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Official Citation: 2024 SHC 455
Court / Jurisdiction: Sindh High Court
Petitioner: M.A. 182/2024 (S.B.) Sindh High Court, Karachi - CSM Pakistan (Guarantee) Limited (Appellant)
Ruling Summary: This decision was rendered by the Sindh High Court, officially reported as 2024 SHC 455. In this matter between M.A. 182/2024 (S.B.) Sindh High Court, Karachi - CSM Pakistan (Guarantee) Limited (Appellant) and the Respondent, the court adjudicated key questions of statutory construction, procedural regularity, and legal precedent under Pakistani law.
Core Holding: The honorable bench evaluated governing statutory provisions and judicial authorities to establish the rights of the parties, delivering the binding reasoning set out below.
COURT: Sindh High Court CASE NO: M.A. 182/2024 (S.B.) Sindh High Court, Karachi CITATION: 2025 SHC KHI 455 PARTIES: CSM Pakistan (Guarantee) Limited (Appellant) ORDER DATE: 07-APR-25 BENCH: Hon'ble Mr. Justice Muhammad Jaffer Raza(Author) A.F.R: Yes ------------------------------------------------------------ 1
Judgment sheet IN THE HIGH COURT OF SINDH AT KARACHI Miscellaneous Appeal No. 182 of 2024 Present Mr. Justice Muhammad Jaffer Raza
CSM Pakistan (Guarantee) Limited Versus Kresta Corp. Appellant : CSM Pakistan (Guarantee) Limited, through M/s. Hanya Haroon and Alizeh Mehak Advocates.
Respondent : Kresta Corp., through Mr. Kazim Raza Abbasi Advocate.
Date of Hearing: 17.03.2025
Date of announcement: 07.04.2025
J U D G M E N T
MUHAMMAD JAFFER RAZA – J: The instant Miscellaneous Appeal has been filed against the Impugned Order dated 31.08.2024 passed in Suit No.52/2018, under Section 19 of the Intellectual Property Act, 2012 (‘Act’) whereby plaint of the above suit was rejected under Order VII Rule 11 CPC , on an application preferred by the Respondent . Facts of the case are summari sed as follows: -
2. Suit No.52/2018 was filed by the Appellant before the Intellectual Property Tribunal, Karachi with the following prayers: - “That the Plaintiff respectfully prays for: i. A decree in favor of the Plaintiff and TV defendant granting Permanent Injunction restraining the Defendant, their agents, suppliers, affiliates, distributors, employees, or representatives from using the trademark EXTASY PLUS or KLIMAX EXTACY and or any name/logo/trademark similar to that or having the tendency to cause confusion or deception in the minds of the consumer alone or in conjunction to/with any other mark in any variation whatsoever.
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ii. A decree in favor of the plaintiff directing defendant to su bmit a detail account of profit made through advertisement and other digital commercial activities while using the imitated trademark EXTASY or KLIMAX EXTASY. iii. Directing the Defendant to submit to the Plaintiff, or destroy in the Plaintiff's presence, all s tocks, signage and promotional materials and/or all those products that bear the XTACY Packaging and Trade dress or any similar or close variation, thereof in any manner whatsoever. iv. Any other relief or reliefs which this Honorable Tribunal deem fit and proper under the circumstances of the case. v. Cost of suit.”
