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2015 SCC OnLine Del 13576 : (2016) 65 PTC 69 (DB)
In the High Court of Delhi
(BEFORE S. RAVINDRA BHAT AND DEEPA SHARMA, JJ.)
Colgate Palmolive Company and Anr. .…. Appellants
Sh. Pravin Anand, Advocate.
Versus
Anchor Health and Beauty Care Pvt. Ltd. .….
Respondent
Sh. Sudeep Chatterjee and Sh. Karan Bajaj, Advocates.
FAO (OS) 131/2012
Decided on November 19, 2015
S. RAVINDRA BHAT, J.:— This is a defendant's appeal, directed
against the order dated 14.02.2012 of the learned Single Judge
allowing the plaintiff's (which is hereafter called “Anchor”) application
I.A. 21176/2011 for amendment of plaint under Order VI Rule 17 of the
Code of Civil Procedure, 1908 (CPC).
2. Anchor, in its suit (filed on 01.09.2007) claimed that it was using
the trade mark and logo “ANCHOR”, in a red and white color
combination. It launched a tooth paste “Anchor White - Allround
Protection” in 2005. In August, 2007, the defendant/appellant
(hereafter “Colgate”) introduced its new “Strong Teeth” carton using
the phrase, “All-Around Decay Protection”; Anchor complained that
Colgate copied its (Anchor's) distinctive features of packaging. Anchor
also alleged that in the new coloured “Strong Teeth” carton, use of the
tooth device with bubbles around it is similar to the tooth device used
by it in its “White-Allround Protection”. Anchor further alleged that
Colgate was interfering with its business unlawfully and had instituted
several suits against it and were also threatening its dealers. Anchor
sought an injunction restraining Colgate from interfering with its
legitimate business and imitating or copying features of its range of
products including the term “Allround Protection” and Tooth Device in
their Colgate “Strong Teeth” Carton.
3. During pendency of this suit, the mark “ALLROUND” was
registered in the name of Anchor, on 26.08.2008. At the time of filing,
the suit was initially titled as a suit for declaration and permanent
injunction restraining tortious acts of unlawful interference. Anchor
sought to amend the suit headings from one for “unlawful interference”
in its “business, acts of unfair competition, economic duress and
causing loss..” to one where the proposed heading was “Suit for
declaration and permanent injunction restraining infringement of
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registered trade mark/passing off, tortious acts of unlawful interference
in the plaintiff's business, acts of unfair competition, economic
duressand causing loss …”
4. Other amendments in the body of the suit, [introduction of new
paras 6(A), 6(B), 6(C) & 12(A)] included the averment that Anchor had
sought registration of the trademark ALLROUND on 02.09.2005 which
was granted on 26.08.2008 during pendency of the suit. Para 12A
urged as follows:
“12A. The use of the term ALL AROUND DECAY PROTECTION is a
complete imitation of the plaintiff's mark ALLROUND which is a
registered trade mark. The use of the same with respect to the
identical products constitutes infringement of registered mark and
passing off as also dilution of the said mark. The products being
competing products, the defendant claiming to be the leading
manufacturer of tooth paste, there was no justification in adopting
an identical expression which is associated with the plaintiff. The
defendant's use is clearly subsequent, deliberate, conscious and
illegal in nature. The entire purpose has been to ride piggyback upon
the enormous reputation which the ANCHOR tooth paste has earned
due to the extensive advertising on the electronic media and
otherwise. The use of the term ALL AROUND DECAY PROTECTION
which encompasses within it the entire mark of the plaintiff
ALLROUND is clearly infringement of the registered trade mark,
constitutes passing off, acts of unfair competition and dilution.”
5. Anchor further sought leave to amend the relief/prayer clause by
inserting the claim for permanent injunction restraining infringement.
[“… permanent injunction be passed restraining the defendants…..from
using the term ALL AROUND DECAY PROTECTION or any other features
on the plaintiff's carton which violate the plaintiff's statutory and
common law rights thereby resulting in infringement, passing off,
dilution etc.”].
6. Colgate opposed the application for leave to amend, urging that
the fundamental structure and cause of action was sought to be altered
by making the proposed amendment, converting the plaint in a non-
confusion suit into a “confusion” based cause of action. Colgate alleged
that the limitation for filing a suit for infringement of trade mark
expired in 2010 and, therefore, the proposed amendment, would result
in irreparable injury to it. Colgate also alleged that it had filed
rectification proceedings, immediately on coming to know of the
registration favouring Anchor. The further objection was despite the
registration in its favour being granted on 26.08.2008.
