P L D 1962 (W (PLP)

This is an application under section 151, C. P. C. for the stay of proceedings in this suit pending the decision of the defendant's application filed before the Registrar of Trade Marks, Karachi, under section 10 (2) of the Trade Marks Act, 1940. Similar appli cations have also been made in the three connected suits namely Suits Nos. 131 of 1961, 157 of 1961 and 158 of 1961, all of which have been ordered to be heard together with this suit. This order will dispose of the application in this suit as well as the three similar applications in the connected suits.

2. The plaintiffs in this suit have prayed for an injunction to restrain the defendants from infringing the plaintiffs' registered trade marks bearing various numbers and for other Incidental reliefs. It Is the case of the plaintiffs that the plaintiff No. 1 together with five other companies and Messrs K. M. Basheer and K. M. Muneer promoted the defendants' company for manufac turing In Pakistan electric lamps of various sizes. Of these five companies four are described as European Companies and the fifth is Messrs Hyesons Electric Company Ltd., the whole of the issued share capital of which is held by Messrs Muneer and Basheer mentioned above. In the defendants company which was so promoted, the aforesaid two gentlemen held seventy percent share and the remaining thirty percent were held by the aforesaid European Companies. Two agreements were reached, one described as the "Main Agreement" and the other as the "Working Agreement". Clause 13 of the "Working Agreement" provided that no products of the defendant's company shall be sold by it except to or through the parties to the said agreement. It is further alleged that since its incorporation, the defendant company has been manufacturing electric lamps for the said Pro motor Companies and/or their Distributing Companies and on the instructions of the plaintiffs the electric lamps manufactured by the defendant company bear names/brands/labels and/or trade marks of the plaintiffs; that differences between the European Companies on the one side and the said Messrs K. M. Basheer and K. M. Muneer on the other arose in connection with the running of the defendant company so that at the instance of these two gentlemen who hold between them 70 per cent. shares of the defendant company a resolution was passed by the Board of Direc tors at its meeting dated 20th February 1961, resolving that in future the defendant company will directly market and sell all the electric lamps manufactured by it. The European Companies voted against this resolution. After the passing of the said resolution the plaintiffs requested the defendant company to confirm that they would not manufacture or sell electric lamps bearing their regis tered trade marks, names, brands and labels. This confirmation was refused by the defendant and it expressed its intention of infringing the trade marks etc. On these allegations the plaintiffs have prayed for permanent injunction and other incidental reliefs. For the purposes of the present application we are only concerned with the question of the use of the trade marks by the defendant company. On this question they have resisted the plaintiff's claim on the ground that the plaintiffs have abandoned the marks and that these marks have lost their distinctive character ; that the defendant is an honest and concurrent user of the said trade marks within the meaning of section 10 (2) of the Trade Marks Act and lastly that the plaintiffs have acquiesced in this user since 1953.

3. This suit was instituted on the 25th of August 1961 and alongwith the plaint was presented an application for a temporary injunction. A notice was issued to the defendant on this applica tion and the matter came up before the Court on 4th September 1961. On that day a consent order was passed whereby the hear ing of the application was adjourned to 25th September 1961, and In the meantime, the defendant undertook not to manufacture, offer or sell any goods bearing plaintiffs' trade marks, brands, or labels or otherwise infringe the same without a written authority from the plaintiffs. This undertaking was to subsist until the decision of the application for the grant of a temporary injunc tion. The matter then came up again before the Court on 25th September 1961. On that day it was observed by the Court that this suit would be decided mostly on documentary evidence and It was agreed by the counsel of the parties that it would be possible to proceed with the hearing of this suit in, about two weeks' time. The learned counsel for the defendant, however, asked to be freed of the undertaking which had been given on behalf of the defend ant on the 4th of September. Time was given to enable the counsel for the plaintiffs to take instructions from his clients for the relaxing of the terms of the undertaking but when the matter came up before the Court on 28th September 1961, Mr. Nurul Arfin the learned Advocate of the plaintiffs stated that instructions from his clients had not been received. The matter then came up on the 2nd of October 1961 and on that day by consent it was agreed that the defendant will file a written statement on a certain date and the matter would come up for the framing of issues on 9th October 1961. It was further ordered by consent that this suit should come up for hearing on 18th October 1961 and shall be placed as No. 1 on the list. In the meantime, the other three suits had been filed and all these were to be tried together with this suit.

4. Consent issues in all the four suits having been filed the matter came up on 18th October 1961 for hearing but it could not be reached for want of time. The office then fixed 24th November 1961 for the hearing of this suit. But on 18th November 1961 the defendant had already filed an application for the stay of the proceedings in this suit in view of its application under section 10 (2) of the Trade Marks Act which had been filed a few days earlier. On 24‑11‑1961 time was granted to the plaintiffs' Advocate to file objections to this application. This has been done and I have to‑day heard the learned counsel of the parties on the question of stay.

5. The main contention of Mr. Zari, the learned Advocate of the defendant is that one of his defences in the suit is based on a plea of honest and concurrent user of the trade marks in question and since the defendant has applied to the Registrar of the Trade Marks for the registration of these trade marks which the latter is empowered to do under sub‑clause (2) of section 10 of the Trade Marks Act, this is a fit case in which this Court should stay its hand and wait for the decision of the defendant's application by the Registrar. He argued that if the Registrar permits the regis tration in favour of the defendant which the latter has prayed for this will constitute a complete defence in the suit.

