# KNOWN AS KHODAY INDIA LIMITED) v. THE SCOTCH WHISKY ASSOCIATION AND OTHERS

- **Citation:** [2008] 9 S.C.R. 975
- **Court:** Supreme Court of India
- **Decided:** 2008-05-27
- **Case number:** Civil Appeal No. 4179 of 2008
- **Bench:** S.B. Sinha, Lokeshwar Singh Panta
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/known-as-khoday-india-limited-v-the-scotch-whisky-association-and-others-24899
- **Pages:** 63

## Headnote

Trade and Merchandise Marks Act, 1958; Ss. 11, 27, 56
and 109/Limitation Act, 1963; Article 137:
c
Infringement of trade mark - Trade mark 'Peter Scot' -
Registration of, in favour of appellant/manufacturer in 1968 -
Application for Rectification filed by respondent in 197 4 on
ground that it contravenes s.11 of 1958 Act - Rejected by
Registrar, Trade Marks - Affirmed by High Court - CorrectD
, ness of - Held: Application for Rectification was rejected by
the Registrar, Trade Marks, which is not a Court - Hence, provisions u/Article 137 of the Limitation Act not applicable -
Deceptively similar is the principal criteria for consideration
of the application for registration as a/so for rectification - ReE
spondent No. 1 was aware of registration of the marks in question
through an advertisement issued by the appellant-A notice was
allegedly issued by the respondents but they did not take any
further action in the matter - No reason furnished for filing appli-
; cation for rectification so late - Registrar and the High Court both
F
did not pose unto themselves the question as to whether the application for rectification could be dismissed on ground of principle of delay/waiver/acquiescence/abandonment - In a case of
this nature, principle of waiver applicable - Conduct of parties
could also be considered as ground for attracting the doctrine of G
estoppel by acquiescence/waiver/infringement.
Geographical Indication of Goods Act, 1999 - Ss. 20(2)
and 26(2) - Applicability of - Held: Not applicable.
975
H
976
SUPREME COURT REPORTS
[2008] 9 S.C.R.
A
Locus Standi - Held: Respondent No. 1 has no locus
standi to file an application u/s. 56 of 1958 Act.
Deceptively similar goods - Tests - Held: Tests to be
applied in each case are different - look and sound, nature
B and kind of customs, surrounding circumstances, when and
how a person likely to be considered are relevant consideration to decide about deceptivity
).
Doctrines and Principles:
c
Doctrine of estoppel - Applicability of
Principle of Waiver and acquiescence - Applicability of
Appellant, a manufacturer of whisky under the brand
name of 'Peter Scot', filed an application for registration
of the trade mark before respondent No.3, the Registrar
D of Trade Marks and Copy Right, which was not opposed
· by respondent No.1 and the trade mark was registered.
Respondent Nos. 1 & 2 allegedly came to know about the
registration of the trade mark in question in favour of the
appellant in 197 4. They filed an application for rectificaE tion of the trade mark on the grounds that the mark was
not distinctive; that it was not capable of distinguishing
itself as the goods of the appellant; and that the use of
the mark is likely to deceive or confuse. They have sueceeded before the Magistrate only on the third ground.
Appeal filed thereagainst was dismissed by the Single
'
F
Judge of the High Court. Second appeal dismissed by
the Division Bench of the High Court. Hence the present
appeal.
. The questions which arose for consideration before
G this Court were as to whether the term 'Scot' would itself
be a sufficient ground to opine that the mark 'Peter Scot' •
is deceptive or confusing, since the onus of proof would
be on the respondents, as to whether they have discharged the same or not; as to whether the delay in filing
H application for rectification by respondent Nos. 1 and 2
KHODAY DISTILLERIES LTD. (NOW KNOWN AS KHODAY 977
INDIA LTD.) v. THE SCOTCH WHISKY ASSO.
would amount to acquiescence and/or waiver; as to A
whether the delay on the part of respondent Nos. 1 and 2
in filing the application for rectification would amount to
acquiescence and/ or waiver; and as to whether respondent No. 3 as also the Single Judge and the Division Bench
of the High Court have failed to apply the correct tests B
~
and, thus, misdirected themselves in law.
Appellant contended that respondent No. 3 as also
the High Court committed a serious error insofar as they
failed to take into consideration that in

## Text

_Characters 0–36,867 of 118,881. This is a partial read: ask again with offset=36867 for what follows._

[2008] 9 S.C.R. 975
KHODAY DISTILLERIES LIMITED
A
(NOW KNOWN AS KHODAY INDIA LIMITED)
v
THE SCOTCH WHISKY ASSOCIATION AND OTHERS
(Civil Appeal No. 4179 of 2008)
MAY 27, 2008
8
[S.B. SINHA AND LOKESHWAR SINGH PANTA, JJ.]
