Introduction 

• This is a landmark judgment where the Supreme Court held that passing off rights are independent and broader in scope than statutory infringement rights. 
• The Judgment was delivered by a 2- judge Bench consisting of Justice HL Dattu and Justice AK Sikri.   

Facts   

• The respondent, P. Sulochana Bai, is the registered owner of the trade mark "Iruttukadai Halwa" since 2007. 
• The respondent claims that the business of selling halwa under the name "Iruttukadai Halwa" was started in 1900 by her father-in-law, Mr. R. Krishna Singh. 
• After Mr. R. Krishna Singh's death, the business was continued by his son (respondent’s husband) until his death in 2000, after which the respondent took over the business. 
• The name "Iruttukadai Halwa" became well-known due to the shop's unique identity, including its limited working hours and the high quality of halwa sold. 
• The appellant started a similar business under the name “Tirunelveli Iruttukadai Halwa” and advertised it in a newspaper, which led to confusion among the public. 
• The respondent issued a legal notice to the appellant in July 2007 to stop using the trade mark, but the appellant refused, prompting the respondent to file a suit for declaration, injunction, and rendition of accounts. 
• The appellant claimed he had been operating a shop named "Raja Sweets" for over 40 years and later obtained registration for the trade mark "Tirunelveli Iruttukadai Halwa" in April 2008. 
• The trial court, based on evidence, ruled in favor of the respondent on the grounds that she was the prior user and had acquired goodwill associated with the name. 
• The High Court upheld the trial court’s decision, highlighting that under Section 34 of the Trade Marks Act, 1999 (TM Act), the prior user's rights take precedence over subsequent registration. 
• The High Court found that allowing the appellant to use "Tirunelveli Iruttukadai Halwa" would amount to passing off and deceiving the public. 
• The appellant argued that his shop was located 5 km from the respondent’s and that distinguishing features such as signage and packaging prevented confusion. 
• The appellant also relied on his valid trade mark registration granted by the Registrar, asserting his legal right to use the name. 
• Hence, the issue is before the Supreme Court. 

Issues Involved  

• Whether the act amounts to passing off under the TM Act, 1999? 

Observations 

• Section 27 of the TM Act, 1999 states that no action for infringement lies for an unregistered trade mark, but it preserves the common law right to take action for passing off. 
• Section 27(2) explicitly provides that the rights related to passing off are unaffected by the Act and originate from common law principles. 
• Registration of a trade mark grants the proprietor exclusive rights under Sections 28 and 29 of the Act, but these are subject to prior user rights and other provisions of the Act. 
• Section 28(3) clarifies that two registered proprietors of similar or identical trade marks cannot enforce rights against each other, but can enforce them against third parties. 
• Section 28(3) does not override the rights conferred by common law passing off actions, which remain intact due to the overriding effect of Section 27(2). 
• The remedy of passing off is based on the common law and aims to protect the goodwill of a business against misrepresentation and resulting damage. 
• The essential elements of a passing off action, as established in the “Jif Lemon” case and endorsed by Indian courts, are goodwill, misrepresentation, and damage. 
• The Supreme Court of India has reiterated that passing off rights are independent and broader in scope than statutory infringement rights. 
• It is a settled legal principle that trade mark registration only recognizes pre-existing common law rights and does not create new rights. 
• In the case at hand, the respondent proved through evidence that the trade mark “Iruttukadai Halwa” has been used by her family since 1900 and has gained significant goodwill. 
• The name “Iruttukadai Halwa” has become widely recognized not just in Tirunelveli, but across India and even abroad, due to the respondent’s business. 
• Based on these findings and the application of legal principles, the court upheld the respondent’s rights and dismissed the appeal filed against her. 
• The appellant was directed to pay Rs. 50,000 as costs to the respondent. 

Conclusion 

• The Supreme Court reaffirmed that passing off rights are rooted in common law and override statutory registration.  
• Prior user rights were upheld, protecting the goodwill built over generations.