6. It was further urged that the Registrar has a certain dis cretion in these matters and that this should not be fore‑stalled by the decision of the same question by this Court. Section 10 (2) reads as follows:‑ "In case of honest concurrent use or of other special circumstances which, in the opinion of the Registrar, make it proper so to do he may permit the registration by more than one proprietor of trade marks which are identical or nearly resemble each other In respect of the same goods or description of goods, subject to such conditions, and limitations, if any, as the Registrar may think fit to impose." Mr. Zari has strongly relied on a decision of the Mysore High Court in the case of D. Adinarayana Setty v. Brooke Bond Tea of India Ltd. (A I R 1960 Mysore 142). In this case their Lordships were dealing with two appeals ; one of these was against a decree passed by the Court of the District Judge, Bangalore, granting an injunction against the appellant‑defendant regarding the use by them of a registered trade mark of the plaintiff‑respondent. The other appeal was against an order of the Registrar of Trade Marks, Bangalore, refusing to register the trade marks of the appellant. Both these decisions related to the same trade mark. The appellant‑defendant had, even before the filing of the suit for injunction by the respondent, applied to the Registrar for the registration of his trade marks and had been contending through out that he would be entitled to registration at any rate on the strength of honest and concurrent user. He, however, did not ask the Court below to stay its hand until the disposal of his application by the Registrar, but this omission hardly made any difference because by the time the evidence was recorded in the suit before the District Judge the application for registration had been disposed of against the defendant by the Registrar. In the course of their judgment by which they dismissed the two appeals, the learned Judges made the following observations upon which reliance was placed by Mr. Zari:‑ "What is commonly described as plea of honest and con current user in an action for infringement really connotes that the defendant contends that on the strength of honest and concurrent user he is entitled to get his mark also registered under the provisions of law. It is only upon the registration that the plea becomes a complete and absolute plea and not before. When, therefore, an unregistered proprietor raises a plea of honest and concurrent user in a suit for infringement at the instance of a registered proprietor, the proper thing for the defendant to do to prove the bona fides of his claim is to make an application for registration on the strength of honest and concurrent user and simultaneously ask the Court to stay further proceedings In the suit. In such an event, the proper course for the Court to take would also be to stay further pro ceedings so that the defendant may substantiate his defence, because to refuse to stay and to proceed with the suit would be to deprive the defendant of a substantial and strong defence." These observations have to be read in the light of the facts which I have briefly reproduced above and the important amongst these is that the defendant had throughout been contending that he would be entitled to registration of his trade marks on the strength of honest and concurrent user and had for this purpose applied for registration before this suit for injunction was instituted. But if the above observations are intended to lay down a general principle that whenever an application is made to the Registrar under section 10 (2) of the Trade Marks Act the Court must stay its hands to enable the party so applying to obtain an order from the Registrar, then with great respect I cannot agree. There may be cases in which an application for stay of the suit may be sought merely for the purpose of delaying the suit by making an application to the Registrar under section 10 (2). This application may be frivolous and devoid of any substance and may have been made after the institution of this suit when the defendant may have found his position difficult and untenable. To stay the suit in this situation and to wait for the decision of the Registrar which may sometimes take years, would be denial of justice. It may also be noted that the decision by the Registrar in any case is not final and is subject to an appeal to the High Court. Then there may be cases which may involve the deter mination of other issues apart from those arising under section 10 (2) which could only be tried by the Civil Court. The stay of the suit, therefore, cannot be granted as a matter of course merely upon the presentation of an application by the defendant before the Registrar particularly when that application is made after the institution of this suit.

7. Mr. Zari next relied on a decision of the High Court of Justice‑Chancery Division, In the case of J. U. James & Sons Ltd. v. Wafer Razor Co. Ltd. (49 R P C 597). In that case the pro ceedings in Court were ordered to be stayed till the decision of the defendant's application by the Registrar. But in that case the defendants had, long before the filing of the suit, applied for the registration of their trade mark and had got an impression that the same had been registered and they began using that trade mark under that impression. Later on having been informed that the trade mark had not been registered they filed a second application before the Registrar and this was also long before the suit was filed. It was in these circumstances that the suit was stayed. This case was considered in the case of Flowerdale Ltd. v. Hale Electric Co. Ltd. (66 R P C 333). Jenkins, L. J., with whom Singleton, L. J., agreed referring to the earlier case noted the particular facts of the earlier case and observed that the learned Judge who had decided that case had done so in view of the particular circumstances thereof. It was also noted that when that decision had gone to the Court of Appeal Lord Hanworth had dismissed it upon the ground that the Court below had exercised its discretion and they were not prepared to interfere with it. Jenkins, L. J., further observed that it was not right to say that registration of the mark, if it was obtained, the action being stayed in the meantime, would dispose of the action. The appeal in this case, which was directed against the order of Vaisey, J., refusing to stay the proceedings, was dismissed.

8. I have come to the conclusion that the question whether stay should be granted must be answered with reference to the facts of each case. It is a matter within the discretion of the Court and that discretion has to be exercised in the interest of justice. One of the considerations which may determine an exercise of that discretion is the time when the application for stay is made. Another factor to consider would be whether the application for stay is bona fide. Yet another consideration would be the nature of the case itself. In the case before me the applica tion for registration was made after this suit had been by consent agreed to be heard at a very early date. Secondly the defendants have themselves made a counter‑claim for rectification and thirdly this suit involves the determination of questions which arise from the various agreements between the parties and the course of their dealings. I do not think that there is any justification for the stay of this and the connected suits. I, therefore, dismiss the defendant's application for stay in this suit as well as in the connected suits. K. B. A. Appeal dismissed.