Monday, 11 May 2020

Delhi HC: Definition of commercial dispute in Commercial court Act is not inclusive

The submission of Mr. Lall that this Court should construe the expression "commercial dispute" widely to include all commercial disputes, even if they do not strictly fall within clauses (i) to (xxii) of Section 2(1) (c), cannot be accepted for the reason that the Parliament has consciously given the precise definition as to what a commercial dispute "means". It is not an inclusive definition and the specific matters which qualify as relating to "commercial disputes" have been specifically set out in clauses (i) to (xxii) aforesaid.
IN THE HIGH COURT OF DELHI

CS (OS) 3187/2015 and I.A. Nos. 22366-22368/2015

Decided On: 03.02.2016

 Havells India Limited  Vs.  The Advertising Standards Council of India

Hon'ble Judges/Coram:
Vipin Sanghi, J.



1. Learned counsel for the parties were heard at some length on the aspect whether the present suit relates to a commercial dispute within the meaning of Section 2(1) (c) of the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 (Commercial Courts Act). After the hearing, the counsels were verbally informed that the submission of Mr. Lall - that the disputes arising in the present suit are commercial disputes, has been rejected and, accordingly, a short order adjourning the proceedings was recorded. Counsels were informed that a detailed order would follow. It has, thus, become necessary to record reasons and pass this order. As noticed above, it is contended by the learned counsel for the petitioner Mr. Chander M. Lall that the dispute arising in the present suit is a commercial dispute, whereas learned counsel for the defendant has opposed the said submission. Depending on the determination whether the dispute raised in the present suit is commercial, or not, would depend the decision whether to transfer the suit to the Court of the concerned District Judge having jurisdiction over the matter, or to retain the suit in this Court as a commercial cause, since the jurisdictional valuation is below Rs. 1 Crore.

2. The suit filed by the plaintiff is directed against the Advertising Standards Council of India (ASCI). The plaintiff company states that it is engaged in the business of manufacture and supply of Fast Moving Electrical Goods (FMEG). It is engaged, inter alia, in the production of electrical cables and wires. In respect of wires & cables, the plaintiff has adopted/ used the tagline "Wires that don't catch fire". It has been running an advertising campaign for its wires & cable products using the said tagline. The plaintiff states in paragraph 2 of the plaint that the suit relates to the illegal direction dated September 15, 2015 issued by the defendant, directing the plaintiff to withdraw or appropriately modify an advertisement of the plaintiff's advertisement campaign featuring its distinctive tagline and trade mark "Wires that don't catch fire", which tagline has be uninterruptedly and continuously used since the year 2007, inter alia, in numerous advertising campaigns issued on national scale on national television channels by the plaintiff, and which is the back bone of the plaintiff's promotion of its fire retardant wire & cable products.

3. A perusal of paragraph 3 of the plaint shows that the grievance of the plaintiff is that the defendant has issued the impugned directions without following the due process of law, including non-compliance of the principles of natural justice.

4. In paragraph 4 of the plaint, the plaintiff states that the defendant has passed a cryptic and non-speaking order dated 16.09.2015 without application of mind and the same does not have sanction of law. The plaintiff's tag line "Wires that don't catch fire" was considered to be misleading by exaggeration, and the plaintiff has been asked to modify/withdraw its T.V. Commercial. The communication for modification / withdrawal has been simultaneously sent and forwarded to third parties for compliance.

5. The plaintiff claims in paragraph 5 of the plaint that the impugned order restricts it from exercising, inter alia, its intellectual property right in the tagline created by using rhyming words - as an expression of creativity, which has attained goodwill and reputation by virtue of its long and continuous use. The plaintiff states that creation and use of such tag lines is a well-established and universally accepted practice, as a tool for marketing. Advertising helps customers to know about the benefits they can expect while choosing a product or service. It establishes a company's brand. The purpose and intent of using a tagline is to connect the brand of a particular manufacturer, and to create a recall value. The tagline creates intellectual rights of commercial value and importance for the manufacturer, contributing to its brand equity. The plaintiff states that the tagline in question has been able to achieve for the plaintiff, the status of a well-known trade mark in respect of "HAVELLS". The plaintiff states that the slogans used by it are coined specifically keeping in mind the attributes of its products for which they are used, besides having a creative element that they catch the tongue of the audience who uses them as "lite motif".

6. The plaintiff states that it is not a member of the defendant/ ASCI. It states that the conduct of the defendant has been adversely commented upon by the Bombay High Court in several decisions such as Teleshopping Vs. The Advertising Standards Council of India, Suit (L) No. 492/2015 in its judgment/ order dated 08.05.2015, and in Century Ply Boards (India) Ltd. Vs. The Advertising Standards Council of India, MANU/MH/0030/2000 : 2000 (1) Bom.CR 136. The plaintiff states that the defendant has issued the impugned direction dated 15.09.2015 arbitrarily, unjustly and without complying with the principles of natural justice.