Trade and Merchandise Marks Act, 1958; Ss. 11, 27, 56
and 109/Limitation Act, 1963; Article 137:
c
Infringement of trade mark - Trade mark 'Peter Scot' -
Registration of, in favour of appellant/manufacturer in 1968 -
Application for Rectification filed by respondent in 197 4 on
ground that it contravenes s.11 of 1958 Act - Rejected by
Registrar, Trade Marks - Affirmed by High Court - CorrectD
, ness of - Held: Application for Rectification was rejected by
the Registrar, Trade Marks, which is not a Court - Hence, provisions u/Article 137 of the Limitation Act not applicable -
Deceptively similar is the principal criteria for consideration
of the application for registration as a/so for rectification - ReE
spondent No. 1 was aware of registration of the marks in question
through an advertisement issued by the appellant-A notice was
allegedly issued by the respondents but they did not take any
further action in the matter - No reason furnished for filing appli-
; cation for rectification so late - Registrar and the High Court both
F
did not pose unto themselves the question as to whether the application for rectification could be dismissed on ground of principle of delay/waiver/acquiescence/abandonment - In a case of
this nature, principle of waiver applicable - Conduct of parties
could also be considered as ground for attracting the doctrine of G
estoppel by acquiescence/waiver/infringement.
Geographical Indication of Goods Act, 1999 - Ss. 20(2)
and 26(2) - Applicability of - Held: Not applicable.
975
H
976
SUPREME COURT REPORTS
[2008] 9 S.C.R.
A
Locus Standi - Held: Respondent No. 1 has no locus
standi to file an application u/s. 56 of 1958 Act.
Deceptively similar goods - Tests - Held: Tests to be
applied in each case are different - look and sound, nature
B and kind of customs, surrounding circumstances, when and
how a person likely to be considered are relevant consideration to decide about deceptivity
).
Doctrines and Principles:
c
Doctrine of estoppel - Applicability of
Principle of Waiver and acquiescence - Applicability of
Appellant, a manufacturer of whisky under the brand
name of 'Peter Scot', filed an application for registration
of the trade mark before respondent No.3, the Registrar
D of Trade Marks and Copy Right, which was not opposed
· by respondent No.1 and the trade mark was registered.
Respondent Nos. 1 & 2 allegedly came to know about the
registration of the trade mark in question in favour of the
appellant in 197 4. They filed an application for rectificaE tion of the trade mark on the grounds that the mark was
not distinctive; that it was not capable of distinguishing
itself as the goods of the appellant; and that the use of
the mark is likely to deceive or confuse. They have sueceeded before the Magistrate only on the third ground.
Appeal filed thereagainst was dismissed by the Single
'
F
Judge of the High Court. Second appeal dismissed by
the Division Bench of the High Court. Hence the present
appeal.
. The questions which arose for consideration before
G this Court were as to whether the term 'Scot' would itself
be a sufficient ground to opine that the mark 'Peter Scot' •
is deceptive or confusing, since the onus of proof would
be on the respondents, as to whether they have discharged the same or not; as to whether the delay in filing
H application for rectification by respondent Nos. 1 and 2
KHODAY DISTILLERIES LTD. (NOW KNOWN AS KHODAY 977
INDIA LTD.) v. THE SCOTCH WHISKY ASSO.
would amount to acquiescence and/or waiver; as to A
whether the delay on the part of respondent Nos. 1 and 2
in filing the application for rectification would amount to
acquiescence and/ or waiver; and as to whether respondent No. 3 as also the Single Judge and the Division Bench
of the High Court have failed to apply the correct tests B
~
and, thus, misdirected themselves in law.
Appellant contended that respondent No. 3 as also
the High Court committed a serious error insofar as they
failed to take into consideration that in view of the statement made in the affidavit affirmed by one Ian Barclay that c
the respondents were aware of the infringement of as far
back in 1974 but as no action was taken in relation thereto
till 1986, the application for rectification was barred under the principles of waiver and acquiescence; that the
trade mark 'Peter Scot' allegedly being evolved of ScotD
land cannot be held to be a subject matter of passing off
as purchasers of the same are discerning; that they are
aware of the brand which they would be purchasing; that
rich and wealthy people would only ordinarily purchase
goods like Scotch Whisky and they being literate cannot E
possibly be pulled by the word 'Scot" knowing that they
are purchasing Scotch Whisky, particularly in view of the
fact that in the label as also in the box, it has categorically
been mentioned that the product is a 'PRIDE OF INDIA"
)
and is manufactured at Bangalore in India; and that the
F
Division Bench of the High Court committed a serious
error in so far as it failed to take into consideration that
having regard to the provisions contained in Section 26
of the Geographical Indication of the Goods Act, 1999, the
rights of trade marks which had been acquired through G
use in good faith were protected and thereby committed
~
a serious error in not allowing the appellant to raise the
said contention, on the premise that the same was being
raised for the first time before it.
Respondent Nos. 1 and 2 submitted that the findings H
978
SUPREME COURT REPORTS
[2008] 9 S.C.R.
A of fact arrived at by the respondent No. 3 and as affirmed
by the Single Judge and the Division Bench of the High
Court should not be interfered with as they cannot be
characterized as extraneous or perverse being based on
no evidence; that an application for rectification is the
B only remedy in respect of a registered trade mark which
is likely to deceive or cause confusion for the purpose of
~
maintaining the purity of register of trade marks wherefor
•
the extended concept of passing off action should be recognized; that the basic distinction between the trade mark
c infringement and passing off action is that whereas the
former flows from a statutory right, the latter is action in
tort being in the realm of unfair competition; that Courts
in India and abroad having consistently protected Scotch
Whisky, any mark carrying words such as SCOT, Glen and
D Highland should not be allowed to continue; that the appellant by using its product as Peter Scot, which is an
Indian Whisky, intended to be seen as a manufacturer of
Scotch Whisky; that ifthere is a fraud at inception in adoption of the name, the court should discourage such fraud
E
in sternest way; that the delay on the part of the respondents would not amount to acquiescence or waiver as
the purpose of filing an application for rectification is to
maintain the purity of register and public interest; and that
the provisions of the 1999 Act are not applicable to the
facts and circumstances of the present case.
"
F
Allowing the appeal, tlie Court
~;
HELD: 1.1 Respondents were well aware that the appellant had filed an application for registration. One of the
questions which was raised before respondent No.3 as
G also before the High Court was as to whether Article 137
of the Limitation Act, 1963 would apply to the rectification
proceedings. Keeping in view the decision of this Court
in the case of Sakur vs. Tanaji, evidently the same has to
be rejected as the Registrar is not a court. The provisions
H of the 1963 Act will have no application in the instant case.
-;
'
KHODAY DISTILLERIES LTD. (NOW KNOWN AS KHODAY 979
INDIA LTD.) v. THE SCOTCH WHISKY ASSO.
(Paras - 28& 66) [999-C,D, 1017-G,H]
Sakur vs. Tanaji AIR (1985) SC 1279 - relied on.
A
1.2 What would be the reasonable period in a given
case would not depend upon the nature of action initiated
before a statutory authority but also upon the purport and
B
object of the statute. If the reliefs sought for before the
superior courts are the same which could be sought for in
a suit, the period of limitation specified for in the Limitation
Act may be taken to be the criteria for consideration as to
whether the same should be treated as a reasonable pe- c
riod, but not otherwise. (Para 30) [1001-A,B,C]
1
State of Madhya Pradesh vs. Bhai/a/ Bhai and others
(1964) 6 SCR 261 at 271 - held inapplicable.
1.3 The duty of the Registrar is to maintain the regis0
ter. An application for registration has also to be considered keeping the public interest in view. What is therefor,
necessary for the Registrar is to arrive at a conclusion as
regards registration of mark, is as to whether having regard to the nature of the mark sought to be registered E
and the use thereof as also the class of bias, would be
deceived or confused with the mark registered or not.
An application for rectification and correction of the register may be entertained if any of the grounds specified
therein exists. (Paras - 37&38) [1002-G,H, 1003-A,B]
1.4 The power of the Registrar in terms of Section 56
of the Trade and Merchandise Marks Act is wide. Subsection (2) of Section 56 of the Act used the word "may"
F
at two places. It enables a person aggrieved to file an
application. It enables the Tribunal to make such order G
as it may think fit. It may not, therefore, be correct to co·n-··
tend that under no circumstances the delay or ~cqules~:
...-" .'t•
cence or waiver or any other principle analogous theretQ·
i . ' ',,.J
would apply. (Para - 39 ) [1003-D,E]
·· -· · ·'
980
SUPREME COURT REPORTS
[2008] 9 S.C.R.
A
1.5 Purity of register as also the public interest would
be relevant consideration. But, when a discretionary jurisdiction has been conferred on a statutory authority, the
same although would be required to be considered on
objective criteria but as a legal principle it cannot be said
B that the delay leading to acquiescence or waiver or abandonment will have no role to play. (Para-40) [1003-F]
Ciba Ltd. Basie Switzerland vs. M. Ramalingam and S.
Subramaniam trading in the name of South Indian Manufacturing Co., Madura and another AIR 1958 Bombay 56 - rec lied on.
1.6 It is one thing to say that class or group action
will receive special attention of the statutory authority visa-vis a private action. But, in both types of cases, public
0 interest should remain uppermost in the mind of the authority. The question which is required to be posed therefor would be as to whether the public in general or the
class of bias would be deceived or be confused if the
existing mark is allowed to remain on the register. Thus,
deceptively similar or confusion is the principal criteria
E for determining applications both for registration as also
for rectification. (Para - 40 ) [1004-B,C]
2.1 In the affidavit it was affirmed by the respondent
that they were aware of registration of the mark through
F an advertisement made in a trade mark journal at the instance of the appellant as also a report. Respondent No.1
had issued a notice. It also issued a notice in respect of
an application filed by the appellant for registered proprietors trade mark 'Hogmanay' which led to withdrawal of
G the said application by the appellant before hearing. He
also affirmed that there are provisional trade mark agencies about the trade marks advertisements in all the countries in classes 32 and 33 which inter alia have British or
Scottish connotations. (Para-42 ) [1004-F-H, 1005-A]
H
)-
KHODAY DISTILLERIES LTD. (NOW KNOWN AS KHODAY 981
INDIA LTD.) v. THE SCOTCH WHISKY ASSO.
