Common Law Protection of Trade Names in Local Markets

Facts

The plaintiff, Devraj, had been running a saree business in Bhiwani for nearly forty years under the name “Bimal Saree Centre”, earning goodwill and reputation among local customers. Documentary evidence including bills, income tax returns, bank account documents, advertisements and GST registration proved that the business was not only old but also widely known.

The defendants, who earlier ran a hosiery shop at the same location under the traditional family name “Dharampal Di Hatti”, later started selling sarees. The evidence showed that for almost four decades the defendants did not use the name “Vimal” at all.

In 2021, the defendants changed their business name unexpectedly to “Vimal Saree Palace”, despite having an established older business identity. The new shop was located only six shops before the plaintiff’s shop in the same street, meaning close proximity. The names “Vimal Saree Palace” and “Bimal Saree Centre”, especially when written in Hindi, looked and sounded very similar.

• This caused customers to confuse both shops
• Customers asked about “Bimal Saree Centre” while inside defendants’ shop
• Defendants hired plaintiff’s ex-employee, supporting dishonest intent

The plaintiff filed a suit for permanent injunction under the Trade Marks Act, 1999, seeking to restrain the defendants from using the deceptively similar name.

Procedural History

The Trial Court decreed the suit on 17.10.2022, restraining the defendants from using the trade name “Vimal Saree Palace” or “Vimal Wadhwa Saree Palace”.

The defendants filed Regular First Appeal (RFA-1291-2022) before the High Court and argued that:

1. They had already changed their name from “Vimal Saree Palace” to “Vimal Wadhwa Saree Palace,” making the suit infructuous.
2. The plaintiff himself did not appear as a witness.
3. Other saree shops existed in the area, so no monopoly could existed. The word “Vimal/Bimal” was generic and could be used by anyone.

Core Dispute for Adjudication

The central issue before the High Court was whether the defendants’ use of the business name “Vimal Saree Palace / Vimal Wadhwa Saree Palace” amounted to passing-off, causing confusion and deception among customers who associated saree sales in that area with the well-known and pre-existing business “Bimal Saree Centre.”

Judicial Reasoning and Analysis

The Court found that the plaintiff established prior and long-standing usage of the trade name “Bimal Saree Centre” supported through documentary evidence and testimony of PW-1 Rajesh Kumar (plaintiff’s son and power of attorney). The Court accepted his testimony as he managed the business personally and was aware of all transactions, and relied on the Supreme Court in Man Kaur (Dead) by LRs v. Hartar Singh Sangha, (2010) 10 SCC 512, to hold that where the authorised attorney operates day-to-day business, his deposition is valid despite the plaintiff not appearing in person.

The Court rejected the defendants’ argument that the name had been voluntarily changed to avoid confusion. The Local Commissioner’s report and photographs showed that the defendants continued displaying the word “Vimal” prominently, violating even the undertaking given before the Court.

The Court held that the phonetic and visual similarity between “Vimal” and “Bimal,” particularly in Hindi script, created clear likelihood of deception and confusion. Evidence also showed that even independent dealers mistakenly addressed the defendants as “Bimal Wadhwa Saree Palace” instead of “Vimal Wadhwa Saree Palace”, proving confusion beyond customers.

The Court further accepted sales decline proved through GST returns, noting a clear drop in the plaintiff’s turnover after the defendants adopted the confusing name. It observed that since the documents were exhibited without objection, the defendants could not later challenge them on mode of proof. Reliance was placed on Bhagwan Dass v. Khem Chand, 1973 AIR Punjab & Haryana 477 and Gopal Das (Privy Council, AIR 1943 PC 83).

The Court relied on the earlier binding precedent D.P. Jagan and Sons v. M/s D.P. Jagan & Co. (RFA-1571-2017 decided on 12.05.2020) to reinforce that a prior user of a business name is entitled to protection under common law of passing-off, even without trademark registration, and that similar business names used in the same street amount to actionable deception.

The Court concluded that adoption of “Vimal” instead of “Bimal” was intentional, dishonest and commercially motivated to capture plaintiff’s goodwill. The fact that the defendants had an earlier business name and abandoned it—despite it having a longer history—showed malafide intention.

Final Decision

The High Court upheld the Trial Court’s decree and permanently restrained the defendants from using the trade names “Vimal Saree Palace” or “Vimal Wadhwa Saree Palace” or any other deceptively similar name likely to lead customers to believe that their goods and services were connected with “Bimal Saree Centre.”

Case Details

Disclaimer

The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.

Written By

Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi