Critical Comment on Mahendra & Mahendra Paper Mills Ltd. v. Mahindra & Mahindra Ltd.

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Critical Comment on Mahendra & Mahendra Paper Mills Ltd. v. Mahindra & Mahindra
Ltd.

“Before the Supreme Court of India Civil

Appeal No. 7805 of 2001,
Citation: (2002) 2 SCC 147
Appellant: Mahendra & Mahendra Paper Mills ltd.
Respondent: Mahindra & Mahindra ltd.
Date of Judgement: 9th November 2001
Bench: Hon’ble Justice D.P. Mohapatra; Hon’ble Justice Shivaraj V. Patil”

Introduction
“The Mahendra & Mahendra Paper Mills Ltd. v. Mahindra & Mahindra Ltd. case has
garnered considerable attention from legal experts, practitioners, and business professionals.
This commentary provides a comprehensive exploration of this legal dispute, delving into its
background, legal contentions, and wider implications.
Fundamentally, this legal conflict revolves around a trademark dispute involving two
prominent Indian corporations: Mahendra & Mahendra Paper Mills Ltd. and Mahindra &
Mahindra Ltd. The crux of the matter hinges on the usage of the name "Mahindra," shared by
both entities, albeit with minor spelling distinctions. This shared nomenclature has given rise
to intricate legal questions pertaining to trademark infringement, intellectual property rights,
and the potential for consumer confusion.
Mahindra & Mahindra Paper Mills Ltd., a well-established figure in the paper manufacturing
sector, asserted that Mahindra & Mahindra Ltd., a leading automobile manufacturer, was
infringing on its trademark and causing market confusion. Conversely, the latter contended
that their utilization of the name fell well within their legal rights and that there was no
reasonable likelihood of consumer confusion between their automotive products and the
paper mills operated by the former.
This case received a hearing in a high court, during which both parties presented compelling
arguments substantiated by legal precedents and expert testimonies. The court's ruling in this
matter carries substantial weight, as it holds implications of far-reaching consequence for the
safeguarding of trademarks and intellectual property within India's corporate domain.
This commentary endeavors to critically scrutinize pivotal facets of the case, encompassing
the legal contentions advanced by both sides, the court's rationale behind its judgment, and

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the potential ramifications of this decision on forthcoming trademark disputes and corporate
naming conventions in India. The aim of this analysis is to illuminate the nuances inherent in
the case, elucidate its influence on intellectual property legislation, and underscore its
significance within the broader framework of legal and commercial affairs in India.”

Facts of the Case

1. The Respondent, or Plaintiff, Mahindra and Mahindra Ltd., is a company that was
founded in 1945 and has been doing business as Mahindra and Mahindra Ltd. since
1948.
2. The Mahindra group of enterprises, which also includes 15 other companies, has this
one as its flagship. Under the Act, the word "Mahindra" has been registered as a trade
mark.
3. The Appellant, the defendant business, was incorporated in 1994. Mahendra is a well-
known name that many other families in Gujarat use, thus the appellant has been
operating various enterprises under it since 1974.
4. Products from the Plaintiff and Defendants are not at all comparable.
5. When he read the prospectus issue in 1996, the Plaintiff first learned about the
defendant company and believed that the appellant was attempting to capitalise on the
respondent's goodwill by using a trade mark that was misleadingly similar to it.
6. In order to remedy this, the Plaintiff (respondent) filed the lawsuit and requested a
temporary injunction.

Procedural History of Facts of the case:

1. 1. The Single Judge prohibited the Defendant (Appellant) from utilizing the phrase
"Mahendra and Mahendra" or any similar term closely resembling "Mahindra" or
"Mahindra and Mahindra," while also granting an interim injunction in favor of the
Plaintiff (Respondent).
2. The Defendant (Appellant) lodged an appeal with the Bombay High Court, but it met
with a swift dismissal, as the Division Bench of the High Court upheld the Single
Judge's decision. As a result, the Defendant (Appellant) has taken the matter to the
Supreme Court by filing this appeal...

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Issue of the Case
Whether the High Court committed an error in granting the plaintiff’s prayer for an interim
injunction?

Appellant's Arguments
The appellant's main focus in this case revolved around how to categorize the legal issue and
evaluate consumer confusion. They argued that the case should be treated as a passing off of
goods and services rather than trademark infringement. Their key points were as follows:

 Categorization as Passing Off: The appellant contended that their case did not fit the
typical mold of a trademark infringement case. Instead, they insisted that it fell under
the category of passing off of goods and services. They stressed that passing off
involves proving that the defendant intends to mislead the public into thinking their
goods or services are associated with the plaintiff. They argued that, in this instance,
there was no resemblance between their products and those of the respondent, thus
eliminating the potential for consumer confusion.
 Use of Trade Name "Mahendra": The appellant had been using the trade name
"Mahendra" since 1974. They pointed out that this name was also used by other
entities besides the respondent. This fact suggested that the assessment of passing off
should rely on a probability test, considering the likelihood of confusion, rather than
just the mere possibility of it.
 Injustice of Interim Injunction: The appellant strongly held the view that the High
Court should have overturned the Single Judge's ruling, which had granted the
plaintiff an interim injunction. They contended that this decision was unfair,
particularly considering the absence of evidence indicating consumer confusion and
their extensive history of using the trade name "Mahendra."

In summary, the appellant contended that their case centered on passing off, not trademark
infringement, and that the evidence did not support consumer confusion, making the interim
injunction unjust.

