Summary
PM Diesels Private Limited (PMD), the registered proprietor of the FIELDMARSHAL mark for diesel engines since 1964, had been using the mark for centrifugal pumps since 1975 when it discovered Thukral Mechanical Works (Thukral) using an identical FIELD MARSHAL mark for pumps in 1985. Thukral derived its rights from an assignment by Jain Industries, which had registered the mark for centrifugal pumps since 1965 but never actually used it. After four decades of parallel litigation, the Delhi High Court found PMD to be the genuine prior user, cancelled Thukral's registration, and permanently injuncted Thukral from using the mark. On appeal, the Division Bench recognised the case as presenting the 'Kerly impasse'; an unprecedented situation in Indian trademark law where both a registered proprietor and a prior user hold enforceable rights against each other. This ruling reaffirms the foundational principle that registration alone does not confer rights absent use, and that goodwill built through decades of genuine use stands as a powerful shield even against a registered proprietor.
Background
Four decades, three rounds of litigation, a Supreme Court judgment, and a novel doctrine the Delhi High Court had never before encountered: the battle over the FIELDMARSHAL trademark for centrifugal pumps is among the most protracted trademark disputes in Indian IP history.
PM Diesels Private Limited (“PMD”) has been the registered proprietor of the word mark FIELDMARSHAL in Class 7 for diesel oil engines and parts thereof since 16 October 1964, with claimed use since 1963. Over time, PMD expanded into centrifugal pumps under the same mark and demonstrated through invoices, agreements with distributors, and dealer testimony that it had been selling FIELDMARSHAL pumps at least since 1975. By the mid-1980s, PMD was selling its FIELDMARSHAL products through over 1,400 dealers across India, the Middle East, Far East, and Africa, with annual turnovers running into crores.
Jain Industries (“Jain”) separately held a registration for the word mark FIELD MARSHAL in Class 7 for centrifugal pumps, flour mills, machine couplings, pulleys and valves, with effect from 13 May 1965. Crucially, Jain never put the mark to use for centrifugal pumps; the only product bearing the mark in its catalogue was a flour mill.
In 1986, Jain assigned its FIELD MARSHAL registration to Thukral Mechanical Works (“Thukral”), recording in the Assignment Deed that Thukral had been using the mark since 1973. Thukral applied to substitute its name as the registered proprietor, which the Assistant Registrar of Trade Marks allowed in November 1986. Thukral’s earliest printed invoices bearing the FIELD MARSHAL mark were, however, of 1988, well after Thukral had obtained its registration through the assignment.
In 1985, PMD filed Suit 2408/1985 before the Delhi High Court alleging that Thukral was manufacturing and selling centrifugal pumps under the FIELD MARSHAL mark, thereby infringing PMD’s registered FIELDMARSHAL trademark and passing off its goods as PMD’s. An ex parte injunction was granted in December 1985 but modified in January 1988 following the assignment to Thukral. In 1987, PMD filed CO 6/1987 under the Trade and Merchandise Marks Act, 1958 (“1958 TMMA”) seeking rectification and removal of the FIELD MARSHAL registration on grounds of non-use. In 1992, Thukral filed its own suit, CS (OS) 3804/1992, seeking an injunction against PMD on grounds of infringement.
In 2008, the Supreme Court of India in Thukral Mechanical Works v. P.M. Diesels, [(2009) 2 SCC 768], held that the five-year non-use period under Section 46(1)(b) of the 1958 TMMA must be reckoned from the date of Thukral’s registration and remanded the matter afresh. Critically, the Supreme Court also found that both Thukral and PMD had infringed Jain’s registered mark, while recognising Thukral’s right as successor-in-interest to Jain’s valid assignment.
All consolidated proceedings came before a learned Single Judge of the Delhi High Court, whose comprehensive judgment gave rise to the present appeals: LPA 320/2024 and connected matters, RFA(OS) 13/2024, and RFA(OS)(COMM) 11/2024, decided by a Division Bench on 6 February 2026.
Issues Before the Court
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- Whether PMD was the prior user of the FIELDMARSHAL mark for centrifugal pumps, and whether that prior use could defeat Thukral’s registered trademark rights.
- Whether diesel engines and centrifugal pumps qualify as allied and cognate goods for the purposes of infringement and passing off under Section 29 of the 1958 TMMA.
