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Petitioner: Messrs HUB PAK SALT REFINERY through Duly Authorized Partner VS Respondent: NATIONAL FOODS (PVT.) LIMITED
Court Name: Sindh High Court Judge(s): Khalid Ali Z. Qazi Title:Messrs HUB PAK SALT REFINERY through Duly Authorized Partner vs NATIONAL
FOODS (PVT.) LIMITED Case No.:Suit No,1339 of 2007 Suit No,635 of 2001 C.M.As. Nos.9084, 8633, 9946, 10085, 10086, 10087, 10088, 10089, 10090, 10091 and 10157 of 2007 M.As. Nos.9084, 8633, 9946, 10085, 10086, 10087, 10088, 10089, 10090, 10091 and 10157 of 2007 Date of Judgment:2008-01-03 Reported As: 2008 CLD 190 Result: Application dismissed Judgment ORDER ' KHALID ALI Z. QAZI, J.---This is an application C.M.A. No,8633 of 2007, filed by the plaintiff, under Order XXXIX, Rules 1 and 2 read with section 151, C.P.C., which is reproduced as under:-- "For the reasons elucidated in the accompanying affidavit, viewed in conjunction with the facts, reasons and grounds set forth in the plaint and the documents annexed thereto, and in view of the fact that the actions being threatened and proposed by the defendant following the actions taken will cause irreparable loss to the plaintiff firm, it is humbly prayed that this Honourable Court may be pleased to restrain the defendant or any person(s) acting through, under or on behalf of the defendant from threatening or taking any coercive action and from interfering in any manner whatsoever with the dealings, affairs and contractual relations' of the plaintiff with the television channels airing the advertisement for the plaintiffs salt, other than through a Court in due process of law." ' Urgent ad interim orders are respectfully solicited." ' Brief facts of the plaintiffs case as per plaint are that the plaintiff is a partnership -firm registered under the Partnership Act, 1932, and has extensive expertise in the salt business and is engaged in the processing and production of high quality refined salts of various grades and types at its plant situated with the Hub Industrial Trading Estate in Baluchistan, which, in keeping with the plaintiffs unwavering commitment to quality and firm emphasis on acting in a socially responsible manner is specifically designed so as to be environmentally friendly and is perhaps the only industrial
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"plant in Pakistan to have achieved zero liquid discharge.' It is further contended by the plaintiff that the plaintiff is ISO 90012000 and HACCP certified and even otherwise the plaintiffs commitment to quality is duly evinced by the fact that the plaintiff is the only indigenous supplier of salt to the pharmaceutical sector they are needless to say only the salt conforming to the most exacting purity standards is utilized. It is further contended that the plaintiff has just recently entered the consumer market for food grade salt with the launch of Its fine grain edible salt in 2006 under the brand "Hub Salt". It is further contended that PDV or pure vacuum dried salt, which is the product of a vacuum evaporation process carried out by the plaintiff at its state of the art plant especially imported from Switzerland and designed to produce salt with 99.99 per cent of sodium chloride content. It is further contended that the plaintiff is the solitary manufacturer in Pakistan utilizing the same to date, and as .Such it follows a priori that the plaintiffs salt is presently the only domestically manufactured salt that is residue free. It is further that the domestically produced salt otherwise marketed by suppliers as edible salt, is invariably ' simply washed and the insoluble impurities .Present cannot be completely removed. It is contended that. The insoluble impurities that are present in the salt in such cases are bound to have an adverse effect upon human health when consumed regularly over a prolonged period. Furthermore, when salt is crystallized in, open solar evaporators in salt pits near the sea side or open lakes in desert areas the same is subject to further contamination as such areas are accessible to stray animals. It is further contended that, for the purpose of advertisement and promotion an advertisement was conceived wherein it was stated inter alia for the benefit of the consuming public in the ensuing television commercial that the plaintiffs salt was the only such product that was completely free Of residue and it was demonstrated as to how the claim may be put to the test vide a simple controlled experiment where four spoonful's of any of the consumers existing kitchen salt may be dissolved in a beaker of water, following which the same test should be similarly repeated with the plaintiffs salt so as to make a , readily comprehendible comparison as to the insoluble impurities present in the former and conspicuously absent from the latter. It is contended that this exercise was carried out with recourse to the broad term "aap kay kitchen ka namak" and a generic pack of salt bereft of any trademarks or any work in which the copyright may be held by the defendant or any other person. The defendant products were never shown during the course of the subject advertisement other than for a scintilla of a moment while placed on a supermarket shelf amidst similar