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Respondent's Arguments
The respondents vigorously defended the legality of the interim injunction issued by the
Single Judge and argued that the High Court's decision to uphold it was justified. Their key
points were as follows:
 Attempt to Benefit from Goodwill: The respondents asserted that a comprehensive
review of the appellant's prospectus unmistakably revealed an effort to exploit the
positive reputation and goodwill linked to the name "Mahindra and Mahindra," which
was owned by the respondent. They argued that an ordinary individual would
naturally presume that the appellant had an association with the firmly established
"Mahindra and Mahindra" company.
 Impact on Share Prices: The respondents additionally claimed that the resemblance in
names had resulted in the appellant's company shares being traded at a price higher
than anticipated. This served as evidence that the public was, in fact, linking the
appellant to the renowned brand of the respondent.
 Irreparable Harm: The respondents underscored that their company had not yet begun
its operations, and the actions of the appellant could lead to irreparable harm. They
argued that the plaintiff had presented a compelling prima facie case, and refusing the
interim injunction would only worsen the potential harm to their brand and business.

In conclusion, the respondents maintained that the interim injunction was rightfully granted,
as the appellant's actions were causing harm and confusion, and they urged the High Court to
uphold this decision.

Judgment
For over half a century, the Respondent has conducted business under the banner of
"Mahindra & Mahindra." This name has gained widespread recognition and is now closely
linked to the Respondent. The use of a name resembling that of the Respondent's company
could potentially lead people to believe that the two entities are affiliated, resulting in
significant and irreparable harm to the Respondent. When the Court deliberated on whether to
grant an interim injunction, it upheld the High Court's decision and found no reason for
intervention. The appeal was dismissed, and a fee of Rs. 15,000 was imposed.
Court's Legal Reasoning
The following concept served as the foundation for the court's legal reasoning in Mahendra
And Mahendra Paper Mills Ltd. v. Mahindra And Mahindra Ltd.

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 1. Passing off: The defendant's use of the brand name "Mahendra and Mahendra" was
found by the court to be likely to mislead customers and give them the impression that
the defendant's paper mill was connected to the plaintiff's Mahindra and Mahindra
group of businesses.
2. Distinctiveness: In the Indian market, the name "Mahindra" has developed a high
level of distinctiveness, according to the court. This resulted from the plaintiff's wide
and prolonged usage of the trademark and from its standing for providing high-quality
goods and services.
3. Deceptive similarity: The defendant's use of the brand name "Mahendra and
Mahendra" was found by the court to be misleadingly similar to the plaintiff's name
"Mahindra and Mahindra." This occurred because the meaning, pronunciation, and
appearance of the two names were identical. Also, In the case of Bata India Ltd. v.
Pyare Lal & Co.,1 the High Court observed that the term "Bata" had gained
significant recognition in the market, and using such a name could potentially lead to
confusion among consumers and harm the plaintiff-company. Despite the plaintiff and
defendant being involved in different business activities, it remains possible to file a
passing-off claim in such situations.

Critical Analysis of the Judgement

“Justice Mohapatra delivered the Court's ruling, which favored the respondent, and in our
view, it was a well-considered decision. The respondent had been using the name "Mahindra
& Mahindra" in their business for more than half a century. This name had become closely
associated with the respondent, possessing a distinct and unique identity. If another individual
or organization were to adopt this name, it could have created an impression among
consumers that it was linked to the respondent, potentially causing significant harm. Given
this situation, while deliberating on the matter of the "Interim Injunction," the Court upheld
the High Court's order, finding no need for intervention. Consequently, the appeal in this case
was dismissed, and a fine of Rs. 15,000 was imposed.”

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AIR 1985 All 242

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“Justice Mohapatra arrived at this decision after examining various legal precedents that
established the foundational principles of trademark law. One of the cases considered by the
Honorable Court was Shangrila Food Products Ltd. v. Corn Products Refining Co, which
emphasized that assessing the similarity between two marks is primarily based on the initial
impression and should be viewed from the perspective of an average person with limited
memory. Additionally, in the case of Wander Ltd. v. Antox India (P.) Ltd, the Court
discussed the issue of an interim injunction under the Copyright Act and stressed the
importance of taking into account the harm suffered by both parties when determining where
the "Balance of Convenience" lies.”

It is reasonable to prevent one entity from using another's name, as doing so can potentially
harm the other party either financially or in terms of their reputation. Therefore, in order to
avoid such harm, the defendant was prohibited from using a name similar to that of the
plaintiff. It was determined that the appellate court should not intervene in the decisions of
the lower courts unless the order is arbitrary or the law has been incorrectly applied.

“In fact, in the case of Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd., the Supreme
Court established several key factors to consider before deciding an unregistered trademark
issue, such as passing-off. These factors include the nature of the marks, the level of
similarity between them, the nature of the goods, the type of customers (whether they are
well-informed or make careful purchases), the method of purchase, and any other relevant
elements based on the specific circumstances of the case. The judgment clarified that even if
the appellant and the respondent are involved in different lines of business, if their trade name
or trademark appears deceptively similar, it would still be considered "passing off."
Therefore, the court's decision to grant the interim injunction was not erroneous.”

Conclusion
The Court's decision upholds the long-standing legal maxim that, depending on the situation,
using a mark that is confusingly similar to another would either be considered infringement
or passing off. The Court also made it clear that passing-off would happen even if the two
parties to the lawsuit were operating in different business sectors but the Trade Mark or Trade
Name was deceptively similar. The Court also reaffirmed the standards by which a request
for an interim injunction is evaluated. The court ruled that before deciding where the
"Balance of Convenience" lay, the severity of each party's harm must be taken into account.

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Because it could hurt a third party, a corporation cannot be allowed to use a name that is
confusingly similar to another. In order to prevent this harm from happening, the courts issue
a temporary injunction prohibiting the defendant from using a name that is similar to the
plaintiffs until the lawsuit is finally settled.