--.<
~
2.2 It is evident that whereas actions had been taken A
by respondent No.1 against each and every party
throughout the world whenever a mark evocating Scotland or any other brand which remained in the minds of
the. buyer of the Scotland had been opposed, the appellant was singularly left out. They opposed to the registraB
tion of the mark and in fact issued a notice. If it had issued a notice then there is absolutely no reason as to
why they did not pursue the same. (Para 45) [1007-F,G]
2.3 If the respondent No. 1 took such actions in re- c
spect of other trade marks 'Hogmanay' and 'Old Angus'
in 1974 and 1979, this Court fails to understand as to why
a similar action was not taken in relation to Peter Scot.
{Para-45) [1008-B]
'
2.4 When action had been taken by the respondent
No. 1 in so many matters although one of the matters was D
)
pending before this Court, the explanation offered appeared to be absolutely hollow, particularly when even
on its own showing the respondent No. 1 succeeded even
..
in the said proceedings. Nothing has been stated by reE
spondent Nos. 1 and 2 in the affidavit as to what was the
occasion to file such an application in 1986 but prompted
them to wake up after such a long time is beyond
anybody's comprehension. (Para-47 -48) [1009-C,D,E]
)
2.5 Once the facts are admitted the legal inference F
shall ensue. Respondent No. 3 as also the Single Judge
and the Division Bench of the High Court failed and/ or
neglected to advert to this aspect of the matter. They did
not pose unto themselves the question as to whether an
application for rectification can be dismissed on the G
ground of principle of delay, acquiescence, waiver or
abandonment. It is one thing to say that such principles
can never be applied but it is another thing to say that
whether they should be applied in a fact situation obtaining in a particular case or not. If they have any applicaH
982
SUPREME COURT REPORTS
(2008] 9 S.C.R.
A tion, the same should have been considered by the respondent No. 3 as also by the High Court on their own
merit. (Para -
49) [1009-F-H, 1010-A]
2.6 The principles of waiver and acquiescence in a
case of this nature are applicable. Apart from the ordinary
8 rule of waiver of a right expressly provided for in a case
of passing off, the court has consistently been noticing
development of law in this field. (Para - 53) [1011-D]
Scotch Whiskey Association and another vs. Pravara
c Sahakar Shakar Karkhana, AIR (1992) Born. 294- referred to.
D
E
2.7 In cases involving equity or justice, conduct of
the parties has also been considered to be a ground for
attracting the doctrine of estoppel by acquiescence or
waiver for infringement. (Para - 56) [1013-C]
Habib Bank Ltd. v. Habib Bank, A. G Zurich, [1980] (1)
W.L.R. 1265 at 1283-1284 and Taylor Fashions Ltd. v.
Liverpool Victoria Trustees Co. Ltd. [(Note) [1981] 2 W.L.R.]
576-referred to.
2.8 Delay would be a valid defence where it has
caused a change in the subject matter and action or
brought about a situation in which justice cannot be done.
(Para - 59) [1015-A]
Mis. Power Control Appliances and others vs. Sumeet
F Research and Holdings, (1994) 2 SCC 448 and Ramdev
Food Products (P) Ltd. vs. Arvindbhai Rambhai Patel and
others (2006) 8 sec 726 - relied on.
Halsbury's Laws of England, Fourth Edition, Vol. 16 -
G referred to.
2.9 The doctrine of continuing wrong has nothing to
do with the refusal on the part of a statutory authority or a
court of law to exercise its discretionary jurisdiction on
the ground of latches, acquiescence or waiver. (Para-64)
H [1017-8,C]
-
KHODAY DISTILLERIES LTD. (NOW KNOWN AS KHODAY 983
-:
INDIA LTD.) v. THE SCOTCH WHISKY ASSO .
...
Ba/akrishna Sava/ram Pujari Waghmare and others v.
A
Shree Dhyaneshwar Maharaj Sansthan and others AIR 1959
SC 798] - referred to.
Pfizer Products Inc. v. Rajesh Chopra & Ors. [2007 (35)
PTC 59 (Del) and Mc Donald's Corporation and Another v.
B
Sterling's Mac Fast Food Represented by its Partner John
""
Mathew [ILR 2007 Karnataka 3346 - referred to.
Willmott v. Barber [15 Ch. D. 96] - referred to.
2.10 It is also not a case where a Court has been conferred power to exercise a suo motu jurisdiction. (Para - c
67) (1018-A]
Bengal Waterproof Limited vs. Bombay Waterproof
Manufacturing Company and Another (1997) 1 SCC 99] -
held inapplicable.