3. An application was also filed along with the above suit under Order XXXIX Rules 1 & 2 CPC which was dismissed. No further discussion is required as the same is not the subject matter of th e inst ant appeal. Thereafter , an application was filed by the Respondent under Order VII Rule 11 CPC and the same was allowed vide Impugned Order dated 31.08.2024. 4. It has been argued by learned counsel for the Appellant that the learned Intellectual Property Tribunal of Sindh (“Tribunal”) has adjudicated the case on merits and deliberated in the Impugned Order, the entire controversy between the parties. T he same , it was argued, is beyond the scope of Rule 11 of Order VII CPC. Learned counsel has also contended that an elaborate deliberation regarding the similarit ies and difference s between the respective Trademarks was unwarranted and impermissible . Further it was argued that the learned Tribunal has gone into the merits of the case and the same canno t conceivably be grounds for rejection of plaint. The learned counsel has argued that reliance by the learned Tribunal on Section 81 of the Trademark Ordinance, 2001 (‘Ordinance’) is misconceived and the same cannot be a ground for rejection of plaint. It is argued that the “date of knowledge ” required evidence to be recorded and the same cannot be adjudicated in a summary manner. It has also been argued by the learned counsel for the Appellant that the Tribunal has considered in detail the written statement filed by the Respondent and has therefore gone over and above the scope of the noted provision . Lastly , learned counsel has stated that the
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Impugned Order is essentially a judgment on merits, which is not permissible under the provision of Order VII Rule 11 CPC. 5. Conversely learned counsel for the Respondent has argued that plaint is liable to be rejected and has supported the Impugned Order. He has argued that the “Trade Dress” of the Appellant was not registered and therefore no cause of action accrued to the Appellant. He further contended that there is concealment of facts by the Appellant because marketing/selling of the Respondent’s product s was in the knowledge of the Appellant and hence the plaint , as filed, is liable to be rejected. He has further argued that both the contesting parties are involved in the same line of business and it is inconceivable that the Appellant ha d no knowledge about the Respondent’s operation. Further it has been contended by the learned counsel for the Respondent , that the Respondent has been producing, marketing and selling the products since the year 2011 and therefore the provision of Section 81 of the Ordinance of 2001 shall be applicable thereto. He has further averred that the Appellant has made false and misleadi ng claims and the slogan claimed by the Appellant, is owned by the Respondent , as the same is an integral part of the Respondent’s trademark. Learned counsel in this regard has also referred to sales invoices from 2011 to 2023 to show the long standing, co ntinuous use of trademark in the market. He has further contended that the Appellant failed to produce a single document to prove the alleged use of the trademark and the assertions of the Appellant are unsubstantiated and false. Lastly, he has argued that the Appellant failed to disclose the reply of the legal notice dated 23.07.2018 wherein the Respondent clearly informed the Appellant regarding the trademark on the basis of which the plaint was rightly rejected. 6. I have heard the l earned counsel s and perused the record. The law pertaining to Order VII Rule 11 CPC, was elaborately laid down in the case of Haji Abdul Karim v. M/s. Florida Builders Pvt. Ltd 1 and it is on those principles that the instant Miscellaneous Appeal shall be adjudicated. Relevant
1 PLD 2012 SC 247
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parts of the judgment are reproduced below: - 8. At this stage it would be appropriate to carry out an analysis of Order VII, Rule 11oftheCodeofCivilProcedure1908. The said provision is reproduced below: "(11) Rejection of plaint. ---The plaint shall be rejected in the following cases: (a) Where it does not disclose a cause of action. (b) Where there life claimed is under -valued, and the plaintiff, on being required by the Court to correct the valuation within a time to be fixed by the Court, fails to do so; (c) Where the relief claimed is properly valued, but the plaint is written upon paper insufficiently stamped, and the plaintiff, on being required by the Court to supply the requisite stamp -paper within a time to be fixed by the Court, fails to do so; (d) Where the suit appears from the statement in the plaint to be barred by any law. This is an important provision of law which has often been construed in a wide -ranging series of cases. The interpretation applied thereto falls within a wide spectrum and some of the important case -law will be examined by us at a later stage. Prior to doi ng so, however, it is important to carry out an analysis of the precise language used in the statute. The salient features contained in the provision are the following; (i) The words used are "rejection of plaint". In other words the legislature has deliberate ly refrained from providing that the suit should be "dismissed". A distinction has thus been drawn between a dismissal of a suit and the rejection of a plaint and it is this distinction which needs to be elucidated. (ii) The opening words indicate that it is mandatory on the court to reject the plaint if one or more of the four clauses is found to be applicable. This is made clear by the use of the word "shall" in the opening phase. (iii) The first clause need not detain us for long since it contains a clear statement that in case the plaint does not disclose a cause of action it is to be rejected. The next two clauses, namely, clauses (b) and (c) relate to the valuation of the plaint and the stamp duty to be affixed thereon and again do not require much discussion. It is the last clause, namely (d) In relation to which most of the litigation has taken place. It is this, therefore, which requires a careful analysis. (iv) Clause (d) has three constituent elements. The first part uses the important word "appears", the second part relates to statements madein the plaint, (i.e. there is no reference to the written statement) and the third part states the inference to be drawn if a suit "appears" from the statement in the "plaint" to be "ba rred" by any law. This read in conjunction with the opening words of Rule 11 make it mandatory on the court to reject the plaint. Right at the inception it needs to be stated clearly that Order VII, Rule 11, C.P.C. cannot be properly construed in isolatio n. In order tounderstand the theory of law underlying it reference has to be made to its complementary provision, namely, Order VII, Rule13, C.P.C. which is reproduced below: --
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"13. Where rejection of plaint does not preclude presentation of fresh plaint.--- The rejection of the plaint on any of the grounds hereinabove mentioned shall not of its own force preclude the plaintiff from presenting a fresh plaint in respect of the same cause of action."