7. The plaintiff states that in the year 2007, it launched the advertising campaign using the tagline "Wires that don't catch fire" for promoting its fire retardant wires & cable products. The plaintiff claims that it enjoys intellectual property rights in the said tagline. The plaintiff claims copyright/ trademark in the slogan/ tagline "Wires that don't catch fire"; goodwill and common law rights in the advertising campaign with the said tagline; copyright in the advertising script and; common law trade mark rights in the tagline "Wires that don't catch fire". The said tagline has acquired trade mark significance inasmuch, as, it is exclusively associated with the plaintiff. The tagline in question creates an instant brand connect with the plaintiff's products.

8. The grievance against the defendant narrated in the suit is that the defendant has passed the order dated 16.09.2015, thereby directing the plaintiff to either modify its television commercial - which shows a lunch box suspended with the support of "HAVELLS" wire above the fire to heat the food and the advertisement goes "Wires that don't catch fire", or to withdraw the same prior to 05.10.2015. The grievance is that the said order has been passed without an opportunity of hearing to the plaintiff and a review is provided on the condition that the plaintiff first complies with the order. The order dated 16.09.2015 is said to be non-speaking and cryptic by claiming that the tagline "Wires that don't catch fire" is misleading by exaggeration with regard to the properties and characteristics of the plaintiff's product. The plaintiff states that the cause of action accrued in favour of the plaintiff on 16.09.2015 when the plaintiff received the impugned decision of the defendant, as aforesaid. The reliefs sought in the suit are the following:

a. A decree of declaration that the mark /expression "Wires that Don't Catch Fire" of the plaintiff is a well-known mark;

b. This Hon'ble Court declare that the advertisement campaign of the plaintiff is fair and truthful and does not constitute a violation of any advertising laws or code and the plaintiff is entitled to broadcast the advertisement throughout the country;

c. A decree of permanent injunction be passed against the defendant thereby staying the impugned order dated 16.09.2015 passed by the defendant against the advertisement of the plaintiff.

d. A decree of permanent injunction directing the defendant to remove the impugned order dated 16.9.2015 from its website;

e. A decree of permanent injunction directing the defendant to issue a clarificatory letter to the Department of Consumer Affairs, Mr. Rohit Gupta, Multi Screen Media P. Ltd. and Mr. Vikas Mehta, Lintas India or any other person or entity whom the defendant may have communicated the order dated 16.09.2015 stating that the communication is neither an order or a direction and is not binding upon them but is an advise/ opinion of a self-regulatory body.

f. The defendant be restrained by a permanent injunction from creating impediments in the broadcast of the advertisement campaign of the plaintiff "Wires that Don't Catch Fire" including writing to the agencies of the plaintiff and/or Government authorities;

g. Pass an order of permanent injunction against the defendant thereby restraining the defendant from publicizing or informing any third party the directions contained in their email and from creating any other impediments.

h. Pass an order of permanent injunction against the defendant thereby restraining the defendant from entertaining or adjudicating upon any complaint(s) against the advertisement of the plaintiff which is the subject matter of the present proceedings;

9. Mr. Lall, learned counsel for the plaintiff has submitted that Section 2(z) (g) defines what constitutes a "well-known trade mark". He submits that the expression mark of expression "Wires that don't catch fire" of the plaintiff is a well-known trade mark as it is used in relation to the plaintiff's goods, namely wires & cables and it has become well-known to the substantial segment of the public which uses wires & cables, and on account of the said usage of the said tagline goods of others would likely to be taken as indicating a connection in the course of trade with the goods of the plaintiff. He refers to Section 11 (5) to submits that registration of a trade mark cannot be refused on the ground specified in sub-sections (2) and (3) of Section 11 unless opposition is raised by the proprietor of an earlier trade mark. He submits that no such objection has been raised to the use of the mark/ tagline in question by the plaintiff. He submits that the plaintiff satisfies the conditions for qualification of its trade mark in the said tagline as a well-known trade mark. In support of his plea that documents are capable of trade mark protection, he places reliance on a Division Bench judgment of this Court in Procter & Gamble Manufacturing (Tianjin) Company Limited Vs. Anchor Health and Beauty Care Private Limited, FAO(OS) No. 241/2014 decided on 30.05.2014 in 2014 : Indlaw Del 1931, wherein a Division Bench of this Court protected the use of the tagline "ALLROUND PROTECTION" in relation to tooth paste.

