the appellant in the absence of any acceptable evidence, resulting in perversity in the impugned judgment.

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In support of his contention, he relies upon the judgment of the Delhi High Court in the case of Infosys Technologies Ltd., Vs. Prak Infosys and others¹ , referring to paragraph Nos.42 and 43 of the said judgment, he insists

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that in terms of the law which is settled, unless direct cogent evidence is produced to establish the loss which has resulted on account of direct link or nexus of manufacture and selling of the product of the appellate, plaintiffs are not entitled for the relief as sought for. Hence, seeks for allowing of the appeal.

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In response, Sri. Y.K. Narayana Sharma, learned counsel for the plaintiff/respondent herein taking this Court through the record, submits that the preliminary decree passed by the trial Court in O.S.No.3085/1985 having attained finality.

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1 (2007) 137 DLT 349

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HC-KAR

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Wherein a categorical finding has been rendered with regard to defendant/appellant having involved not only in the manufacturing of the product but also of its sale, it is not open for the appellants now to re-agitate the said issue. He submits there is an admission on the part of the respondent witness of he purchasing the product from the plaintiff which is sufficient enough to indicate that he was not only involved in manufacturing but imitating the product of the plaintiff/respondent herein, but was also involved in selling of the product. As regards, the proof of loss sustained by the plaintiff, he submits as many as 38 documentary evidence have been produced including the balance sheets and account statements indicating declining sales of the product by the plaintiff/respondent herein, which are solely attributable to the illegality committed by the defendant/appellant herein. He further submits that on the contrary, no documentary evidence has been produced by the defendant/appellant herein with regard to the nature of sales of their business and the quantum though he had admitted to have maintained such accounts, which the FDP Court has taken note of. Thus he submits that no error or irregularity can be attributed in FDP court coming to

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the conclusion in fastening the liability or payment of the

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damages as done in the instant case.

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Heard and perused the records.

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The only point that arise for consideration is;

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(1). Whether the FDP Court was justified in accepting the plea of the plaintiff/respondent herein in fastening the liability of payment of Rs.3,00,000/- as damages together with interest rate 8% per annum from the date of petition till realisation?

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Facts with regard to filing of the suit, unsuccessful challenge to the decree passed therein by the respondent as noted hereinabove do not require reiteration. However, for the limited purpose of appreciating the contentions urged by the learned counsel by the appellant and the respondent, the averments in the plaint and the written statement, evidence led therein and the findings given by the trial Court are adverted to as hereunder.

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At paragraph No.10 of the plaint, the plaintiff has specifically averred as under:

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'' It is submitted that the 1st defendant was a dealer in Automobile spare parts and he started the business in

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dealing in Emergency Lights and Torches at the instance of the plaintiff and commenced the said business with the sales of the plaintiff's products. However, later on after he found that the business in dealing with the sales of plaintiffs' produced was lucrative, the 1st defendant, for fraudulently made use of the good will established by the plaintiff in the sales of plaintiff's produced, for the sale of the defendant's won produced by infringing the rights of the plaintiff and putting the plaintiff to loss.''

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Perusal of the written statement would indicate that

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there is neither any express nor there is any implicit denial to the aforesaid pleading. It is settled position of law, averment made in the plaint have to be specifically denied, failing which, same would amount to admission. The Apex Court in the case

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of Thangam vs Navamani Ammal, wherein at paragraph

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Nos.24 to 27 held as under:

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24. In the absence of para-wise reply to the plaint, it becomes a roving inquiry for the Court to find out as to which line in some paragraph in the plaint is either admitted or denied in the written statement filed, as there is no specific admission or denial with reference to the allegation in different paragraphs.

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25. Order 8 Rules 3 and 5 CPC clearly provides for specific admission and denial of the pleadings in the plaint. A general or evasive denial is not treated as sufficient. Proviso to Order 8 Rule 5 CPC provides that even the admitted facts may not be treated to be admitted, still in its discretion the Court may require those facts to be proved. This is an exception to the general rule. General rule is that the facts admitted, are not required to be proved.

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26. The requirements of Order 8 Rules 3 and 5 CPC are specific admission and denial of the pleadings in the plaint. The same would necessarily mean dealing with the

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allegations in the plaint para-wise. In the absence thereof, the respondent can always try to read one line from one paragraph and another from different paragraph in the written statement to make out his case of denial of the allegations in the plaint resulting in utter confusion.

