Chandra Plastic Industries vs Parasmal Jain, Proprietor, Oswal Trading Company

D.H. Nasir, J.—The Civil Revision Petition arises from an Interlocutory Order passed by the lower Court refusing to stay the suit proceedings taken by the plaintiff/ petitioner itself. The suit is filed for obtaining a declaration that the defendant/ respondent had committed an infringement of the Copyright registered in favour of the plaintiff/petitioner.

The grounds taken by the lower Court for refusing to stay the suit proceedings were that the petition for stay was made at a stage when the suit was posted for arguments and that the petition was made with a mala fide intention of protracting the suit proceedings. The plaintiff/petitioner urges that common question of law and fact arise in the suit proceedings on one hand and the rectification proceedings on the other, and that the order in rectification proceedings in Case No. 13 of 1993 before the Copyright Board would be conclusive, which made it necessary that the suit proceedings should be stayed so as to avoid the possibility of conflicting views in the eventual orders and also to avoid multiplicity of proceedings.

The petitioner before us filed a suit being O.S.No.1 of 1987 in the Court of the District Judge, Ongole under Sections 55 and 62 of the Copyright Act, 1957 for obtaining a perpetual injunction against the defendant from committing infringement of plaintiff''s Copyright "Swastic Cane" registered under Regn. No.A-40307/83 and for obtaining consequential directions against the defendant. The plaintiff also prayed for compensation for the loss sustained by the plaintiff on account of the infringement of Copyright allegedly committed by the defendant.

The suit and the cognate proceedings are hotly contested by the defendant. Subsequent to the filing of the suit, the plaintiff initiated proceedings before the Copyright Board, New Delhi in 1993 u/s 50 of the Copyright Act for Rectification by expunging the Copyright No. A-49102/87 which was registered in favour of the defendant. The grounds taken by the plaintiff before the Board are to the effect that a Copyright Certificate was issued to the petitioner (original plaintiff) by the Registrar under Sections 17 and 18 of the Copyright Act, 1957 and that the respondent (original defendant) started imitating and misbranding his goods with the same label as that of the petitioner knowing fully well that the Copyright in respect thereof was already registered in favour of the petitioner. However, the respondent clandestinely managed to secure its registration in the Register of Copyright Board bearing Regn. No.A-49102/87 dated 24-11-1987. It is the further case of the petitioner that in I.A.No.1829/87 in O.S.No.1 of 1987 on the file of the District Judge, Ongole, an ad interim injunction was issued against the respondent preventing him from imitating the copyright which was upheld by the High Court of A.P. in C.M.A.No.181 of 1989 dated 4-7-1989. Therefore, according to the petitioner, its copyright achieved the status of finality. As a counter-blast, the respondent filed Case No. 11 of 1987 before the Copyright Board for rectification of Register of Copyright by expunging the entry relating to the petitioner''s copyright. The Board, however, rejected the same by an order dated 8-9-1990 and held that the copyright of the petitioner was legal and proper.

According to the petitioner, in spite of the above, the respondent went on using the entry with register No.A-49102/87 causing irreparable loss to the petitioner. On these grounds, the petitioner sought rectification of the Register of Copyright by expunging the Entry No.A-49102/87.

Elaborate submissions were made by the learned Counsel for the rival parties as to how the Copyright Registration in their favour was legal and proper and how the respondent''s case was liable to be defeated and vice versa, However, I believe that at this Interlocutory stage, it is not advisable and desirable to examine and scrutinise the rival claims as it would tend to expressing an opinion on the merits of the case.

The main question which engages the Court''s attention is whether the action in rectification resorted to by the petitioner was palpably delayed with a view to protracting the suit filed by the petitioner itself. This argument, however, is attempted to be dealt with by the learned Counsel for the petitioner by submitting that the proceedings for rectification were initiated by the petitioner during the pendency of O.S.No.1 of 1987 on account of the fact that the respondent managed to cause a Certificate amended according to which the defendant''s use of Copyright commenced from January, 1970. Thereupon, the plaintiff was required to file Case No. 13 of 1993 before the Copyright Board for expunging the entry relating to Registration No.A-49102/87 in favour of the defendant. Since the petition filed by the defendant was dismissed on 8-9-1990 which was subsequent to the institution of the suit being O.S.No.1 of 1987, it became necessary for the petitioner to file Case No. 13 of 1993 before the Copyright Board, New Delhi for expunging the entry relating to Register No.A-49102/87 in favour of the defendant which is still pending.