- Whether the registration of the FIELD MARSHAL mark in favour of Thukral was liable to be cancelled under Section 46(1)(b) or Section 56(2) of the 1958 TMMA in light of Jain’s non-use.
- Whether Thukral’s use of the FIELD MARSHAL mark amounted to passing off of its goods as those of PMD, entitling PMD to a permanent injunction.
- Whether the ‘Kerly impasse’ existed in this case: a situation where the registered proprietor can restrain the prior user on grounds of infringement, while the prior user can equally restrain the registered proprietor on grounds of passing off.
Thukral’s Arguments
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- PMD was required to establish goodwill in the FIELDMARSHAL mark for centrifugal pumps as of the date of Jain’s adoption in 1965; three early invoices and two advertisements from 1963 were wholly insufficient.
- Diesel engines and centrifugal pumps are different goods, and PMD held no registration for centrifugal pumps; infringement under Section 29 of the 1958 TMMA required identity of goods.
- The issue of allied and cognate goods was first raised by PMD only in a replication and no issue was framed on this point; relief could not be granted on that basis.
- The Supreme Court’s 2008 judgment held that non-use by Jain could not be held against Thukral as assignee, as a valid assignment conferred the same rights on the assignee as the assignor held. The Single Judge’s cancellation of Thukral’s registration was directly contrary to this binding ruling.
- The Assignment Deed expressly recorded Jain’s confirmation of Thukral’s use of the mark since 1973, and the Registrar’s Legal Proceedings Certificate of November 1986 recognised Thukral as the lawful registered proprietor.
PMD’s Arguments
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- PMD demonstrated use of the FIELDMARSHAL mark since 1963 for diesel engines and since 1975 for centrifugal pumps, through original invoices, dealer testimony, account books, and distributor agreements. Turnover grew from Rs. 62,126 in 1963 to over Rs. 60 crores by 1995.
- Diesel engines and centrifugal pumps are allied and cognate goods: they are sold to the same class of consumers (farmers), through the same counters, and Thukral’s own advertisements showed the products being sold together.
- Jain never used the FIELD MARSHAL mark for centrifugal pumps. Thukral tampered with its own invoices to create the impression of prior use and withdrew those documents when confronted during opposition proceedings.
- CO 6/1987 was filed under both Section 46 and Section 56 of the 1958 TMMA. Even if Section 46 required attention to Thukral’s own non-use, Section 56(2) independently permitted cancellation where the mark was entered on the register without sufficient cause, because Jain’s registration was obtained without any actual use of the mark.
- The Supreme Court’s 2008 judgment addressed only the Section 46 question; the Section 56 ground remained to be decided afresh on remand, and PMD’s passing off rights provided an independent basis for Section 56 rectification.
Court’s Observations and Analysis
The Kerly Impasse: An Issue of First Impression
The Division Bench opened its judgment by characterising this case as presenting what it termed the ‘Kerly impasse,’ borrowing from the authoritative text on trade mark law by Kerly. The court observed that this situation arises where a person applies to register a mark but does not immediately use it, and another party uses the same mark and acquires sufficient goodwill to support a passing off claim before the registered proprietor commences use. The result is a deadlock: the registered proprietor may restrain the prior use trademark holder on infringement grounds, yet the prior user may equally restrain the registered proprietor on passing off grounds.
The court noted that it had not been able to find any judicial precedent in India that directly addresses this impasse, characterising the issue as res integra. The present case fit this textbook scenario precisely: Jain held the FIELD MARSHAL registration for centrifugal pumps from 1965 but never used it; PMD commenced use of FIELDMARSHAL for centrifugal pumps from 1975 and acquired substantial goodwill well before Thukral commenced user in 1988. The Supreme Court itself had noted that both PMD and Thukral infringed Jain’s registered mark, while Jain remained entirely absent from the field.
Prior Use and Goodwill: PMD’s Commanding Evidence
The court examined the Single Judge’s findings on prior user and found them to be well-supported. The court observed that PMD had produced original invoices, carbon copies of account books through its distributor JCC (J. Chandrakant & Co.), dealer agreements, and testimony from partners and managing directors of JCC establishing that FIELDMARSHAL pumps had been sold at least since 1975. PW-1 of JCC was not cross-examined on the substance of his deposition regarding sales of FIELDMARSHAL centrifugal pumps from 1975 onwards.