available products of the particular genre. It is contended that this momentary glimpse is so fleeting that it is not possible to register the existence of the defendants products, unless the footage of the subject advertisement is scrutinized in slow motion for the specific purpose. It is further contended that the subject advertisement merely highlighted a positive attribute of the plaintiffs salt and did not denigrate any particular product whether of the defendant or other supplier, the defendant has nonetheless taken umbrage to the same on the misplaced ground that it infringes the defendant's copyright and defames its products marketed as "National Refined Table Salt" and "National Refined Iodized Salt" and has served a legal notice dated 1-10-2007 the subject notice) upon the plaintiff through its legal counsel to that effect, which has been replied to by the plaintiffs counsel vide a letter dated 9-10-2007. It is contended that the subject notice is patently vexatious and misconceived and the same has not been confined in its scope and application to the plaintiff alone and was also specifically addressed to the advertising agency engaged by the plaintiff i,e, Manhattan Communications (Pvt.) Limited as well as various television channels i,e, Hum TV, Star Plus and World call Telecom Limited from Pakistan Electronic Media Regulatory Authority, and stringent civil and criminal action was unwarrantedly threatened separately against each entity. It is further contended that it is apparent that the defendant simply perceives the education of the consuming public per se to be a threat to its virtually monopolistic hold over the branded salt market and it is submitted that the defendant has accordingly addressed the television channels
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carrying the subject advertisement in most threatening terms not so much out of any conviction as to' the averments, contained therein as such as with the ulterior motive of coercing and intimidating the said television channels and thereby preventing the airing of the subject advertisement, thus effectively stifling the plaintiffs business. It is contended that the allegations levelled against the plaintiff in the subject notice are completely unfounded and bereft of substance having been aired by way of a pretext as part of what is an obvious ploy to .Gain the commercial and pecuniary advantage against the plaintiff through obvious threats of false implication and prosecution against the plaintiffs media partners. It is contended that the television channels airing the subject advertisement would obviously have no desire to be embroiled in what they will no doubt perceive-as a dispute inter se the plaintiff and the defendant and it is apprehended that being intimidated by the size and influence of the defendant they will accordingly summarily cease to broadcast the subject advertisement. It is submitted that it is already transpired in the case of Worldcall Telecom Limited vide their letter dated 5-10-2007 (received by the plaintiff towards close of business hours on 6-10-2007) that in view of the subject notice they are ceasing to air the subject advertisement forthwith. The plaintiff already stands prejudiced vide the untimely loss of this valuable media resource at a nascent stage in its venture in the edible salt market, which has been exacerbated by the fact that the Ramadan period in the buildup to Eid is always a' pivotal juncture from the marketing standpoint, particularly in the food industry. It is further stated that plaintiff has also been informed by its advertising agency that the other channels addressed in terms of the subject notice have also very recently been in contact with the said agency and expressed their reservations regarding the further broadcasting of the subject advertisement in view of the subject notice and further approaches that have apparently been made to them directly by the defendant, in order to procure the termination of their arrangements with the plaintiff. As such, "it is genuinely apprehended by the plaintiff that remained unchecked, the defendant would almost certainly abuse its position as a well established consumer oriented, company advertiser in order to carry on its policy of coercive persuasion in order to bring about the suspension of the subject advertisement by the television channels addressed in terms of the subject notice as well as such other channels through which the same is being aired. It is further contended that it is genuinely apprehended by the plaintiff that the defendant will further perpetuate its campaign of threats and intimidation to the detriment of the plaintiff without ever invoking the jurisdiction of any Court, thus resulting in irreparable loss to the plaintiff, and is liable to be permanently restrained in that regard. ' In reply the defendant has filed counter-affidavit of Abrar Hasan duly authorized and constituted attorney of the defendant. It is pleaded by the defendant that the declaration prayed for is barred under sections 12, 42 and 56 of Specific Relief Act. It is pleaded that in order to obtain interim relief the plaintiff has come before this Court with unclean hands and not only misrepresented and falsely stated facts