D
State of Punjab & Ors. vs. Bhatinda District Coop. Milk
P Union Ltd. (2007) 2 SCALE 135 - held inapplicable.
2.11 In the peculiar facts and circumstances of the
case, this Court is of the opinion that action of the reE
spondents is barred under the principles of acquiescence
and/ or waiver. (Para - 69) [1018-C,D]
3.1 The decision of the respondent No. 3 that the re-
)
spondent No. 1 has no locus standi to file an application
under Section 56 of the 1958 Act has attained finality. LoF
cus has been found only in favour of the respondent No.
2. It comes within the purview of a foreign manufacturer
whose goods are sold in this country. It indisputably have
acquired a protectable goodwill in his trade name or trademarks. There will then be the question, which in principle G
would involve pure question of fact, is whether the goodwill is that of the foreign manufacturer or the importer.
(Para -73) [1019-D,E]
~
Law of Trade Marks and Trade Names Fourteenth Eok
rti on, para 15-067, page 456 by Kerly - referred to.
H
984
SUPREME COURT REPORTS
[2008] 9 S.C.R.
A
3.2 The tests which are required to be applied in each
case would be different. Each word must be taken separately. They should be judged by their look and by their
sound. Must consider th~ goods to which they are to be
applied. Nature and kind of customers who would likely
B to buy goods must also be considered. Surrounding circumstances play an important factor. What would likely
:..
to happen if each of those trade marks is used in a normal way as a trade mark of the goods of the respective
owners of the marks would also be a relevant factor. Thus,
C when and how a person would likely to be confused is a
very relevant consideration. (Para - 83) [1031-E,F,G]
Pianotist Co.' Application, Re, (1906) 23 RPC 774 - referred to.
0
3.3 Where the class of buyers is quite educated and
rich, the test to be applied is different from the one where
the product would be purchased by the villagers, illiterate and poor. Ordinarily, again they would purchase alcoholic beverages by their brand name. When, however, the
product is to be purchased both by villagers and town
E people, the test of a prudent man would necessary be
applied. It may be true that the tests which are to be applied in a country like India may be different from the tests
either in a country of England, United Sates of America or
F
Australia. (Para-84) [1031-H, 1032-A,B]
Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd.
(2001) 5 sec 73 - referred to.
Carew Phipson Limited v. Deejay Distilleries Pvt. Ltd.,
AIR 1994 Born. 231 and Diageo North America, Inc. and anG other v. Shiva Distilleries Ltd. 143 (2007) DLT 321 - referred
to.
Scotch Whisky Association v. Marton De Witt (2008) FCA
73; Cooper Engineering Co. Pty. Ltd. v Sigmund Pumps Ltd.
H (1952) HCA 15; The Scotch Whisky Association v. Majestic ·-
KHODAY DISTILLERIES LTD. (NOW KNOWN AS KHODAY 985
INDIA LTD.) v. THE SCOTCH WHISKY ASSO.
).
Distilling Company 958 F.2d 594 and Champagne Louis A
Roederer, S.A. v. Delicato Vineyards, 148 F. 3d 1373 - referred to.
4. This Court is concerned with the class of buyer
who supposed to know the value of money, the quality
B
and content of Scotch Whisky. They are supposed to be
aware of the difference of the process of manufacture,
the place of manufacture and their origin. Respondent
No.3, the Single Judge as also the Division Bench of the
High Court, therefore, failed to notice the distinction,
which is real and otherwise borne out from the precedents c
operating in the field. Had these tests been applied the
matter might have been different. In a given case probably, this Court would not have interfered but in the instant case it intend to do so only because wrong tests
applied led to a wrong result. So far as the applicability of D
the Geographical Indication of the Goods Act 1999 is concerned, having regard to the provisions of Sections 20(2)
and 26(2), this Court is of the opinion that the 1999 Act
will have no application. (Paras-88-89) [1037-C-F]
Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd.,
E
(2001) 5 sec 73 - referred to.
Bollinger, J. and Others v. Costa Brava Wine Coy., Ld.
(1960) 1 RPC 16; Mayor of Bradford v. Pickles 1895 AC
)
587and J. Bollinger and Others v. The Costa Brava Wine
F
Company Limited 1961 (5) RPC 116 - referred to.
Law of Trade Marks and Trade Names, Thirteenth Edition pg. 600 by Kerly - referred to.
CIVILAPPELLATE JURISDICTION: Civil Appeal No. 4179 G
of 2008
•
From the final Judgment and Order dated 12/10/2007 of
the High Court of Judicature at Madras in T.M.S.A. No. 2 of
....
1999
/
H
986
SUPREME COURT REPORTS
[2008] 9 S.C.R.
A
R.F. Nariman, Lakshmi Narayana, Sunder Srinivas, Gopal
Jain, Ajay Bhargava, Vanita Bhargava, Amit Verma, Giridharan
P. and Nupur Mukherjee (for Mis. Khaitan & Co.) for the Appelfant.
B
Ashok H. Desai, Zubin Morris, Shruti Chanduary, Maneka
Guruswamy, Mamta Tiwari, Swati Sinha and Jayasree Singh
(for Mis. Fox Manda! & Co.) for the Respondents.
