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Improper & unexplained delay is fatal to an application for interlocutory injunction, dismisses Allied Blenders & Distillers application

Allied Blenders and Distillers Pvt. Ltd. vs. Amit Dahanukar & Anr.

HC dismisses both application and rules in favour of Plaintiffs; finds that first application is barred by gross delay and laches and holds that second application isn’t barred under Order 2 Rule 2 CPC since the cause of action is a continuing cause of action.

In the first matter Allied Blenders and Distillers Pvt. Ltd. (Plaintiffs) filed a suit seeking a decree of permanent injunction against Amit Dahanukar & Anr. (Defendants) to restrain Defendants  from manufacturing, selling, etc. alcoholic beverages especially IMFL and/or goods of any description bearing the trademark MANSION HOUSE and SAVOY CLUB or any other mark which is deceptively similar to the Plaintiff’s said registered trademarks.

Present suit concerns the trademarks MANSION HOUSE, MH and SAVOY CLUB for alcoholic beverages. Plaintiffs aver that they had been using the aforementioned marks for over 70 years and have acquired ownership in the said marks for India and other neighbouring countries. Plaintiffs further aver that the Defendant suggested that the said trademarks in India be temporarily transferred to the Defendant so that the Plaintiff was not liable for its use in India and another agreement was entered into between the parties in 1987, according to which Defendants were obligated to buy concentrate of the Plaintiffs. Plaintiffs submit that they terminated the agreement due to breach by Defendants. Plaintiffs submit that Defendant has surreptitiously applied for the trademark and copyright registrations and excise approvals for the said trademarks in India in its own name. Plaintiffs filed a suit before the Bombay High Court in 2009 against Defendants to restrain passing off of the said suit trademarks by defendants and infringement of the copyright by the Defendants. Plaintiffs state that the use of the said trademark by the defendants after termination of the license amounts to infringement of the Plaintiff’s trademark MANSION HOUSE and SAVOY CLUB. Defendants state that Plaintiffs are guilty of Forum Shopping and abuse of process of law.

HC observes that Bombay High Court dismissed the notice of motion filed by the Plaintiffs.  HC further notes the action of the plaintiff herein in filing of the suit before this Court when the matter was pending before the Bombay High Court and interim order had been declined by the judgment of the Bombay High Court dated 22.12.2011. HC noted that it is the most brazen form of Forum Shopping and restrained the Plaintiffs from taking any steps in the present proceedings till 7.11.2014, which order was modified on 14.11.2014. HC observes that the issue would be as to whether the Plaintiff can be permitted to now all over agitate the same facts to seek interim orders against Defendants  by filing the present suit and interim injunction application which relief was declined by the Bombay High Court and appeal against which order is pending.

HC refers to the decisions in India Household and Healthcare Ltd. vs. LG Household and Healthcare Ltd., (2007) 5 SCC 510 and Neon Laboratories Ltd. vs. Medical Technologies Ltd. & Ors.,(2016) 2 SCC 672. HC observes that the parties to the suit in Bombay and the present suit are virtually identical/have a commonality of interest. HC further observes that the said suit in Bombay was filed in 2009 whilst the interim injunction application was dismissed on 22.02.2011 and a clear prima facie findings of fact were recorded in favour of the Defendants and against the Plaintiffs. It is thereafter that the present suit has been filed on 10.10.2014. The plaintiffs seek interim orders from this court despite being declined relief by the Bombay High Court.   

HC finds that HC has to give due deference to the enunciation made by another court especially when the litigants are the same and the said legal proposition squarely applies to the facts of the case. The Plaintiff having filed suit based on identical facts before the Bombay High Court and having been declined an interim injunction cannot now try to overreach the said order of the Bombay High Court and file the present suit in Delhi High Court seeking an interim injunction. HC notes that Bombay High Court in its judgment recorded a finding that the Plaintiffs herein for 16 years proceeded on the basis that by document dated 23.02.1987, the trademarks have been transferred and assigned to the defendants. The court also concluded that the Plaintiffs permitted Defendants to sell their products with the said marks and therefore, alleged breaches by the Defendants of the documents dated 23.02.1987 were waived by the Plaintiffs.

HC observes that Plaintiffs stood by while the Defendants continued with its business and built up its trade and have approached this court by filing of the suit seeking an interim injunction to restrain the defendants from using the said trademarks after an alleged delay of 11 years. There is an unexplained delay on the part of the plaintiffs. HC states that it would be improper for this court to grant any interim injunction to the plaintiff on account of gross delay, latches and acquiesce.  HC places reliance on Power Control Appliances v. Sumeet Machines (P) Ltd., (1994) 2 SCC 448 where it was held that … It is necessary that an application for interlocutory injunction should be made immediately after the plaintiff becomes aware of the infringement of the mark. Improper and unexplained delay is fatal to an application for interlocutory injunction. The interim injunction will not be granted if the plaintiff has delayed interfering until the defendant has built up a large trade in which he has notoriously used the mark…..

Thus HC dismisses the application and vacates the Interim order dated 13.11.2017

In the second matter Defendants filed a suit seeking dismissal of the suit under Order 2 Rule 2 CPC. Plaintiff pleads that Order 2 Rule 2 CPC has no application. Plaintiff relies on Bengal Waterproof Ltd. v. Bombay Waterproof Manufacturing Company & Anr. (1997) 1 SCC 99. HC examines the case and finds that SC  was of the view that infringement of the trademark is a continuing cause of action. It also noted that the act of passing off is an act of deceit under the Law of Torts and whenever such act is committed by the defendants, the plaintiff gets a fresh cause of action to come to the court. Similarly, the same situation prevails regarding infringement of the trademark. In those facts and circumstances, the Supreme Court took the view that the subsequent suit is not barred under Order 2 Rule 2.

HC references the decision of the Division Bench of the HC in Syndicate Bank vs. Raj Kumar Tanwar, 154 ( 2008) DLT 230. The only contention raised in the case was that the landlord had filed the suit seeking ejectment of the appellant from the tenanted premises stating that the lease has come to an end by efflux of time. A second suit was filed by the landlord claiming damages for unauthorised use and occupation. The issue was as to whether the second suit is barred under Order II Rule 2 CPC. HC finds that the facts of the present case are identical to Bengal Waterproof Ltd. HC finds that the earlier suit was filed in Bombay in 2009 and another suit has been filed in 2014. The cause of action being a continuing cause of action, the present suit would not be barred under Order 2 Rule 2 CPC. HC dismisses the application.

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