Rule 13 states the consequence of the rejection of the plaint. It is, in brief, to keep the right of the plaintiff alive to present a fresh plaint even if based on "the same cause of action" notwithstanding the rejection of the plaint. This is a distinctly unusual provision. It will be seen immediately that this marks a clear distinction from the provisions of section 11, C.P.C. which not merely imposes a legal baron an unsuccessful plaintiff but actually takes a way the jurisdiction of the court to try any suit or issue in which the matter directly or substantially in issue has also been in issue in a former suit between the same parties litigating under the same title in a court of competent jurisdiction which ha s been "heard and finally decided". This is of course the well known principle of res judicata which is one of the foundational principles of our procedural law. It follows that in Order VII, Rule 11 read with Rule 13 the concept of rejection of a plaint isclearly distinct from that of a suit which is decided and disposed of inthe normal course by a court of competent jurisdiction after recording evidence. The question which therefore arises is, what is the reason for this distinction and why has it been created? What has to be determined is, firstly the exact scope and ambit of Order VII Rule 11, and secondly, the effect of an order passed rejecting the plaint in accordance therewith. 9. We have already noticed that the c ourt is bound by the use of the mandatory word "shall" to reject a plaint if it "appears" from the statements in the plaint to be barred by any law. What is the significance of the word "appears"? It may be noted that the legislative draftsman has gone out of his way not to use the more common phraseology. For example, in the normal course, one would have expected that the language used would have been "where it is established from the statements in the plaint that the suit is barred b y any law" or, alternatively, "where it is proved from the statement in the plaint that the suit is barred by any law". Neither of these alternatives was selected by the legislative draftsman and it must be assumed that this was a deliberate and conscious decision. An important inference can therefore be drawn from the fact that the word used is "appears". This word, of course, imports a certain degree of uncertainty and judicial discretion in contradistinction to the more precise words "proved" or "establi shed". In other words the legislative intent seems to have been that if prima facie the court considered that it "appears" from the statements in the plaint that the suit was barred then it should be terminated forthwith. The great advantage of this would be twofold: -- (a) On the one hand the defendant would be saved from the harassment of being subjected to a prolonged and costly trial including the leading of evidence which could be extended over a considerable period of time. Secondly, a great deal of valua ble court time would also be saved from being wasted. This second consideration is of special importance considering the extent to which the courts are at present clogged with an enormous amount of arrears. Thus the idea, in brief, would be to bury the suit at its inception. This therefore, appears to bethe rationale for the use of word "appears" as against the more strong words "established" or "proved". A further reason why the latter words have not been used is, of course, that normally they would be used if evidence had
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been recorded. That would then be a definitive finding by the court based on evidence and after examination of the lawin the light thereof. (b) At the same time we have to consider the matter from the other point of view as well. It is importa nt that injustice should not be caused to a plaintiff merely because, for example, of defective drafting in the plaint. No irretrievable loss should be caused to a plaintiff in the event of a plaint being rejected merely on the basis that it "appears" to b e barred. It is for this reason that the legal status of rejection of a plaint has not been equated to that of a judgment and decree given after the recording of evidence. In the latter case section 11 and the principle of res judicata become applicable whereas in the present case that principle has been expressly excluded by the provisions of Order VII, Rule 13. It needs to be emphasized that the languageofRule13isexplicitinclarifyingthatafreshplaintcanbe filed in respect of the very same cause of action in relation to which the plaint was earlier rejected. This interpretation reconciles the language of Rule 11 and Rule 13 with that of section 11 of the C.P.C. by providing a valid rationale for the differen tiation. A further pointer in the same direction is to be found if the definition of decree contained in section 2, C.P.C. is taken into account. In common practice the words judgment and decree are often used more or less synonymously. However, these two concepts are completely distinct in terms of clauses (2) and (9) of section 2, C.P.C. Clause 9 defines a "judgment" as meaning merely the grounds given by a judge for arriving at the conclusion embodied in a decree. (Emphasis added)
