Laxmikant V. Patel Vs. Chetanbhai Shah and Anr.

Laxmikant V. Patel Vs. Chetanbhai Shah and Anr.

2002 (24) PTC 1 (SC)

Appellant had a business of Colour lab and studio since 1982 in the name of ‘Muktajivan’ Colour Lab and Studio. In order to expand, Appellant promoted his wife and brother-in-law to open a new colour lab in the name and style of ‘Muktajivan’ Colour Studio at two other localities in Ahmedabad. In 1997, Appellant filed a suit for passing off against the Respondents. The Respondents, who were earlier carrying on similar business in the name of ‘Gokul Studio’, sometime before or after institution of the suit for passing off by the Appellant, adopted the name and style of ‘Muktajivan’ Colour Lab and Studio. Respondents argued that Appellant was earlier carrying on business in the name of ‘M.J.’ and it was in the year 1995 that Appellant substituted ‘Muktajivan’ in place of ‘M.J.’ Respondents also argued that the locality where the Respondents had started their business was away from the area where the Appellant was carrying on his business.

District Court’s Observations:

• Appellant carries his business in the trade name ‘Muktajivan’ Colour Lab at least since 1995.

• Respondents had recently adopted the word ‘Muktajivan’ in his business name had so done on or about the date of the institution of the suit.

• Respondents’ studio’s name was ‘somewhat identical’ with the trade name of the Appellant.

Decision:

Injunction was refused on the ground that the business of the Respondents was in the other part of the city of Ahmedabad, at a distance of about 4 to 5 kms.

High Court’s Observations in Appeal by the Appellant:

• Respondents’ business had already come into existence on the date of the institution of the suit and therefore they could not be restrained by issuance of injunction.

• No pleadings suggested that the other two businesses using ‘Muktajivan’ as part of their trade names were so using the name under the authority and licence of the Appellant . Therefore Appellant was not entitled to grant of an injunction restraining only the Respondents.

Decision:

The appeal was dismissed.

Appellant filed an appeal before the Supreme Court of India. Supreme Court ruled on the basis of finding arrived at by the Trial Court that Appellant has been doing his business under the impugned name at least since 1995.

Supreme Court’s Observation:

On the law of Passing off:

• An action for passing-off will lie wherever the defendant company’s name, or its intended name, is calculated to deceive, and so to divert business from the plaintiff, or to occasion confusion between the two businesses.

• Where there is probability of confusion in business, an injunction will be granted even though the defendants adopted the name innocently.

• With the lapse of time such business or services associated with a person acquire a reputation or goodwill which becomes a property which is protected by courts.

• The law does not permit any one to carry on his business in such a way as would persuade the customers or clients in believing that he goods or services belonging to someone else are his or are associated therewith. It does not matter whether the latter person does so fraudulently or otherwise.

• The three elements of passing off action are the reputation of goods, possibility of deception and likelihood of damages to the plaintiff. In our opinion, the same principle, which applies to trade mark, is applicable to trade name.

• Plaintiff does not have to prove actual damage in order to succeed in an action for passing off. Likelihood of damage is sufficient.

• Once a case of passing off is made out the practice is generally to grant a prompt ex-parte injunction followed by appointment of local Commissioner, if necessary.

On merits/facts of the Case:

Appellant is expanding his business through his wife and brother-in-law. On or about the date of the institution of the suit the Respondents were about to commence or had just commenced an identical business by adopting word ‘Muktajivan’ as a part of his business name although till then his business was being run in the name and style of Gokul Studio. The intention of the Respondents to make use of business name of the Appellant is apparent.

In a city a difference of 4 or 5 kms. does not matter much.

It is the word ‘Muktajivan’ the employment of which makes distinctive the business name of the Appellant and it is the continued use of `Muktajivan’ which has created a property therein linked with the Appellant.

The Appeal was allowed.