available on record before this Court but as admittedly patent from the record, has also violated the Copyright Ordinance, 1962 and Defamation Ordinance, 2002 as well as Pakistan Penal Code. It is further contended that the plaintiffs acts amount to unfair trade practice, false advertising and taking unfair advantage of the reputation of the distinguishing mark of a competitor and hence violates the Trade Marks Ordinance, 2001, Sindh Consumer Protection Ordinance thus, disentitling the plaintiff to any relief before this Court. It is contended that the plaintiff is liable not only to civil liability toward the defendant but is criminally liable under the law and is the admitted infringer of intellectual property rights, perpetrator of Defamation and in violation of several offences under Pakistan Penal Code, hence the plaintiff is not entitled to any discretionary or equitable relief nor the grant of interim relief. It is contended that plaintiff has misrepresented the facts of the case and has. Disclosed incorrect and incomplete facts before this Court with the intention to mislead this Court and thus is liable to be dismissed at its outset. It is
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further pleaded that the plaintiff has no cause of action, nor has any cause of action with any basis of law been prayed by the plaintiff and hence the plaint is liable to be rejected. It is further pleaded that the plaintiff has not made out a prima facie case nor has the plaintiff incurred irreparable loss and hence the ground for interim relief not having been met, the plaintiff is not entitled to any interim relief. It is further contended that the relief prayed for in the application by the plaintiff is the final relief, as prayed in the suit and as such the same cannot be granted. It is further contended that the plaintiff has admitted in paragraph-9 to the supporting Affidavit of the application under Order XXXIX, Rules 1 and 2, C.P.C. That the plaintiff did in fact reproduce and infringe the Copyright of the defendant thereby admitting the violation under Copyright Ordinance, 1962 and hence the suit is liable to be disposed of /dismissed under Order XII,C.P.C. It is further contended that since the dispute and cause of action arise under Copyright Ordinance, 1962, the appropriate forum having jurisdiction to entertain this matter would be the District Court as required under the law. It is contended that suit plaint has been instituted without any proper authority and no partnership deed has been filed. The suit and plaint have not been duly instituted in accordance with law by all the partners to the alleged partner Ship. It is further submitted that the contents of the application, under reply are incorrect, both on facts as well as the law. It is submitted that the alleged dispute between the parties partially concerns infringement of the defendant's copyrighted packaging material of its salt product namely National Refined Table Salt and partially pertains to defamatory statements being made against the said product. It is further submitted that the plaintiff intentionally infringed the Copyright of the defendant's packaging shown in the Offending Advertisement clearly infringes and reproduces the copyrighted layout, design and art work of the defendant. Photocopies of one of the infringing shots in the Offending Advertisement is attached as "A" and copyright registration in favour of the defendant is attached as "B" to the counter-affidavit. It is further contended that the plaintiff is publicly making Defamatory statements with regards to the defendant's product. The Offending Advertisement falsely states that the defendant's product is harmful for human consumption. The defendant's product and its contents/ specifications are more than compliant with the West Pakistan Pure Food Rules, 1967 and the Codex International Standards. Photocopy of the relevant provisions of the Pure Food Rules and codex international .Standard and the Laboratory tests of the defendant's product by PCSIR are attached as Annexures C, D, E respectively. It is contended that the said product of the defendant is also approved from the Nutrition Division, National Institute of Islamabad as evident by the Analytical Report issued by the Nutrition Division, National Institute of Health dated 17-11-2007, clearly classifying the defendant's product to be "Satisfactory". Photocopy of the Analytical Report is attached as Annexure F. It is further stated that the plaintiff, has falsely stated that their product is "residue free" and "pure". The plaintiffs product admittedly contains insolubles and residues, which fact is admitted by the plaintiff on its packaging. It is contended that the .Plaintiffs 'product is not pure sodium chloride but as admitted on its packaging includes a number of additives and ingredients and is hence, by no means "pure". Moreover, the falsity of the plaintiffs statements is evident from the -laboratory tests conducted by the PCSIR dated 19-11-2007. Photocopy of the specifications on the packaging on the plaintiffs packaging and the Laboratory tests of the plaintiffs product by PCSIR are attached as Annexures and H. It is further contended that the plaintiffs products have been tested by the International Salt Research Institute are mala fide, fraudulent, false and baseless since no-such Institute exists as shown in the Offending Advertisement. Photocopy of the search on Google showing that no such Institute exists is attached as annexure I. It is pleaded that the plaintiff has made fraudulent and false representations and themselves been in flagrant violation of the Copyright Ordinance, the Defamation Ordinance and the Pakistan Penal Code. In addition, such act by the plaintiff amounts to unfair trade practice, false advertising and taking unfair advantage of the reputation of the distinguishing mark of a competitor and hence violates