With the above facts in view, it would appear that the initiation of the rectification proceedings by the petitioner subsequent to the filing of O.S.No.1 of 1987 was not unjustified. However, the petitioner allowed as many as three years to lapse before initiating Case No. 13/1993 after the defendant''s case No. 11 /1987 was dismissed by the Copyright Board on 8-9-1990. The petitioner also took further three years time for filing I.A.No.184 of 1996 in O.S.No.1 of 1987 for staying the suit proceedings. During the intervening period, the plaintiff proceeded with the trial and examined P.Ws.1 to 3 and closed his evidence. Thereafter, the defendant examined D.W.I and closed his evidence. Arguments were also advanced on behalf of the rival parties on 24-1-1996. There could, therefore, be no doubt about the fact that the time factor involved in seeking the stay of the suit has to be seriously considered along with other factors for deciding whether the suit proceedings could be stayed or not. If both the proceedings, one before the Court and the other before the Copyright Board are allowed to be prosecuted parallely, the possibility that conflicting views may be expressed by two separate Forums cannot be totally ruled out and in that eventuality, which Forum''s views could be given precedence may arise for consideration.

On this question, the High Court of Calcutta in Formica International Ltd. Vs. Caprihans (India) Pvt. Ltd. and Others, , took a view in relation to Section 111(1) of the Trade and Merchandise Marks Act, 1958 (for short ''the Act'') that the reason for introduction of this Section was to avoid parallel enquiries into the question of validity of a trade mark. Sub-Section (4) of Section 111 of the Act laid down that the final order made in a rectification proceeding shall be binding upon the parties and the Court should dispose of the suit in conformity with such order in so far as it related to the issue as to the validity of the registration of the trade mark. The High Court further observed that the causes of action for infringement and passing off were distinct and separate and one of them might fail while the other might succeed on the same evidence. In a suit where the two causes off actions were combined and the defendant sought to invoke the provisions of Section 111, the Court had the power and the duty to stay the suit so far as it related to infringement of trade mark. The Court trying the suit must wait for the result of the rectification proceedings before passing any final order or decree invoking the validity of the registration. The High Court further observed that it was true that the suit in that case may have to be tried piecemeal, but having regard to the mandatory provisions of Section 111, there was no other alternative.

Section 111 of the Trade and Merchandise Marks Act, 1958 provides as under:-

"111. Stay of proceedings where the validity of registration of the trade mark is questioned, etc. - (1) Where in any suit for the infringement of a trade mark-

(a) the defendant pleads that the registration of the plaintiff''s trade mark is invalid; or

(b) the defendant raises a defence under Clause (d) of sub-section (1) of Section 30 and the plaintiff pleads the invalidity of the registration of the defendant''s trade mark;

the Court trying the suit (hereinafter referred to as the Court), shall,-

(i) if any proceedings for rectification of the register in relation to the plaintiff''s or defendant''s trade mark are pending before the Registrar or the High Court, stay the suit pending the final disposal of such proceedings;

(ii) if no such proceedings are pending and the Court is satisfied that the plea regarding the invalidity of the registration of the plaintiff''s or defendant''s trade mark is prima facie tenable, raise an issue regarding the same and adjourn the case for a period of three moths from the date of the framing of the issue in order to enable the party concerned to apply to the High Court for rectification of the register.

(2) If the party concerned proves to the Court that he has made any such application as is referred to in Clause (b)(ii) of sub-section (1) within the time specified therein or within such extended time as the Court may for sufficient cause allow, the trial of the suit shall stand stayed until the final disposal of the rectification proceedings.

(3) If no such application as aforesaid has been made within the time so specified or within such extended time as the Court may allow, the issue as to the validity of the registration of the trade mark concerned shall be deemed to have been abandoned and the Court shall proceed with the suit in regard to the other issues in the case.