7. The learned Single Judge was of the opinion that since the law of
amendment of pleadings is “rather liberal in nature” the amendments
should ordinarily be allowed, “unless it is likely to prejudice the
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opposite party or is likely to take away a vested right which has accrued
to the opposite party provided the opposite party can be compensated
in terms of cost. Errors or mistakes, if not fraudulent, should not be
made a ground for rejecting the application for amendment of plaint or
Written Statement.” It was further observed that amendments aimed
at avoiding multiplicity of proceedings should generally be allowed. The
impugned judgment relied on Suraj Prakash v. Raj Rani Bhasin (1981)
3 SCC 652; L.J. Leach & Co. Ltd. v. Jardine Skinner & Co. AIR 1957 SC
357 and Laxmidas Dayabhai Kabarwala v. Nanabhai Chunilal Kabarwala
AIR 1964 SC 11. The learned Single Judge held that the objection as to
the suit being time-barred was without substance as it could be said
that the suit was based on a continuing cause of action. The learned
Single Judge also overruled the argument that the amendment
permitted alteration of the suit from one kind to another.
8. Colgate's counsel argues that the learned Single Judge fell into
error in holding that since the law relating to amendment of pleadings
is liberal, the amendment sought by Anchor in this case could be
allowed. Emphasizing that though provisions of Order VI, Rule 17 CPC,
enabled amendment of a suit any time before the issues are settled,
learned counsel highlighted that nevertheless the courts had prescribed
well-recognized limitations on this seemingly wide power of permitting
amendments of pleadings. It was argued in this context that the
limiting factor which ought to have alerted the court to reject the
amendment sought, was the circumstance that the essential defensive
nature of the suit would be changed altogether-the suit was initially a
trade dress violation and a passing off action, meant to be defensive in
nature (given that Colgate had filed no less than 3 other suits before
Anchor filed its present suit), but would now become an offensive
infringement suit. Highlighting that an infringement suit is based upon
violation of statute, counsel urged that when the suit was filed by
Anchor in 2007, it never disclosed firstly that it had claimed registration
for the expression “All-around”. Rather it premised its suit claim on the
basis that the overall get up and description of the product made by or
claimed by Colgate was similar to its own. It was secondly submitted
that even after registration was granted in August 2008, i.e. one year
after the filing of the suit and nearly one year after the filing of the
written statement, the Plaintiff, Anchor made no attempt to seek
amendment. It willfully allowed the matter to proceed further in the
existing frame of the suit and chose to approach the Court much later
in 2011 after a lapse of 3 years. By this time the respective positions of
the parties were well known. Not only was the suit sought to be altered
later, but the effect of the amendment was allegations of infringement
which could relate back to the date of filing of the suit, i.e. even before
registration had been granted. Clearly, this was untenable.
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9. Mr. Anand, counsel for Colgate, relied on the observations of the
Supreme Court in the judgments reported as A.K. Gupta & Sons v.
Damodar Valley Corporation AIR 1967 SC 96; Revajeetu Builders &
Developers v. Narayanaswamy & Sons (2009) 10 SCC 84 to urge that
the general rule is that a party is not allowed by amendment to set up
a new case or a new cause of action particularly when a new suit on the
new case or cause of action is barred. Learned counsel attacked the
observations in the impugned judgment to the effect that the use of
the phrase “All-Around Decay Protection” and “Strong Teeth” carton by
it had been pleaded while filing this suit and consequently, that it was
difficult to say that by alleging infringement based on the trade mark
registration granted to Anchor during pendency of the suit, an
altogether new cause of action was sought to be pleaded or the existing
cause of action was sought to be substituted by a new cause of action.
10. Mr. Sudeep Chatterjee, learned counsel for the plaintiff, Anchor
argued that there is a fallacy in the appellant's argument. It was
contended that the amendments sought and granted could not possibly
be said to have caused prejudice to Colgate. Counsel urged that the
basic facts relating to confusion based on passing off were not
undermined by the amendment; the defendant Colgate precisely knew
all the essential facts. It was submitted that in the present case, there
was no fundamental change in the nature of the suit or the cause of
action and in any case a fresh suit based on infringement could have
been filed that would not have been barred by limitation. Counsel
highlighted that trial was yet to commence; the suit was at an initial
stage since the issues were framed and, there was no likelihood of any
injustice or prejudice being caused to the defendants. On the other
hand, if the proposed amendment is not allowed, it is likely to result in
multiplicity of litigation on account of the plaintiff being compelled to
file a fresh suit on the basis of infringement of its registered trade
mark.
