Network Solutions, LLC vs Network Solutions Pvt. Ltd.

Reva Khetrapal, J.—The defendant seeks to amend its written statement in the present action filed by the plaintiff for injunction and damages for passing off and unfair competition.

The defendant alleges that it came to know about the plaintiff''s trademark application bearing registration No. 1252814 (NETWORK SOLUTIONS) through their erstwhile attorneys, M/s. Khaitan & Co., Mumbai in the month of July, 2005, whereupon instructions were issued to the said erstwhile attorneys by the defendant to file an opposition to the said application. The defendant had reason to believe that the said opposition had been filed. Thereafter, the files pertaining to the trademarks of the defendant were transferred to their previous attorney, namely, Anand & Anand. The instant suit was filed by the plaintiff in August, 2007. Based on the assumption that pursuant to the defendant''s instructions the opposition had been filed by its erstwhile attorney, an averment was made to that effect in paragraph 21 of the written statement by its Attorneys, namely, Anand & Anand, which reads as under:

The contents of paragraph 21 pertaining to the plaintiff''s trademark application in India and its advertisements are a matter of record. The defendant has opposed the said application and the plaintiff may expect to receive the official communication from the trademark office. The copy of the notice of opposition filed by the defendant before the Trademarks Registry is also filed herewith. It is, therefore, denied that the application of the plaintiff is liable to proceed to registration.

After the filing of the written statement, the files of the instant suit were transferred by the defendant from its previous attorneys, M/s. Anand & Anand to the present attorneys, M/s. Khaitan & Co., Delhi, who despite best efforts to locate a copy of the notice of opposition or the filing receipt from the previous attorneys, namely, Khaitan & Co., Mumbai and Anand & Anand, New Delhi, were unable to locate the same. Consequently, the defendant seeks to incorporate an amendment to that effect in paragraph 21 of the written statement as under:

The contents of paragraph 21 of the plaint pertaining to the plaintiff''s trademark application in India and its advertisements are a matter of record. The defendant came to know about the said application through its advertisement in Trade Marks Journal dated 30th March 2005 which was made available to the public on 3rd June 2005. The defendant instructed its erstwhile attorneys namely, Khaitan & Co. to file opposition to the said application and had reason to believe that the said opposition had been filed. Thereafter, the files pertaining to the trade marks of the defendant were transferred to the previous attorney namely, Anand & Anand, who also stated the fact of filing of the opposition based on the impression that the opposition had been filed by Khaitan & Co. However, the defendant is unable to locate the copy of any notice of opposition or the filing receipt, if any, and hence is not sure whether an opposition was actually filed by its attorneys acting in the matter previously. Nevertheless, the defendant reserves its right to seek cancellation of the registration if granted by the Registrar of Trade Marks to the plaintiff by way of cancellation petition before Intellectual Property Appellate Board. The registration, if any, granted by the Registrar of Trade Marks to the plaintiff would be in breach of the provisions of Section 9 of the Trade Marks Act as NETWORK SOLUTIONS is a highly descriptive trade mark and cannot be registered in favour of the plaintiff in the absence of it having acquired any secondary significance.

The plaintiff has filed reply to the instant application, opposing the amendment on the ground that it is palpably false to allege that "despite best efforts" the defendant is unable to locate the copy of the notice of opposition or the filing receipt from either of the previous attorneys; and submits that it was only when the plaintiff preferred an application u/s 340 of the Code of Criminal Procedure, 1973 against the defendant for lying on oath about the filing of a notice of opposition, the defendant by way of the present application has sought amendment as a cover-up for the perjury committed by it. The application, therefore, deserves to be dismissed with exemplary costs.

Mr. Hemant Singh, the learned Counsel for the defendant applicant in support of the defendant''s application for amendment has urged the following grounds.