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27. In case the respondent-defendant wishes to take any preliminary objections, the same can be taken in a separate set of paragraphs specifically so as to enable the plaintiff/petitioner to respond to the same in the replication/rejoinder, if need be. The additional pleadings can also be raised in the written statement, if required. These facts specifically stated in a set of paragraphs will always give an opportunity to the plaintiff/petitioner to respond to the same. This in turn will enable the Court to properly comprehend the pleadings of the parties instead of digging the facts from the various paragraphs of the plaint and the written statement.

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Similarly, in the case of Jaspal Kaur Cheema vs. Industrial Trade Links reported in (2017) 8 SCC 592 the

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Hon'ble Apex Court at paragraph No.7 held as under:

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7. In terms of Order 8 Rule 3 of the Code of Civil Procedure, 1908 (for short “the Code”), a defendant is required to deny or dispute the statements made in the plaint categorically, as evasive denial would amount to an admission of the allegation made in the plaint in terms of Order 8 Rule 5 of the Code. In other words, the written statement must specifically deal with each of the allegations of fact made in the plaint. The failure to make specific denial amounts to an admission. This position is clear from the decisions of this Court in Badat and Co. v. East India Trading Co. [Badat and Co. v. East India Trading Co., (1964) 4 SCR 19 : AIR 1964 SC 538] , Sushil Kumar v. Rakesh Kumar [Sushil Kumar v. Rakesh Kumar, (2003) 8 SCC 673] and M. Venkataramana Hebbar v. M. Rajagopal Hebbar [M. Venkataramana Hebbar v. M. Rajagopal Hebbar, (2007) 6 SCC 401] .

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NC: 2026:KHC:4403 RFA No. 2181 of 2011

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HC-KAR

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The trial Court, while answering issue Nos.2 and 3,

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namely:

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'' 2. Does he further prove that defendant has committed gross piracy of the registered design and passing of his articles and thereby causing loss and damage to him?

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3. Is plaintiff entitled to injunction sought for?''

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At paragraph No.11 of the judgment trial court has

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categorically come to the conclusion that: '' in spite of giving number of opportunities to the defendant No.1, he has not disclosed the name of the manufacturer of Ex.P16 and there is nothing on record to show whether there is a patent registered any emergency light under the name of NITEHONDA. Ex.P17 and Ex.P18 are the two certificates issued by the plaintiff in favour of defendant No.2 to show that he was working with the plaintiff . ''

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This fact is not denied by the defendant No.2. Ex.P19 is a letter by the plaintiff to defendant No.2. The said letter is also intimating defendant No.2, the imitation articles.

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At paragraph Nos.12 and 13, the trial Court has held as under:

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''12. It is the case of the plaintiff that in the beginning, there was lot of sales in the business of the emergency lights after

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introducing Ex.P-15 and subsequent to imitation of Ex.P15 like Ex.p16, there was a decline in the sale of the products of the plaintiff and therefore, according to him he has suffered heavy loss. The visiting card which was marked ad Ex.P-8 clearly goes to show that subsequent to leaving the services of the plaintiff concern, the 2nd defendant was a stockiest and dealer for Honda articles. Either the 1st defendant or the 2nd defendants have not disclosed the name of the manufacturer NITEHONDA. Therefore, the Court has to presume that the defendant have committed piracy of the registered design of the plaintiff and have manufactured emergency lights like Ex.P-16 which is exactly the imitation of Ex.P-15.

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13. The affidavit of 3rd party at Ex.P-7 clearly goes to show that public was under the impression that Ex.P-16 is the product of the plaintiff concern which is of a changed variety. As per the affidavit it clearly goes to show that emergency lights NITEHONDA was not of a good quality. According to the plaintiff there was a decline in his business on account of introduction of imitation of emergency lights. There is no rebuttal evidence on behalf of the defendants. The oral evidence of the plaintiff along with other documentary evidence clearly goes to show that he did suffer loss on account of piracy of the design committed by the defendants 1 and 2. It there is no order of injunction, the plaintiff would be put to irreparable loss and hardship and if there is an order of injunction, defendants 1 and 2 would not be put to any such hardship or irreparable loss and injury. Hence, the Court is of the opinion that issue No.2 has to be answered in the Affirmative and issue No.3 in the Negative. Accordingly both these issues are answered.''

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Clearly, it is based on the aforesaid material evidence

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and admission on record, the trial Court had come to the conclusion of defendants/appellant herein being guilty of manufacturing the products as that of the plaintiff's and committing piracy of the designs. The aforesaid pleading as noted above, evidence and the finding not having been disputed, now it does not lie in the mouth of the defendant/appellants herein to contend that they were neither

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connected directly nor indirectly, nor were they involved in manufacturing or selling of the product.