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the Trade Marks Ordinance, 2001, Sindh Consumer Protection Ordinance thus, disentitling the plaintiff to any relief before this Court. It is further contended that the contents of para.'2 of the plaint are denied in its entirety unless specifically admitted. It is further contended that plaint does not establish any cause of action against the plaintiff and neither does the plaintiff have a prima facie case nor is the balance of convenience in the plaintiffs favour. The representations made by the-plaintiff as to the quality of its salt product are denied and the plaintiff is put to strict proof in relation to the same. The plaintiff is not the sole indigenous supplier of salt and neither is the plaintiff the only salt manufacturer conforming to the most exacting purity standards. The defendant's salt product has been tested by the PCSIR Laboratories which has determined its compliance with specifications laid down by the West Pakistan Pure Food Rules, 1967. In reply to the contents of Para.4 defendant denied with exception of the fact that the plaintiff has just entered into the salt market. This admission proves that the plaintiff does not have an existing consumer base and as such could not have suffered any loss as falsely prayed in the suit. It is submitted that the defendant is the manufacturer as well as the producer, distributor and exporter of various edible items inclusive of the said product. The defendant has been involved in the production of the said product since 1992 and the said product is in compliance to the prevailing industrial standards and specifications for salt products. It is further denied by the defendant that there is no proof nor has any been tendered by the plaintiff that P.V.D. Has become the legally acceptable standard for edible salt. There is also nothing on record to show, nor any evidence tendered, that ' indicates that the defendant's product is not of an acceptable standard. In fact, as mentioned above, the defendant's product is of an internationally acceptable standard as well as the relevant national standard. The vacuum evaporation process referred to by the plaintiff is not the sole method whereby salt can effectively be rendered residue free nor is it the only acceptable standard for salt products. The defendant utilizes the washing and cleansing process, for rendering the said product free of residue in accordance with the national and international standards. The National Foods Refined Table Salt is totally safe for human consumption, as it is prepared with the raw salt after a thorough washing and cleansing process. Raw salt is initially cleaned from any undesirable or foreign material further separators are installed which ensure removal of any iron particle if present. It is further submitted that the salt is grinded into a required particle size and then a full length washing cycle is carried out. Salt is washed till the required excellent quality product is attained. The quality parameters are strictly followed in order to ensure that each and every aspect of West Pakistan Pure Food Rules is being monitored closely and the final product in compliance with Pakistan Pure Food requirements. It is further contended that Silicone dioxide is added, which is also approved by West Pakistan Pure Food Rules, to the level of 1%. This ingredient is perfectly safe for human body and is allowed to be used in USA in all food stuff to about 2%. Similarly, the plaintiffs product also has several other additives and non-sodium chloride (salt) content. The contents of Para.6 are also denied by the defendant and contended that the simple test in any kitchen will show that once the. Plaintiff s salt is dissolved in water, it too leaves residue that is visible to human eye. In any case this is not the correct or scientific manner, in order to judge or test the acceptability or legal compliance of the salt. A Laboratory test is the only acceptable and correct method which, as shown above, completely contradicts the statements and representations of the plaintiff in the Offending Advertisement and in the suit and the Affidavit. It is further contended that the plaintiff has admitted that their entire cause of action is based on surmise and assumption when in paragraph-7 they state "the salt in such case are bound to have an adverse effect upon human health". This is nothing more than baseless pure assumptions without any proof and hence demonstrates the falsity and mala fide of the plaintiffs case and the fact that no cause of action arises in favour of the plaintiff.