(i) The amendment is clarificatory in nature and no prejudice will be caused to the plaintiff since the plaintiff itself has sought and has been allowed to amend the plaint. As a matter of fact, the plaintiff by amending its plaint had incorporated the plea that an application for registration of its trademark "NETWORK SOLUTIONS" was initially wrongly filed on a proposed user basis, despite instructions to file an application in which use was claimed since January 01, 1993 and use in commerce since January, 1998. This amendment was sought on the basis that the attorneys of the plaintiff had advised the plaintiff to file the said application on proposed user basis, despite the plaintiff having used the trademark world over extensively since the year 1993. The written statement having relied upon the proposed user clause in the application of the plaintiff and the alleged delay in the filing of the present suit, amendment was sought by the plaintiff even after issues had been framed in the suit and was allowed by this Court. The defendant has been directed by this Court to file its written statement to the amended plaint and would like to use this opportunity to clarify the facts pertaining to the filing of opposition.

(ii) Even otherwise, no prejudice will be caused to the plaintiff by such amendment since the effect of filing or not filing of the opposition by the defendant is totally irrelevant in a passing off action. (iii) The amendment in the plaint in respect of the most crucial aspect of use having been allowed to the plaintiff, an opportunity has to be given to the defendant to amend its pleadings and it would be unjust and unfair to refuse permission to the defendant to amend its written statement when the plaintiff has been allowed to drastically amend the plaint.

(iv) What is sought to be amended is an averment made in the written statement that an opposition was filed to the trademark application of the plaintiff, pursuant to instructions given to the erstwhile attorneys of the defendant. This is an averment and not an admission and, therefore, no question of retraction of any admission made by the defendant arises in the instant case, as is sought to be made out by the plaintiff.

Mr. C.M. Lall, the learned Counsel for the plaintiff, on the other hand, vehemently opposed the amendment on the following grounds:

(a) Merely because an amendment has been allowed in the plaint, the defendant does not get a right and certainly not an unfettered and unbridled right to file a new written statement. [ Kedar Nath Vs. Ram Parkash, ].

(b) An amended pleading cannot be at variance with or inconsistent with the original pleading.

(c) The proviso to Order VI Rule 17 of the CPC makes it abundantly clear that no application for amendment is to be allowed by the Court after the trial has commenced unless the Court comes to the conclusion that in spite of the due diligence, the party could not have raised the matter before commencement of the trial. There can be no two views about the legal position that trial commences once the issues are framed and the matter is fixed for evidence. [See the judgment of this Court in CM(M) No. 338/2007 titled David Paint Industries and Anr. v. Anandsons Trade Linders decided on 11.08.2008]. On completion of pleadings in the instant suit, issues were framed on 2nd November, 2007 and the plaintiff was given eight weeks'' time to file its affidavit in evidence by order dated 2nd November, 2007 and by subsequent orders dated 25th April, 2008 and 16th July, 2008. The plaintiff instead of filing its affidavit by way of evidence filed an application under Order VI Rule 17 CPC to amend its plaint, which amendment was allowed by this Court by its order dated 1st December, 2008.

(d) In any case, the defendant cannot be allowed to take away the false averment made in the written statement and substitute it with the correct factual position after the plaintiff has served on the defendant an application u/s 340 Cr.P.C. for committing gross perjury.

Having heard the learned Counsel for the parties, I am inclined to permit the defendant to amend its written statement, inter alia, for the following reasons:

The plaintiff has altered the entire substratum of its case by amendment of the plaint, basing its cause of action on user of the trademark "NETWORK SOLUTIONS" since the year 1993 instead of proposed user from December 02, 2003. When the plaintiff has been permitted by this Court to amend its pleading on such a crucial aspect of the case (the action being one for passing off), it would be both unjust and inequitable to reject the application of the defendant for amendment. As held by the Supreme Court in Gurdial Singh and Others Vs. Raj Kumar Aneja and Others, , when one of the parties has been permitted to amend its pleadings, an opportunity has to be given to the opposite party to amend its pleading upon his making an application under Order VI Rule 17 CPC, which would ordinarily and liberally be allowed, such amendments being in the nature of consequential amendments.

