H.R. Sodhi, J. - (1.) THIS appeal arises out of an action for passing off instituted by the Plaintiff -Respondents against the Appellants to res strain the latter from using the trade mark "Delco". The suit was decreed by the District Judge, Ludhiana, and a perpetual injunction issued against the Appellants restraining them from using the word "Delco" on pedal axles for push cycles of any other goods of their manufacture. A sum of Rs. 500 was awarded to the Respondents as nominal damages for the alleged user of their trade mark by the Appellants.
(2.) THE Respondents are General Motors Corporation incorporated in the United States of America with their registered head office at West Grand Boulevard and Cass Avenue Detriot. It is claimed by them that they have been carrying on business on a large scale throughout the World, including India, in the manufacture and sale of automobile goods inter alia motor cars, locomotives, diesel engines, electric motors, airplane engines, refrigerating and heating equipment, household appliances and accessories thereof, and that till the year 1957, they also carried on business in coaster brakes and hubs for bicycles. It is alleged that they acquired world -wide reputation for superior quality of their goods under the trade mark "Delco". Trade mark "Delco" was got registered by them in India as well in the year 1962, under trademarks Nos. 129625, 129627, 129628, 129626 and 121848 for various classes of goods as specified in the registration certificates Exhibits P. 3, P. 4, P. 5, P. 6 and P. 7. The registration certificate, Exhibit P. 6, covers pedals for land vehicles and springs. Admittedly, the Respondents do not hold any trade mark for pedal axles for push bicycles. The Defendant -Appellants started in Ludhiana, Punjab, the Manufacture of bicycle axles and in the year 1956, they applied for registration of the trade mark "Delco" in respect of bicycle accessories and parts thereof, including pedal axles. The business name under which the Appellants are working is "Delco Engineering Works" and Shri Kehar Singh is stated to be the sole proprietor of this concern. The averments of the Appellants are that they commenced the use of the trade mark "Delco" for their cycle axles actually in the year 1952 and to the same effect was their statement before the Registrar of Trade Marks. The Registrar pointed out to them that the word "Delco" as proposed to be Used by them came in conflict with certain other trademarks including that owned by the General Motors Corporation, Respondents. The Appellants explained to him that "Delco" registered mark 129626 (Exhibit P. 6) is registered for vehicle brakes, vehicle springs, pedals for land Vehicles, etc., but they wanted to use such trade mark only for the parts and fittings for cycles which was a separate class and not covered by the registration certificates of the Respondents. The Respondents raised objections before the Registrar about the registration of their trade mark in the name of the Appellants but the same were not disposed of on merits as they were held to have not been filed within the prescribed time. The Registrar refused to invoke his discretion in their favour in the matter of extension of time and rejected the application in reply to notice of opposition on 30th January, 1959. The registration was ultimately allowed in favour of the Appellants and they thus became proprietors of the trade mark "Delco" intended to be used for pedal axles for push bicycles. A notice, dated 20th September, 1958, Exhibit P. 1, was sent by the Respondents to the Appellants per registered post acknowledgement due that the products manufactured by them (Appellants) under their trade name "Delco" resembled the goods produced by the Respondents and were likely to deceive or cause confusion in the course of trade and that the Appellants were doing so solely with a view to pass off their goods as those of the Respondents. The Appellants were asked to withdraw their application for registration and stop the manufacture of any goods under the trade name "Delco". The Appellants were further warned that if they did not desist from pursuing their illegal activities in the matter of use of "Delco" trade mark, suitable legal proceedings to protect the rights and interests of the Respondents would be taken against them. It appears that after the aforesaid notice negotiations started between the parties and it is a common ground that Shri Kehar Singh, proprietor of the Appellant firm, went to Bombay on 15th June, 1961, to discuss the terms of the settlement. No amicable settlement was arrived at and the Appellants continued the manufacture of bicycles axles under the trade mark "Delco".
(3.) THE Plaintiff -Respondents then instituted the present suit in December, 1962. The Defendants got their trade mark renewed for a further period of seven years from 16th January, 1963, on payment of necessary fees. The suit was resisted on various grounds and some preliminary objections were taken. It was pleaded in defence that the Plaintiffs were estopped from filing the suit because of their acquiescence in the user of "Delco" trade mark by the Defendants and that the suit was barred by limitation. It was claimed that the goods of the Defendants were entirely of different description and the trade, counter and class of purchasers were also different, that the Defendants were proprietors of the trade mark "Delco" so far as it related to the manufacture and sale of pedal axles for push bicycles and that the Plaintiffs had no cause of action. It was further averred that the Defendants had been doing business under the trade name of "Delco Engineering Works" and using the trade mark "Delco" almost since the year 1952 and that the user of the trade mark was quite honest and in the usual course of their business. The explanation in the written statement which was reiterated by Kehar Singh appearing as D.W. 10, is that in the word "Delco" as used by his firm. 'D' stood for durability, 'E' for efficiency, 'L' for long life, 'C' for competitive rate, and 'O' for observable. The public, according to the Defendants, knew, who were the manufacturers of cycle axles and the allegations of fraud and possibility of deception were described as baseless. The parties went to trial on the following issues arising out of their pleadings: (1) Is the Defendant selling goods so marked as to be designed or calculated to lead purchasers to believe that they are the Plaintiffs' goods? (2) Is the Plaintiff entitled to the injunction prayed for ? (3) To what amount the damages, if any, is the Plaintiff entitled ? (4) Is the suit not within time ? (5) Whether the Plaintiff has not a title and locus standi to sue? (6) What is the effect, if any, of the registration under Section 12(3) of the Trade Marks Act of 1958 of the mark DELCO of the Defendant ? (7) Relief. Issue No. 5, as stated above, was subsequently recast at the instance of the parties and the amended issue stood as under: Whether the Plaintiff Company is estopped from bringing this suit or have they acquiesced in the use of the word "Delco" by the Defendants, and if so, what is its effect?;