(4) The final order made in any rectification proceedings referred to in sub-section (1) or sub-section (2) shall be binding upon the parties and the Court shall dispose of the suit conformably to such order insofar as it relates to the issue as to the validity of the registration of the trade mark.

(5) The stay of a suit for the infringement of a trade mark under this section shall not preclude the Court making any interlocutory order (including any order granting an injunction, directing accounts to be kept, appointing a receiver or attaching any property), during the period of the stay of the suit."

The above provisions of Section 111 do give us a lever to stay the suit for infringement of a trade mark, but not precluding the Court from making any Interlocutory Order. Sub-section (4) thereof directly speaks on the question under our consideration for the time being that the final order made in any rectification proceedings referred to in sub-sections (1) and (2) shall be binding upon the parties and, therefore, the Court should dispose of the suit conformably to such order in so far as it related to the issue as to the validity of the registration of the trade mark.

We are not concerned in this suit with the provisions of Trade and Merchandise Marks Act, 1958. The rights and liabilities of the parties fall for our consideration in this suit under the provisions of Copyright Act, 1957. But in the absence of any provisions in the Copyright Act similar to Section 111 of the Trade and Merchandise Marks Act, on the basis of the same being an allied statute and on analogical deduction the provisions relating to the remedies available in an action for infringement of Copyright and rectification proceedings could safely be considered and in that case the ratio laid down by the High Court of Calcutta in Formica''s case (1 supra) could safely be applied for coming to a conclusion that the suit may be stayed pending the decision on rectification proceedings.

Same view is expressed in the case of Alkarma Vs. Delhi Development Authority, by the High Court of Delhi. Paragraph 4 of the said decision which is relevant for our purpose is reproduced below:-

"4. As for the question of stay, the position appears to be quite simple. Both the parties are registered owners of the identical trade marks. The trade marks in favour of one are under challenge by the other. Rectification proceedings in respect of the registration of the trade mark ''Sainik'' in favour of the plaintiff were pending before the Registrar of Trade-marks, New Delhi, even before the institution of the suit and the factum of pendency is admitted in the plaint in terms. The proceedings for the rectification of registration in respect of ''Harsha'' were filed subsequently and are pending in this Court. Plaintiff has also admittedly challenged the subsisting registration in favour of the defendants and these are pending in this Court. True, one of the rectification proceedings was filed subsequent to the institution of the suit but in view of sub- sec.(2) of Section 111 of the Trade and Merchandise Marks Act, 1958, once such proceedings are filed, for the purpose of stay the fact that they are subsequent to the suit would be immaterial. In view of the contest between the parties with regard to the validity of the registration of each other, it is reasonable and proper that the suit is stayed u/s 111 of the Act."

The learned Counsel for the defendant submitted that the ends of justice would be defeated if the suit proceedings are stayed in view of the fact that the rectification proceedings may not end with the order of the Copyright Board because the possibility of the party aggrieved by such order carrying the same in appeal or revision before the superior Forum cannot be ruled out and in that case the proceedings would be exposed to inordinate delay. This submission, however, cannot be accepted because the same possibility cannot be ruled out if the suit without being stayed is proceeded further during the pendency of the rectification proceedings and the party which may be aggrieved by the decision in the suit carrying the matter in appeal or revision before the superior authority. No prejudice is also likely to be caused to the defendant/respondent if the suit is stayed in view of the fact that no interim injunction or any other direction is operating against it in the suit at this stage.

In the above view of the matter, therefore, I believe that the interest of justice would be better served if on the same analogy as in the case of Section 111 of the Trade and Merchandise Marks Act, 1958 we fall in line with the views expressed by the Calcutta High Court and Delhi High Court in the above two cases.

In the result, therefore, the Civil Revision Petition is allowed and the impugned order of District Judge, Ongole in I.A.No.184 of 1996 in O.S.No.1 of 1987 dated 5-2-1996 refusing to grant stay of the suit proceedings is quashed and set aside. The suit proceedings are hereby ordered and directed to be stayed till the rectification proceedings taken by the petitioner before the Copyright Board are disposed of. No costs.