Then again, it does not lie in the mouth of the plaintiff to contend that the amendment cannot be permitted to the defendant by reason of the Civil Procedure (Amendment) Act, 2002 (Act 22 of 2002) whereby the Parliament, inter alia, inserted a proviso to Order VI Rule 17 of the Code, which reads as under:

Provided that no application for amendment shall be allowed after the trial has commenced, unless the court comes to the conclusion that in spite of due diligence, the party could not have raised the matter before the commencement of trial.

The plaintiff itself sought to alter the substratum of its case after the framing of issues and instead of filing its affidavit by way of evidence, filed an application for amendment of the plaint after almost a year of the framing of issues. The said amendment, was allowed by order dated 1st December, 2008 and almost immediately thereafter, the defendant applied for amendment of its written statement.

Further, by no stretch of imagination, it can be said that the defendant by amendment of its pleadings is seeking to resile from an admission made by it. The defendant had made an averment in the written statement to the effect that an opposition had been filed by its Attorneys to the trademark registration of the plaintiff, and is merely seeking to clarify the factual position by explaining that the said averment was made under the mistaken impression that its Attorneys had carried out its instructions and filed an opposition in accordance with its instructions. Subsequently, however, the defendant not having been able to locate the copy of the notice of opposition or the filing receipt from the previous attorneys, namely, Khaitan & Co., Mumbai or from M/s. Anand & Anand, to whom the file had been transferred by the defendant, the defendant became unsure whether any such opposition had been filed. Hence the clarificatory amendment sought to be incorporated in its written statement.

It is settled law that even a categorical admission made in a pleading, though cannot be resiled, but it may be explained or clarified. [See: Gautam Sarup Vs. Leela Jetly and Others, ] In the instant case, in my view, the defendant seeks to clarify the averment made by it, which by no stretch of imagination can be termed an admission, let alone a categorical admission. This is sought to be done by the defendant at the stage when it is required to file its written statement to the amended plaint and, therefore, is more or less in the nature of a consequential amendment. Had the defendant filed a copy of the opposition with its earlier pleadings, it would have been a different matter altogether. The assertion made by it that an opposition had been filed, in my view, can certainly be explained or clarified by the defendant by stating that though instructions had been issued to its Attorneys to file an opposition and the defendant remained under the impression that such instructions had been carried out, the Attorneys in fact did not file the opposition. [See Gautam Sarup Vs. Leela Jetly and Others, ].

In the instant case, in my considered view, the amendment sought by the defendant also satisfies the twin conditions of (a) not working injustice to the other side and (b) of being necessary for the purpose of determining the real question in controversy between the parties. As already stated, it is more or less in the nature of a consequential amendment. Upon the plaintiff amending the plaint, it seeks to set the record straight by admitting that no opposition was filed to the trademark registration of the plaintiff and the assertion made by the defendant in the written statement filed by it was under the erroneous impression that its Attorneys had, acting on its instructions, filed the opposition. Far from improving the case of the defendant, the amendment sought to be made by the defendant improves the case of the plaintiff to show that no opposition was filed by the defendant to its trademark registration at the relevant point of time.

It may be noted also that there is no question of an amendment of the aforesaid nature causing any serious injustice or any irreparable loss to the plaintiff. On the contrary, as stated above, it fortifies the case of the plaintiff and weakens the defence of the defendant. To what extent this is so, will depend upon subsequent examination and careful scrutiny of the evidence led by the parties at the appropriate stage. Suffice it to say at this stage that the amendment deserves to be allowed taking an overall view of the subject matter of the suit, the explanation given by the defendant and as no prejudice to the plaintiff will be caused.

The application is accordingly allowed. The defendant is directed to file its amended written statement within four weeks in consonance with the judgment of the Supreme Court in the case of Gurdial Singh (supra) by incorporating the changes in a different ink or by highlighting the same with the use of a highlighter or by underlining in red the changes made. The application stands disposed of accordingly.

CS(OS) 1444/2007

List the case before the Joint Registrar for further proceedings on 7th September, 2009.