The Judgment of the Court was delivered by
S.B. SINHA, J. 1. Leave granted.
c
2. This appeal by special leave is directed against the
judgment and order dated 121h October, 2007 passed by a Division Bench of the High Court of Judicature at Madras in Trade
Mark Second Appeal (TMSA) No. 2 of 1998 affirming the judgD ment and order dated 251h September, 1998 passed in TM.A.
No.3 of 1989 whereby and whereunder an appeal preferred by
the appellant herein under Section 109 of the Trade and Merchandise Marks Act, 1958 arising out of an order dated 121h
May, 1979 by respondent No.3 was dismissed.
E
3. Appellant is a company incorporated under the Companies Act, 1956. It manufactures whisky under the mark 'Peter Scot'. Manufacture of the said product allegedly was started
by the company in May, 1968. An application was filed by it for
registration of its mark before the respondent No.3. Appellant
F was informed that its application was accepted and allowed to
proceed with the advertisement, subject to the condition that
the mark would be treated as associated with Reg. T.M.
No.249226-B.
4. A proceeding was initiated as regards registration of
G the trade mark. No opposition was filed by the respondent.
Only one Mis. Mohan Meakins filed an opposition. The said
•
trade mark was registered.
5. Respondent Nos. 1 and 2 came to know of the
~
appellant's mark on or about 201h September, 1974. They filed
~
H
KHODAY DISTILLERIES LTD. (NOW KNOWN AS KHODAY 987
INDIA LTD.) v. THE SCOTCH WHISKY ASSO. [SINHA, J)
an application for rectification of the said trade mark on 21st
A
April, 1986. We may also notice that a suit for passing off has
also been filed by the 1st respondent and others in the Bombay
High Court being C.S. No. 1729of1987, which is stated to be
still pending.
6. Appellant having been called upon showing its cause,
B
by way of an affidavit affirmed by one Mr. Petern Warren explaining the manner in which the word 'Peter Scot' was coined,
stating :-
"While I was employed in Khoday, the whisky we produced c
was sold under at !east two marks, namely RED KNIGHT
and PETER SCOT. The brand name 'Peter Scot' was
coined primarily with my father in mind i.e. using his
forename, 'Peter'', and his nationality, 'Scot'. Another factor
behind the coining of this brand name was the D
internationally known British explorer, Captain Scott, and
")"
his son Peter Scott, who is widely known as an artist,
naturalist and Chairman of the World Wildlife Fund.
Although the name 'Scott' is spelt with two 't's, it is
phonetically the same as 'Scot'.
E
7. Before the 3rd respondent, respondents 1 and 2 filed
affidavits affirmed by 20 different persons in support of their
application for modification. One of the affidavits to which, we
would advert to a little later was affirmed by Ian Barclay, who is
)
an in-house Solicitor of the said. respondents.
F
8. Several issues were framed by the 3rd respondent in
the said proceedings which were as under -
"(1) Whether the applicants are "persons aggrieved"
under Section 56;
G
(2)
Whether the Application for rectification is not
,.
maintainable due to any mis-joinder of Applicants;
(3)
Whether the impugned mark was not distinctive of
the goods of the registered proprietors at the H
988
SUPREME COURT REPORTS
[2008] 9 S.C.R.
A
commencement of the rectification proceedings;
(4)
Whether the impugned registration contravenes
Section 11 at the commencement of rectification
proceedings; and
B
(5)
Whether the mark is liable to be rectified and if so,
in what manner."
9. While opining thatthe 1'1 respondent has no locus standi
to maintain the said application for rectification, it upheld the
locus standi of the 2"d respondent. As regards Issue No.2 is
C concerned, it held that the mis-joinder of the applicants is not
fatal. Issue No.3 which was to the effect that whether the impugned mark was not distinctive of the goods of the registered
proprietors at the commencement of the rectification proceedings, it was answered in favour of the appellant.
D
10. Issue No.4 which primarily concern us was discussed
by the 3rc1 respondent at some details. It was held that the mark
has been used deceptively for long time and, although there is
also unexplainable and inexcusable delay on the part of the reE spondents in filing the rectification application, the registered
proprietors failed to file any evidence nor did they raise their
little finger to rebut the evidence filed by the applicants/respondents. The plea of acquiescence/delay raised by the appellant
was negatived on the ground that the plea of deceptive element in the impugned mark having neither been displaced nor
F
rebutted by evidence on the part of the registered proprietors,
the pleas of delay and acquiescence cannot be allowed in favour
of the registered proprietors.