11. It is argued that even the original suit is premised upon the use
of the term “Allround” which is the registered trade mark of Anchor.
The registration took place during pendency of this suit. Therefore, the
fundamental ground on which the suit is based continues to be the
same even if the proposed amendment is allowed. The appellant
Colgate, according to counsel, is not correct that Anchor adds a new
cause of action, by way of the proposed amendment. What is
introduced is only an additional ground, to challenge the use of the
impugned mark/expression by Colgate. Counsel relied on the Supreme
Court judgment in North Eastern Railway v. Bhagwan Das AIR 2008 SC
2139.
Analysis and conclusions
12. In the original suit as framed - Anchor's emphasis was on the
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use of the term “All round protection”, which described its own
toothpaste. Anchor mentioned about its main - established business in
an unrelated field and then stated that it started its foray in the
toothpaste business. Its main complaint can be gleaned from the
following averments in the original suit:
“In order to ensure that the defendants do not start claiming
exclusive rights on the term ‘All Round Protection” and the “Tooth
device” appearing on the plaintiffs carton, the present suit is being
filed to place on record the conduct of the defendants which are
using all possible methods to curb healthy competition from the
plaintiff. The term “All Round Protection” is associated with the
plaintiff's product and the defendants are not entitled to use the
same. The conduct of the defendants’ constitutes tortious acts of
interference in the legitimate business of the plaintiff, It also results
into inducement of breach of contract between dealers, suppliers,
raw material sources with the plaintiff. The defendants are indulging
in conspiracy with a view to damage and harm the plaintiff's
business by unlawful means. The defendants’ acts and have cause
economic duress resulted into harassment to the plaintiff for which
the plaintiff is entitled to recover actual and punitive damages in
view of the complete misinformation against the plaintiff with the
dealers, spread by the defendant distributors and market. The
defendants adopt complete incorrect methods compete with the
plaintiff and have caused huge damage to the plaintiff.”
13. The curious feature of the present case is that for over four
years, the suit was pending; even the ad interim injunction application
was not decided. That application IA 9787/2007 was heard on several
dates : 15.11.2011; 17.11.2011; 22.11.2011;23.11.2011;
29/30.11.2011; 01.12.2011; 02.11.2011; 05.12.2011; 08.11.2011;
13.11.2011; and 14.12.2011. On the said last date, i.e. 14th December,
2011, the learned Single Judge recorded as follows, in the order:
“Part-heard.
nd
List for remaining arguments on 2 January, 2012.
The learned counsel for the plaintiff states that he would like to
amend the plaint so as to incorporate the plea that the ‘ALL ROUND’
being registered trademark of the plaintiff, vide registration no.
1381760 granted on 26.8.2008 w.e.f. 02.9.2005, the defendants are
also infringing the aforesaid registered trademark of the plaintiff. The
proposed application qua amendment be filed within two days, as is
undertaken by learned counsel for the plaintiff. Reply to the
application can be filed within one week on getting a copy of the
application.”
14. Thus, Anchor itself consciously did not seek to amend the suit,
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till December, 2011-i.e. more than four years after the filing of the suit,
and over 3 years and 2 months after securing trade mark registration.
15. In Revajeetu Builders & Developers (supra), the Court revisited
authorities on amendment of pleadings, and restated the basic
principles which govern applications for amendment of plaint. Those
principles, as spelt out, are : -
“On critically analyzing both the English and Indian cases, some
basic principles emerge which ought to be taken into consideration
while allowing or rejecting the application for amendment.
(1) Whether the amendment sought is imperative for proper and
effective adjudication of the case?
(2) Whether the application for amendment is bona fide or mala
fide?
(3) The amendment should not cause such prejudice to the other
side which cannot be compensated adequately in terms of
money;
(4) Refusing amendment would in fact lead to injustice or lead to
multiple litigation;
(5) Whether the proposed amendment constitutionally or
fundamentally changes the nature and character of the case?
and
(6) As a general rule, the court should decline amendments if a
fresh suit on the amended claims would be barred by limitation
on the date of application.”