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Plaintiff in the plaint at paragraph No.11 has extracted the statement of its sales and turnover in respect to said emerging lights for the period of 1982-83 to 1984-85

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indicating purported decline in its sales, which is as under:

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PERIOD	SALES TURNOVER
(April-March)
1982-83	Rs.97,137-75/-
1983-84	Rs.49,163-96/-
1984-85	Rs.22,296/-

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Plaintiff has also produced documents in support of

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the said business turnover at Ex.P20. In addition to production of Exs.P2 and P3, though which is vehemently disputed by learned counsel for the appellant, has also produced affidavit of

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one Rugmani Menon produced at Ex.P4 with regard to purchase of the imitation product.

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Reliance placed on by learned counsel for the appellant to the judgment in the case of Infosys

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Technologies Ltd(referred supra) wherein at paragraph

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Nos.42 and 43 it is held as under:

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''42. In an action for infringement of trademark, the profits made by the defendant cannot always be the true criterion of the damages awardable to the plaintiff as the defendant's gain may not always be proportionate to the plaintiff's loss. However, it is trite that the plaintiff's loss or the defendant's gain will not be assumed in the absence of proof. The plaintiff is required to prove some distinct damage from the infringement of his trademark by defendant. The effect of the infringing acts of the defendant may be evidenced by diminishing of the quantum of goods sold by the plaintiff for the reason that the defendant took away the plaintiff's customers. The defendant may also impact the plaintiff's customers. The defendant may also impact the plaintiff's business by causing him to sell its products at a lower price. In either event, there would be a reduction in either the total volume of the plaintiff's business or lowering in the percentage increase of business as compared to the previous years. Thus the measure of damage suffered by the plaintiff is to be found by an assessment of the profits the plaintiff would have made if the offending article had not been introduced by the defendant in the market or if the defendant had not undertaken the illegal activities complained of by the plaintiff. Accordingly, the plaintiff is held to be entitled to the decree of injunction as well as an order for delivery up forthwith of all goods and stationery bearing the trademark or capable of reproducing the trademark. These facts have to be proved by the evidence on record either relating to the business of the defendants or which could be assessed from a decline in the business of the plaintiff on account of the activities of the defendant which could be gathered from the figures of sales over the period of time during which the plaintiff has continued with the activities complained of and an assertion of such loss by the plaintiff in its evidence.

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43. Upon a consideration of the plaint and the affidavit by way of the evidence filed before this Court, I find that the plaintiff has failed to prove either the profits derived by the defendant from its illegal activities or such sales record to establish the loss which has resulted to the plaintiff by establishing a decline in the value of its business or a fall in the percentage increase in the business as compared to preceding years. The only material which has been placed by the plaintiff on record is the value of its international sales over different years. Bald figures without even an assertion of loss or diminution in business and without any submission in this behalf do not establish the

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essential features noticed above which would have entitled the plaintiff to damages. Therefore, while holding that the defendants cannot be permitted to continue with its illegal activities, however, I find that no award of damages can be made in favour of the plaintiff.''

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The said judgment in the opinion of this Court would

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be more helpful to the plaintiff than the defendants. In that, as observed in paragraph No.4, the assessment of the decline in

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the business of the plaintiff can be gathered from the accounts activities and the figures of sale over the period of time during which the plaintiff has continued with the activities complained and assertion of such loss to the plaintiff in its evidence. As already noted above, there is no denial directly, expressly or implied by the defendant of he indeed, selling the product of plaintiff as asserted at paragraph No.10 of the plaint. There is also no denial or any rebuttal evidence by the defendant of he

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or anybody else manufacturing the said product. Sale is only consequential of it, which can be inferred from the fact and circumstances of this case. Though Exs.P2 and P3 may not bear the name of the manufacturer, pleading at paragraph No.10 and the finding of the trial court for issue Nos.1 and 2 has to be read in the light of the evidence led by the plaintiff

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with regard to decline of his sale product, which has been appreciated by the FDP Court.

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Therefore, this Court under facts and circumstances, do not find any illegality or irregularity in the conclusion arrived at by the FDP Court. Appeal is dismissed. Order passed by

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the FDP Court is confirmed.

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Sd/(M.G.S. KAMAL) JUDGE

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RL

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List No.: 1 Sl No.: 11

P v. Anand Kishore v M/S Bhatt Electronics (P) Ltd.

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P v. Anand Kishore v M/S Bhatt Electronics (P) Ltd.

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