11. On the affidavit evidence filed on behalf of the responG dents, respondent No.3, although opined, that the same was
not satisfactory but held the respondents' plea that the impugned
registration contravenes Section 11 of the Act, stating :-
"Nonetheless, the evidence gives an impression that some
customers are being persuaded into thinking that PETER
H
SCOT brand Whisky is also a Scotch Whisky. This is on
KHODAY DISTILLERIES LTD. (NOW KNOWN AS KHODAY 989
!NOIA LTD.) v. THE SCOTCH WHISKY ASSO. [SINHA, J.]
account of the poresence of two factors, namely- (1) the
A
presence of the word Scot in the PETER SCOT mark and
(2) the presence of some slogan on the Whisky bottles
under PETER SCOT brand.
Unfortunately, there is
absolutely no evidence whatever from the registered
proprietors to assail or counteract or rebut the Applicants' 8
evidence. In the absence of any material or evidence in
rebuttal or reply from the registered proprietors, the
evidence of Applicants stands unquestioned, unrebutted,
...
unassailed and even unmitigated and I have no other go
except to receive the voluminous affidavit and c
documentary evidence filed by Applicants on its face
value."
12. On the aforementioned premise, the application for
rectification was allowed.
13. An appeal was preferred thereagainst by the appelD
l
lant before the High Court in terms of Section 109 of the Act.
14. A learned Single Judge of the High Court dismissed
the said appeal. As regards the plea of acquiescence it was
held:-
E
'The acquiescence if it is to be made a ground for declining
to rectify, must be of such a character as to establish
gross-negligence on the part of the applicant or deliberate
)
inaction which had regulated in the appellant incurring
F
substantial expenditure or being misled into the belief that
the respondents though entitled to, had deliberately
refrained from taking any action and were unmindful of the
use of the mark by the person in whose name it was
registered.
The facts of this case are not such as to warrant the G
conclusion that there has been acquiescence."
15. Noticing that the appellant had neither adduced any
evidence nor cross-examined the deponents of the affidavits, it
was held:-
H
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SUPREME COURT REPORTS
[2008] 9 S.C.R.
-'
A
"It is unfortunate that the appellant had chosen to refrain
from placing any material before the authority to refuse
the claim for rectification. Apparently, appellant did not
have great faith in the validity of the registration and did
not consider it worthwhile even to cross-examine the
B
witnesses who had filed the affidavits in support of the
application for rectification. It is evident that adoption of
Ithe mark 'Peter scot' by the appellant was for the reasons
mentioned in the.affidavit of Peter Jeffery Warren. The
mark was adopted apparently with a view to take
c
advantage of the good will associated with Scotch whisky
by using the word "Scot" as part of the trade mark for the
whisky manufactured by the appellant."
16. As regards the quality of the affidavits it was held :-
D
"The criticism leveled against the deponents of some of
the affidavits filed by the respondents as evidence though
1
justified to some extent does not help the appellant to
avoid rectification. The statutory standard is not the actual
confusion and deception but likelihood thereof. The term
E
'Scot' when used in association with whisky of non-Scottish
origin is inherently capable of and is likely to cause
confusion and deception."
17. Feeling aggrieved, an intra court appeal was preferred
thereagainst by the appellant. A Division Bench of the High
~
F Court, as noticed hereinbefore, dismissed the said appeal. The
Division Bench noticed at some length the submissions made
by the parties to inter alia hold :-
"We have carefully considered the abovesaid submissions
made by the counsel on either side. In our considered
G
view, the use of the device "Lion Rampant" and the
abovesaid description especially the description "Distilled
..
from the Finest Malt and Blended with the Choicest
Whiskeys by Scotch Experts under Government
Supervision" is definitely intended to lead the consumers
H
to believe that the whiskey manufactured by the appellant
KHODAY DISTILLERIES LTD. (NOW KNOWN AS KHODAY 991
INDIA LTD.) v. THE SCOTCH WHISKY ASSO. [SINHA, J.]
"
is scotch whiskey. Though specific averments as above A
said have been made in the affidavit on Ian Barclay, the
same have not been rebutted by the appellant by adducing
rebuttal evidence. The appellant has also not chosen to
cross-examine Ian Barclay on the averments contained in
the affidavit. Therefore, we are of the considered view that
B
both the third respondent and the learned single Judge
..
have considered all the relevant materials available on
record and have exercised their discretion properly and
as such we do not find any reason to interfere with the
1 judgment of the learned single Judge."
c
18. Mr. R. F. Nariman, learned senior counsel appearing
on behalf of the appellant, submitted :-
1.
Respondent No. 3 as also the High Court committed
a serious error insofar as they failed to take into D
consideration that in view of the statement made in
~
the affidavit affirmed by Ian Barclay that the
respondents were aware of infringement of marked
as far back in 1974 but as no action was taken in
relation thereto till 1986, the application for E
rectification was barred under the principles of waiver
and acquiescence.
2.
Long delay of 14 years caused in filing the said
application for rectification should have been held to
J
be fatal having regard to the fact that the same caused
F
immense prejudice to the appellant as in the
meantime, the sale of the appellant had gone many
folds.
3.
