India: Trial Court Decision Held "Not In Accordance With Law"- High Court Of Karnataka

In Shri Lakshmi Venkataramana and T. Varada Raj Pai (Respondent/Plaintiff) v. P.Kiran Kumar (Petitioners/Defendants), the Respondent/Plaintiff filed a suit against the Petitioner/Defendants for a decree against the latter and persons claiming under them from passing off malt powder in the market under the names "SRI RAGHAVENDRA MALT" and "SRI RAGHAVENDRA BADAMI FEAST" or any other mark deceptively similar to the marks being used by the former.

In addition, the Respondent/Plaintiff had also filed an interim application for an order of temporary injunction in order to restrain the Petitioner/Defendants in the similar manner as sought for in the main prayer. However, the Trial Court had found the said application and also the following appeal devoid of merit and had thus rejected both respectively.

The Petitioner/Defendants on their part had filed an Interim Application (I.A.) No.4 under Section 124 of the Trademarks Act, 1991 read with Section 94(e) and 151 of the Code of Civil Procedure (CPC) to stay further proceedings of the suit till the disposal of the application filed by them under Section 125 of the Trademarks Act before the Intellectual Property Appellate Board (IPAB) at Chennai, for removal of the Respondent/Plaintiff registered trademark. It was argued by the Respondent/Plaintiff that the Petitioner/Defendants had not satisfied the mandatory requirements of Section 124 of the Act so as to entitle them to an order of stay of proceedings of the suit and further that the application was hit by inordinate delay, negligence, laches, acquiescence, waiver and estoppel and still further that the application was intended to frustrate and defeat the direction issued in the interim application filed by the Respondent/Plaintiff previously.

The Trial Court had rejected the I.A. No. 4 stating that as per Section 124(1)(b), the Defendant should have raised a defence under Clause (e) of Sub-section (2) of Section 30 and pleaded the invalidity of registration of the trademark, however, there was no such plea taken. Aggrieved, as such by this order of the trial Court, the Petitioner/Defendants filed a writ petition before the High Court of Karnataka.

The Petitioner/Defendants contended that since they had filed an application under Section 125 of the Act before the Board for removal of the Respondent/Plaintiff's trademark and the same was pending enquiry before the Board and in view of such pendency, the proceedings in the suit could not continue and was thus required to be stayed in exercise of the power under Section 124 of the Act. It was further contented that the Trial Court had ignored and rejected the I.A. No.4 irrationally and illegally.

It was contended on behalf of the Respondent/Plaintiff, that the Petitioner/Defendants had not taken specific defence under Clause (e) of Sub-section (2) of Section 30 of the Act and that they had not specifically pleaded the invalidity of registration of the trademark. They also stated that the Trial Court had considered the I.A. No.4 from the correct perspective and the impugned order was completely justified.

The High Court of Karnataka opined that the question that needed to be considered in the present case was : "Whether the trial court is justified in refusing to stay the proceedings of the suit and in rejecting I.A. No.4.?" The Court noted that the case of the Petitioner/Defendants was that the Trial Court had not considered their application with reference to the provision contained under Section 124(1)(a). The provisions under Clause (a) and (b) of Sub-Section (1) of Section 124 of the Act are independent since the word used is "or" and the case was required to be examined with reference to both the provisions.

It was thus held that since the Trial Court had not considered the case of the Petitioner/Defendants in accordance with law, the impugned order was irrational. Therefore, the writ petition was allowed, and the Trial Court was directed to re-consider the I.A. No.4 keeping in mind the aforesaid observations and in accordance with law.

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