10. He has also relied on the order passed by a learned Single Judge of this Court in Skol Breweries Vs. Unisafe Technologies, MANU/DE/4096/2010 : 2010 (173) DLT 453, wherein the Court protected the plaintiff's brand "knock out" for beer. In neither of these cases, the Courts found the trade mark of the concerned party to be misleading or misdescriptive. Mr. Lall has also placed reliance on Tata Press Ltd. Vs. Mahanagar Telephone Nigam Limited & Others, MANU/SC/0745/1995 : (1995) 5 SCC 139, to submit that the right to freedom of speech & expression extends to commercial speech, and the same could not be interfered with - except by the State, only if the same is false, deceptive or misleading. He submits that the defendant not being an instrumentality of the State, has no authority to issue the impugned directions and compel the plaintiff to withdraw its advertising campaign with the tagline "Wires that don't catch fire" in relation to its cables & wires.

11. He submits that in its commercial/ cinematograph film, the plaintiff enjoys copyright which is protected under Section 14(d) (iii), i.e. the right to communicate the cinematograph film to the public. He has also taken the Court through the ASCI Regulations, which lay down the several steps that ASCI takes in case of non-adherence of its directions. He submits that the said steps taken by the defendant/ ASCI would eventually cause disruption of the advertising campaign of the plaintiff using the tagline "Wires that don't catch fire". He has also referred to the 78th Report on the Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Bill, 2015, to submit that the definition of the "commercial dispute" under clause 2(c) of the Act should be given an expansive meaning to include all commercial disputes, even though they may not strictly fall within the definition of the said term used in the Commercial Courts Act. Mr. Lall submits that since the disputes between the parties arise out of intellectual property right related to registered and unregistered trade mark and copyright, the same is a "commercial dispute" within the meaning of Section 2(c) of the Act.

12. He has also referred to Section 34 of the Specific Relief Act to submit that since the plaintiff is entitled to a legal character as the owner of the intellectual property in the tagline in question, the plaintiff is entitled to institute the suit against the defendant, as the defendant is denying and interested in denying the plaintiff's intellectual property in the said tagline. He has also placed reliance on Section 38 (3) of the Specific Relief Act to submit that the plaintiff is entitled to maintain a suit to seek perpetual injunction as the defendant has threatened to invade the plaintiff's right to enjoy its intellectual property in its trademark as contained in the tagline "Wires that don't catch fire".

13. On the other hand, the submission of learned counsel for the defendant is that the defendant is not at all concerned as to whether, or not, the plaintiff has any intellectual property in the tagline in question. The concern of the defendant is only with regard to adoption of misleading advertisement campaign by the plaintiff in relation to its wires & cables, wherein the plaintiff is using the tagline "Wires that don't catch fire". Learned counsel submits that the claim with regard to the plaintiff's wires & cables that they are "Wires that don't catch fire" is misleading by exaggeration. The said products of the plaintiff are made of fire retardant material, but the wires will burn when put in flames and to continue to burn as long as the flame is maintained by other combustible materials. According to the defendant, there is a difference between the use of the expression "do not burn" and "are fire retardant" and "do not aid in continuation of fire". Learned counsel submits that it is issuance of the direction dated 16.09.2015 which has given cause of action to the plaintiff. The plaintiff has introduced the first relief of declaration of its mark as a well-known trade mark only with a view to give the present suit the colour of being an intellectual property dispute. Since the defendant has no concern with the plaintiff's claim for intellectual property/ trademark in the tagline "Wires that don't catch fire", the plaintiff is seeking to obtain the declaratory decree - that the said trade mark is a well-known trade mark, without any serious or meaningful opposition as the defendant has no concern with the said aspect. Learned counsel submits that the issue is not whether the plaintiff has proprietary rights in the said tagline, or not, as even if it were to have proprietary rights protected as trade mark/ copyright, the impugned order of the defendant would stand on merits and the defendant cannot claim to have a right to continue to use the said tagline as a trade mark, or copyright, as it is a deceptive as to the nature of the product for which it is used.

14. Learned counsel submits that the protection enjoyed by the plaintiff in respect of the tagline under the Trademarks Act would not afford any protection to the plaintiff against breach of advertising laws. She submits that the ASCI Code is statutory. In this regard, she placed reliance on Rule 7(9) of the Cable Television Networks Rules, 1994. The same reads:

"(9) No advertisement which violates the Code for self regulation in advertising, as adopted by the Advertising Standards Council of India (ASCI), Mumbai for public exhibition in India, from time to time, shall be carried in the cable service."
15. Section 2(1) (c) of the Commercial Courts Act defines the expression "commercial dispute" to mean "dispute arising out of ". Therefore, for a dispute to be a "commercial dispute", it is essential first & foremost that there has to be a "dispute". Unless the plaint discloses a "dispute", the mere fact that the plaintiff may have sought the relief which may relate to a subject matter enlisted as clauses (i) to (xxii) of Section 2(1) (c) of the Commercial Courts Act, would not render the "dispute" arising in the suit as a "commercial dispute".