Acquiescence on the part of the respondents would
amount to waiver, if not abandonment, of their right G
as any order passed for rectification of the mark
....
being unconscionable and inequitable, the same
-
should not have been allowed.
4.
The word 'Peter Scot' allegedly being evolved of H
992
SUPREME COURT REPORTS
[2008] 9 S.C.R.
A
Scotland cannot be held to be a subject matter of
•
passing off as :-
a)
Purchasers of the same are discerning;
b)
They are aware of the brand which they would
•
B
be purchasing ;
c)
Rich and wealthy people would only ordinarily
).
purchase goods like Scotch \Nhisky and they
being literate cannot possibly be pulled by the
c
word 'Scot" knowing that they are purchasing
Scotch Whisky, particularly in view of the fact
that in the label as also in the box, it has
categorically been mentioned that the product
is a 'PRIDE OF INDIA" and is manufactured at
Bangalore in India;
D
5.
The Division Bench committed a serious error insofar
it failed to take into consideration the aforementioned
arguments of the appellant, although categorically
noticed by it, so far as if the label is to be looked by
E
in its entirety, the emblem of Rampant Lion with the
words 'Distilled from the Finest Malt and Blended
with the Choicest Whiskies by Scotch Experts under
Government Supervision' must be read with the word
"PRIDE OF INDIA" and the names of the appellant
and the fact that it was manufactured at Bangalore.
4
F
6.
The Division Bench of the High Court committed a
,;-~-
serious error in so far as it failed to take into
consideration that having regard to the provisions
contained in Section 26 of the Geographical
G
Indication of the Goods Act, 1999 (for short "the 1999
Act"), the rights of trade marks which had been
acquired through use in good faith were protected
... f--
and thereby committed a serious error in not allowing
the appellant to raise the said contention, on the
-
H
premise that the same was being raised for the first
KHODAY DISTILLERIES LTD. (NOW KNOWN AS KHODAY 993
INDIA LTD.) v. THE SCOTCH WHISKY ASSO. [SINHA, J.]
..
time before it.
A
19. Mr. Ashok H. Desai, learned Senior Counsel appearing on behalf of the respondent Nos. 1 and 2, on the other hand
submitted :-
(i)
The findings of fact arrived at by the respondent No.
B
3 and as affirmed by the learned Single Judge and
the Division Bench of the High Court should not be
interfered with as they cannot be characterized as
extraneous or perverse being based on no evidence.
(ii)
An application for rectification is the only remedy in c
respect of a registered trade mark which is likely to
deceive or cause confusion for the purpose of
maintaining the purity of register of trade marks
wherefor the extended concept of passing off action
should be recognized.
D
(iii) The basic distinction between the trade mark
infringement and passing off action is that whereas
the former flows from a statutory right, the latter is
action in tort being in the realm of unfair competition.
E
(iv)
Courts in India and abroad having consistently
protected Scotch Whisky, any mark carrying words
such as SCOT, Glen and Highland should not be
allowed to continue. Appellant by using its product
as Peter Scot, which is an Indian Whisky, intended
F
to be seen as a manufacturer of Scotch Whisky, as
would be evident from the affidavit of Mr. Peter J.
Warren.
(v)
If there is a fraud at inception in adoption of the name,
the court should discourage such fraud in sternest G
way. It is not correct to contend that the delay, if any,
on the part of the respondents would amount to
acquiescence or waiver as the purpose of filing an
application for rectification is to maintain the purity
of register and public interest.
H
994
SUPREME COURT REPORTS
[2008] 9 S.C.R.
A
(vi) There is significant evidence in the present case as
..
regards confusion concerning whisky bearing the
name of Peter Scot which having not been
controverted or rebutted would clearly go to show
that any ordinary consumer would tend to believe
B
that Peter Scot is a Scotch and not an Indian Whisky.
(vii) The label used by the appellant clearly suggests that
it is a Scotch Whisky and not of Indian origin.
(viii) The provisions of the 1999 Act are not applicable to
c
the facts and circumstances of the present case.
20. Before adverting to the rival contentions we may notice some of the provisions of the Act.
Sections 2(1 )(d) ; 11, 27(2); 56 and 109 of the Act read as
D under:
"2- Definitions and interpretation-(1) In this Act, unless
the context otherwise requires,-
(a) to (c) ......
E
(d) "deceptively similar'':-A mark shall be deemed to be
deceptively similar to another mark if it so nearly resembles
that other mark as to be likely to deceive or cause
confusion;
F
11 - Prohibition of registration of certain marks-A
mark-
(a) the use of which would be likely to deceive or cause
confusion; or
(b) the use of which would be contrary to any law for the
G
time being in force; or
(c) which comprises or contains scandalous or obscene
matter; or
(d) which comprises or contains any matter likely to hurt
H
the religious susceptibilities of any class or section of the
KHODAY DISTILLERIES LTD. (NOW KNOWN AS KHODAY 995
INDIA LTD.) v. THE SCOTCH WHISKY ASSO.