16. The learned Single Judge in the present case felt that the
fundamental ground on which the suit is based would remain the same
even if the proposed amendment is allowed-because both were
premised on Colgate's use of the term “All round”. This court is of the
opinion that this was a rather simplistic approach to the matter. The
suit as framed complained that Colgate's description of the product was
a problem, but not as a trademark. In other words, the complaint was
that Colgate's highlighting that its toothpaste helped in All around
decay protection trenched upon some vague undefined right that the
plaintiff had in relation to the expression “Allround” protection. When
the suit was filed, Anchor itself was facing several suits-preferred by
Colgate. Anchor's action was curious - it did not say that Colgate
passed off Anchor's products as their own but only that the description
by which Colgate advertised its products was problematic for Anchor.
Anchor significantly did not state a word about its pending claim for
registration made in 2005 of the term “Allround” (the tenability of
which we shall desist from commenting upon). Nor did it bring up ever
in any pleading or document, for long after the registration was granted
on 26.08.2008. It only disclosed the fact of registration during the
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hearing of the interim injunction application before the Court.
17. Where the learned Single Judge went wrong, in our opinion, was
in assuming that since the cause of action or controversy involved
remained in respect of use of the term “Allround”- which remained
unchanged, no prejudice could be caused. But there is a world of
difference between a claim to trade dress protection-not even passing
off-where the defendant is alleged to be using certain words that can
potentially be common to the trade, and an infringement action. The
latter is based on a statutory right. If the plaintiff proves the essential
prerequisites, i.e. deceptive similarity, infringement is presumed
(Section 29(3) of the Trademarks Act). Furthermore, infringement is
also an offence punishable with fine or even a prison term. Here the
plaintiff Anchor's amended suit claims infringement right from the time
of the application-i.e. 2005, entirely based on the registration granted
in 2008. By not seeking leave at the earliest point in time, and
choosing to remain silent, the plaintiff Anchor in fact allowed the time
prescribed for claiming injunction - in respect of the period between
2008 and 2011 to lapse. The learned Single Judge's assumption that
infringement is a continuing cause of action in this context is entirely
inaccurate. An infringement action was well within the reasonable
contemplation of the plaintiff, which deliberately slept over its rights
and woke up after the normal time prescribed for infringement action
ended. Furthermore, Anchor did not claim only permanent injunction in
the suit (as originally framed) it even sought a hefty amount in
damages (Rs. 5 crores).
18. In the Northern Railways case (supra) the Supreme Court held
that:
“Insofar as the principles which govern the question of granting or
disallowing amendments under Order 6 Rule 17 C.P.C. (as it stood at
the relevant time) are concerned, these are also well settled. Order 6
Rule 17 C.P.C. postulates amendment of pleadings at any stage of
the proceedings. In Pirgonda Hongonda Patil v. Kalgonda Shidgonda
Patil which still holds the field, it was held that all amendments
ought to be allowed which satisfy the two conditions : (a) of not
working injustice to the other side, and (b) of being necessary for
the purpose of determining the real questions in controversy
between the parties. Amendments should be refused only where the
other party cannot be placed in the same position as if the pleading
had been originally correct, but the amendment would cause him an
injury which could not be compensated in costs. (Also see: Gajanan
Jaikishan Joshi v. Prabhakar Mohanlal Kalwar)”
19. This court is of the opinion that the learned Single Judge, for the
foregoing reasons, fell into error in holding that no prejudice was
caused by the amendment to Colgate's defense; it was so prejudiced
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by the alteration of the nature of the suit to one of infringement, which
is fundamentally and radically different from the original cause of action
on which Anchor's suit was premised.
20. The appeal is entitled to succeed; the amendments permitted to
the plaint by the learned Single Judge shall not be part of the record;
the consequential amendments to the written statement too compelled
because of the impugned order, shall not be part of the record. The
impugned judgment and order is set aside. The plaintiff-Anchor's
application for amendment shall stand dismissed. In the circumstances,
costs quantified at Rs. 75,000/- shall be paid by the plaintiff (Anchor)
to the defendant/Appellant (Colgate), within four weeks. Parties shall
be present before the learned Single Judge on the next date fixed in
th
the suit, i.e. 16 December, 2015. The appeal FAO (OS) 131/2012 is
allowed in the above terms.
———
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