Suit for passing off can continue even when suit for infringement of trade mark is stayed u/s 124 of Trade Marks Act: Delhi HC

Read Judgement: PARVEEN KUMAR GUPTA vs. RAVI CHADHA & ORS.

Pankaj Bajpai

New Delhi, August 17, 2021: The Delhi High Court has ruled that a suit for passing off can continue even when suit for infringement of trade mark is stayed under section 124 of the Trade Marks Act. 

While allowing the petition, the Single Bench of Justice Asha Menon modified the order passed by the Trial Court to read that the Civil Suit No. 577/2016 would remain stayed u/s 124 of the Trade Marks Act qua the action for infringement of trade mark, but shall continue qua the relief sought against passing off and connected reliefs. 

The petitioner was aggrieved on account of the fact that his suit, which he had filed against the defendants for infringement of his proprietary trade mark “RACER” as also passing off their goods as that of the petitioner and other reliefs. 

Later, the petitioner was allowed to withdraw the petition, after which he filed a Review Petition. But, the Trial Court was of the view that the application for review had been filed beyond the period of limitation. 

As a result, the petitioner filed an application for condonation of delay on the ground that time had been spent before the High Court in pursuing the CM (M) petition. 

However, the Trial Court rejected the application under section 5 of the Limitation Act and observed that since the High Court while disposing of the CM (M), had not commented on limitation, no ground for condonation of delay was made out.  

Justice Menon noted that while a suit for infringement could be stayed u/s 124 of the Trade Marks Act, the suit for passing off could continue. 

The settled law is thus that Section 124 of the Trade Marks Act does not provide for stay of action against passing off and was applicable only where a rectification application/cancellation has been sought against the registered trade mark that a plaintiff claims to be exclusively its own. This was intended to avoid conflicting decisions by the Civil Courts and the Tribunal, added Justice Menon. 

The High Court opined that is only when clever drafting discloses the intent of the plaintiff to get over the statutory bar, being aware of the rectification proceedings commenced against the trade mark that it claims is exclusively its own, as observed in Formica International Ltd vs. Caprihans (India) Pvt Ltd [AIR 1966 Cal 247], that the entire suit would have to be stayed till the rectification proceedings are completed. 

Finding that only after the institution of the suit, the defendants/respondents have filed an application for rectification, Justice Menon said that there was an error apparent on the face of the order. 

Therefore, Justice Menon concluded that the Trial Court ought not to have directed that the entire suit be stayed. 

However, the Court made it clear that while the suit for infringement of trade mark has to be stayed u/s 124 of the Trade Marks Act, when a rectification petition was filed before the IPRB, an action for passing off could continue.