16. In the present case, as noticed hereinabove, the dispute raised by the plaintiff is in relation to the impugned communication/ direction dated 15.09.2015 issued by the defendant/ ASCI on the premise that the advertisement of the defendant using the tagline "Wires that don't catch fire" is misleading and exaggerated. The defendant has not sought to raise any challenge to the claim of trade mark or copyright laid by the plaintiff either in "HAVELLS" or in the tagline in question. Thus, no cause of action has arisen in favour of the plaintiff to assert its claim for a declaration that its mark/ expression "Wires that don't catch fire" is a well-known trade mark. As rightly argued by learned counsel for the defendant, since the defendant has not questioned the plaintiff's claim for a trade mark in the said tagline, the plaintiff cannot seek the said relief in the present suit, as the assertion of the said right would not have any real opposition. It would eventually tantamount to grant of an ex-parte decree if the said declaration is made in the present suit, as is sought in relief (a) of the plaint.

17. On repeated query by the Court, Mr. Lall candidly admitted that merely because a party may have a registered trade mark, which may even be claimed to be a well-known trade mark in a tagline, the same cannot be used in relation to the goods for which it is obtained and got registered for its mis-description of the said goods. Mr. Lall has himself drawn the attention of the Court in this regard to Section 9(2) (a) of the Trade Marks Act which provides that a mark shall not be registered as a trade mark if - it is of such a nature as to deceive the public or cause confusion. Thus, the repeated and wholesale assertions made by the plaintiff in the plaint with regard to its continuous usage of the tagline "Wires that don't catch fire" over the years in its commercials, etc. and the fact that the said tagline has a recall value for its products, namely cables & wires, is of no relevance as the only dispute raised by the defendant is with regard to the said claim - contained in the tagline, that the same is deceptive and misleading by exaggeration.

18. Reliance placed by Mr. Lall on Teleshopping (supra), Century Ply Boards (supra) and the pleas with regard to non-compliance of principles of natural justice, etc. have no relevance to determine as to whether the present suit relates to a commercial dispute. These decisions would be relevant while dealing with the plaintiff's grievance on its merits. Similarly, Procter & Gamble (supra) and Skol Breweries (supra) also have no relevance for the reason that no dispute has been raised by the defendant - which forms the basis for the cause of action, to deny the plaintiff's claim for trade mark or copyright in the tagline "Wires that don't catch fire".

19. Section 34 of the Specific Relief Act relied upon by Mr. Lall also cannot come to the aid of Mr. Lall for the reason that the defendant has not denied, and is not interested in denying the plaintiff's claim for intellectual property in the tagline in question. Similarly, the defendant has not threatened the plaintiff with invasion of its right in its intellectual property claimed in the tagline in question.

20. On a plain and meaningful reading of the plaint, it appears that the plaintiff is seeking to masquerade the present as a suit relating to intellectual property dispute, whereas the same is simply a suit challenging the action of the defendant in issuing the impugned order/ communication/ direction dated 16.09.2015, the scope of which only lies in the realm of advertising and has no concern with any intellectual property right claimed by the plaintiff. In fact, if the first relief prayed for in the suit is excluded, all the other reliefs sought in the suit by the plaintiff stem from the impugned order dated 16.09.2015 passed by the defendant.

21. The submission of Mr. Lall that this Court should construe the expression "commercial dispute" widely to include all commercial disputes, even if they do not strictly fall within clauses (i) to (xxii) of Section 2(1) (c), cannot be accepted for the reason that the Parliament has consciously given the precise definition as to what a commercial dispute "means". It is not an inclusive definition and the specific matters which qualify as relating to "commercial disputes" have been specifically set out in clauses (i) to (xxii) aforesaid.

22. For all the aforesaid reasons, I am of the view that the present suit does not raise a "commercial dispute" within the meaning of Section 2(1) (c) of the Commercial Courts Act and since the jurisdictional value of the suit is below Rs. 2 Crores, the same is liable to be transferred to the Court of the competent District Judge in view of the notification No. 2718/DHC/Orgl. dated 25.11.2015, issued under Section 4 of the Delhi High Court (Amendment) Act, 2015 (Act 23 of 2015).

23. At this stage, learned counsel for the petitioner submitted that the plaintiff shall be moving an application to amend the plaint so as to raise the jurisdictional value of the suit.

24. At request of learned counsel for the plaintiff, adjourned to 22.03.2016.


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