7. The Honourable Cou rt before parting with the judgment laid down clear and unambiguous guidelines in paragraph number 12. The same are reproduced below: - “12. After considering the ratio decidendi in the above cases, and bearing in mind the importance of Order VII, Rule11, we think it may be helpful to formulate the guidelines for the interpretation thereof so as to facilitate the task of courts in construing the same. Firstly, there can be little doubt that primacy, (but not necessarily exclusivity) is to be given to the contents of the plaint. However, this does not mean that the court is obligated to accept each and every averment contained therein as being true. Inde ed, the language of Order VII, Rule 11 contains no such provision that the plaint must be deemed to contain the whole truth and nothing but the truth. On the contrary, it leaves the power of the court, which is inherent in every court of justice and equity to decide or not a suit is barred by any law for the time being in force completely intact. The only requirement is that the court must examine the statements in the plaint prior to taking a decision. Secondly, it is also equally clear, by necessary infe rence, that the contents of the written statement are not to be examined and put in juxtaposition with the plaint in order to determine whether the averments of the plaint are correct or incorrect. In other words the court is not to decide whether the plaint is right or the written statement is right. That is an exercise which can only be carried out if a suit is to proceed in the normal course and after the recording of evidence. In Order VII, Rule 11 cases the question is not the credibility of
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the plaintiff versus the defendant. It is something completely different, namely, does the plaint appear to be barred by law. Thirdly, and it is important to stress this point, in carrying out an analysis of the averments contained i n the plaint the court is not denuded of its normal judicial power. It is not obligated to accept as correct any manifestly self -contradictory or wholly absurd statements. The court has been given wide powers under the relevant provisions of the Qanun-e-Shahadat. It has a judicial discretion and it is also entitled to make the presumptions set out, for example in Article 129 which enable it to presume the existence of certain facts. It follows from the above, therefore, that if an averment contained in the plaint is to be rejected, perhaps on the basis of the documents appended to the plaint, or the admitted documents, or the position which is beyond any doubt, this exercise has to be carried out not on the basis of the denials contained in the written state ment which are not relevant, but in exercise of the judicial power of appraisal of the plaint.”(Emphasis added)
8. Prior to applying the principles set out above it will be expedient to reproduce excerpts of the Impugned Order. The same are reproduced below: - “It is pertinent to mention here that as per documentary evidence proof as annexure H & H/1 of plaint & annexure annexed with written statement the trademark, trade dress of plaintiff & the defendant are dissimilar with each other as the backgroun d of both products i.e. xtacy & extacy plus are different i.e. Grey & Black whereas on the front side of Plaintiff’s product is with the trade name “xtacy” having x in grey color in middle ground but the front side of Defendant product is with the trade na me i.e. extacy plus having x with black color in middle ground and is also the dis-similarity in visualizing both the products as well as on the left side on the front of packing of trademark XTACY of Plaintiff’s products there are three vertical lines of different size with orange color and such vertical lines are very distinguished along with alphabet "a" of xtacy filed with orange color as the products of defendant has not such type of vertical or horizontal lines. It is pertinent to mention here that it is also the dissimilarity in the size of alphabets of xtacy & extacy plus and the product of defendant i.e "Klimax Xtacy" and on such product the word KLIMAX has been shown with capital letters and under it extacy printed with the calligraphic the letter/alphabet "E" with orange color and the said products of defendant are with registered mark and are not similar with the product of plaintiff It is pertinent to mention here that according to the record the defendant applied for registration of such tradema rk in the year 2011 and prior to registration of it, it should be published in the journal in terms of section 28 of the trademark ordinance but no any objection was raised by the plaintiff side so it was registered, which shows that being the defendant as registered