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' Moreover, the plaintiffs assumptions with regard to the defendant's processes are again nothing more than surmise, conjecture and assumption having no cause of action. It is further contended that the extraction of salt from open solar evaporators in salt pits near sea sides or open lakes and allegations as to contamination due to the fact that such areas as accessible to stray animals, it is submitted that the plaintiffs salt also utilizes the same process and is a preliminary requirement in relation to extraction of salt. It is further contended that any allegations raised against the composition/contents/ingredients of the said products are false, baseless and mala fide and defamatory, under the Defamation Ordinance, 2002 and section 499 of the Pakistan Penal Code. It is further contended that the plaintiff did in fact run the Offending Advertisement, which specifically incorporates and identifies the defendant's product and infringes the defendant's Copyrighted work. It is denied by the defendant that the packaging reproduced in the Offending Advertisement with which the plaintiffs salt is compared is identical in its copyrighted design, layout, art work, as that of defendant's product, the plaintiff stands in breach and infringement of the Copyright Ordinance, 1962. The said Advertisement not only refers to the attributes of Hub Salt (plaintiffs salt), but also specifically identifies the defendant's product with malicious intent to damage its market value and sale output as well as to illegally defame the defendant's product before the public at large, consequently damaging the well-established repute and goodwill of the defendant. It is further contended that the so-called (scientifically incorrect and misleading) 'test' performed within the said Advertisement is not sufficient to provide a correct comparison as to insoluble impurities as allegedly present in the defendant's product and is merely a misrepresentative marketing gimmick, unfair trade practice and false advertising taking unfair advantage of the reputation of the distinguishing mark of a competitor being utilized to cause irreparable damage to the business of the defendant by infringing the defendant's copyright and making false and defamatory statements about the defendant's product. It is also contended that the said Offending Advertisement falsely refers to a fictitious entity namely International Salt Research Institute, a Salt Research Institute which allegedly deems the defendant's product to be harmful for human consumption. It is denied that the packet of salt reproduced in the subject advertisement is generic or that the design, artistic work, layout and label does not infringe any copyright. In fact the defendant's product is shown along with the trade mark and copyright in their original packaging in one of the shots. ' In another extended shot a lengthy comparison between the plaintiffs salt and a package identical to the defendant's copyrighted packaging in layout, label, artistic work and design in the copyright is illegally reproduced and shown. Hence, the Offending Advertisement deliberately and malafidely makes false representations about the defendant's product as well as defaming the defendant's product in violation of the law. Moreover, it is clear that either the packaging and property marks as well as trade marks of defendant have been interfered with when erasing the trade mark/name and property mark of the defendant on the comparison packaging which are offences under sections 463, 465, 470, 472, 473, 478, 479, 480, 481, 482, 483, 485 and 486 Pakistan Penal Code or the same layout, label, design, artistic work as that of the defendant's has been reproduced which is a violation of sections 60, 66, 66-A, 66-B and 66-D of Copyright Ordinance, 1962. Hence; in either case the plaintiff has committed criminal offences and as such has come before this Court with unclean hands. The extent of unclean hands with which -the plaintiff has come before this Court does not simply disentitle the defendant from any relief before this Court but also establishes the…
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