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proprietor of the trademark & copyright, the defendant is using such mark legally. It is pertinent to mention here that at the time of filing this suit the plaintiff was aware about the registration of the defendant trademark & copyright regist rations as the plaintiff has sent the legal notice to him as per annexure A/4 of written statement which was also replied by the defendant annexed with annexure A/4 of written statement with mentioning the contents in para No.4 & 8 that the Defendant has t heir proprietary rights on the copyright for their mark by registration nof its style, getup & color scheme and they retain all rights to use the same with de further submission that the plaintiff was awared for their such mark when it was advertised in th e trademark journal No. 745 prior to acceptance & registration but the Plaintiff did not disclose the same in the averment of plaint which shows that the Plaintiff side deliberately concealed the facts only to get the benefit from the Court. It is also per tinent to mention here that the product of defendant with disputed trademark was also available in the market in the year 2011 as per sales tax invoices as annexure A/3 of written statement which was into the knowledge of plaintiff being running the same b usiness of the products of defendant and the said sales tax invoices as annexure A/3 of written statement shows the development, stability & turn over of the business of defendant for the year 2011 and by the passage of time the defendant also got register ed such disputed trademark with copyright registration as per registration certificate of trademark and copyright as annexure A/1 & A/2 of written statement but no any action was taken at that time i.e 2011 and filed this suit after about i.e 07 years… So in light of such relevant provision of law u/s 81 of trademark ordinance the right of plaintiff has also been ceased for having any entitlement on the basis of its earlier trademark to oppose the use of the later trademark of defendant in relation to the products or services, for which it is used.”
9. This detailed deliberation on facts, which were otherwise disputed between the parties, was adjudicated on an application under Order VII Rule 11 CPC and it is held that the same could only have been adjudicated after recording of evidence. The detailed comparison and assessment of the similarities and differences between the competing products was therefore unwarranted and beyond the scope of the noted provision. It is apparent from the perusal of the Impugned Order, relevant excerpts of which have been reproduced above, that the learned Tribunal went into details regarding the merits and demerits of the Appellant’s claim and
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embarked on an impermissible exercise comparing the similarity and differences of both competing products. The learned Tribunal, with respect, has failed to appreciate the clear distinction between a “rejection” and a “ dismissal” and the learned Tribunal has for all intents and purposes, dismissed the suit of the Appellant. 10. It is also note worthy that the learned Tribunal has also given a finding regarding the “awareness” of the Appellant regarding the existence of the Respondent’s Trade Mark and Copyright, without recording any ev idence. The finding of the learned Tribunal regarding the Appellant ’s “deliberate concealment” is also unfounded as the parties in this respect had not led any evidence. Learned Tribunal relying on Section 81 of the Ordinance has implicitly held that the Appellant acquiesced to the use of the Trade Mark by the Respondent. At this juncture it will be advantageous to reproduce Section 81 of the Ordinance: - “Effect of acquiescence .- (1) Where the owner of an earlier trade mark, or other earlier rights, has acquiesced for a continuous period of five years from the date of registration in the use of a registered trade mark in Pakistan, being aware of that use, there shall cease to be any entitlement on the basis of that earlier tra de mark or other right- (a) to apply for a declaration that the registration of the later trade mark is invalid; or (b) to oppose the use of the later trade mark in relation to the goods or services in relation to which it has been so used, unless the regi stration of the later trade mark was applied for or used in bad faith. (2) Where sub -section (1) applies, the proprietor of the later trade mark shall not be entitled to oppose the use of the earlier trade mark or, as the case may be, the exploitation of t he earlier right, notwithstanding that the earlier trade mark or right may no longer be invoked against his later trade mark.”
11. There is a dearth of case law on the above noted provision. However, a bare reading of Section 81 of the Ordinance indicates that the burden to prove the date of knowledge and acquiescence, atleast at the outset, is on…
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