The court found that in a prior use trademark context, evidence must be examined for its weight and cogency, not merely its formal admissibility. Entries in regularly maintained business account books were admissible and carried evidential weight as records maintained in the ordinary course of business.
In contrast, Thukral’s claims of use since 1973 were actively undermined by its own conduct: invoices submitted in trademark opposition proceedings were subsequently found to have the FIELD MARSHAL mark superimposed on them, and Thukral withdrew the documents vide letter dated 30 March 1987. DW-1 Sushil Thukral admitted in cross-examination that the invoices had been taken back. The earliest documentary evidence of Thukral’s use was found to be of 1988.
Allied and Cognate Goods: The Agricultural Common Consumer
On the question of whether diesel engines and centrifugal pumps were allied and cognate goods, the court agreed with the Single Judge’s analysis. The court observed that both products serve the agricultural sector: centrifugal pumps are driven either by diesel engines or electricity, and farmers purchase both products. Dealer testimony confirmed that diesel engines and centrifugal pumps were sold from the same counters and to the same class of consumers.
The court noted that FIELDMARSHAL, being an arbitrary and distinctive mark with no descriptive or generic character, was entitled to a high level of protection across the range of goods within the agricultural product ecosystem. Thukral’s own advertisement materials produced in the suit showed diesel engines and pumps being marketed together under the FIELDMARSHAL brand.
Rectification Under Section 56: Jain’s Non-Use and the Register
The court analysed Sections 46(1)(b) and 56(2) of the 1958 TMMA carefully. The court observed that while the Supreme Court’s 2008 judgment addressed the Section 46 ground, CO 6/1987 had also been filed under Section 56 of the 1958 TMMA, which confers independent power to cancel or vary registration where a mark is entered on the register without sufficient cause or is wrongly remaining on the register.
The court noted that Section 56(2) reads back to Section 11(a) of the 1958 TMMA, which prohibits registration of a mark the use of which would be likely to deceive or cause confusion. Given that PMD had already acquired significant goodwill in the FIELDMARSHAL mark for centrifugal pumps by the time Jain’s registration was entered on the Register, any use of the mark by the registrant would have been likely to cause confusion. This provided an independent ground for rectification under Section 56.
The court further observed that prior use trademark rights, arising from actual commercial use and the goodwill generated thereby, represent the foundational basis of trademark protection in India. Registration is a valuable procedural right but does not, by itself, create the goodwill and reputation that trademark law ultimately protects.
Findings
In view of the observations and the arguments presented by both the parties, the Delhi High Court (Division Bench) held that:
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- PMD was the prior user of the FIELDMARSHAL trademark for centrifugal pumps, having established genuine commercial use at least since 1975, supported by invoices, account books, dealer testimony, and dealership agreements.
- Diesel engines and centrifugal pumps constitute allied and cognate goods, as both are sold to the same class of consumers (primarily farmers) through the same trade channels and counters.
- The registration of the FIELD MARSHAL mark in favour of Thukral was liable to be cancelled under Section 56(2) of the 1958 TMMA, as the mark had been entered on the register without sufficient cause, given Jain’s complete absence of use and PMD’s pre-existing goodwill and reputation in the mark for pumps.
- Thukral’s use of the FIELD MARSHAL mark for centrifugal pumps constituted passing off, as PMD had established prior adoption, long continuous use, and substantial goodwill; the goods were identical; the marks were identical; and the class of consumers and trade channels were the same.
- A perpetual injunction was granted in favour of PMD against Thukral from manufacturing, selling, or dealing in centrifugal pumps, diesel oil engines, electric motors, and agricultural pumps under the mark FIELD MARSHAL or any deceptively similar mark.
- Thukral’s suit CS (Comm) 473/2016 was dismissed, PMD being the bona fide prior user of the FIELDMARSHAL mark.
- PMD’s applications for registration of the FIELDMARSHAL mark in Class 7 in different languages were directed to proceed to registration, the IPAB orders to the contrary being set aside.
- Thukral was given a period of six months to exhaust its existing stock before the permanent injunction took full effect.
Case Citation: Thukral Mechanical Works v. PM Diesels Private Limited & Anr, LPA 320/2024 and connected matters (RFA(OS) 13/2024, RFA(OS)(COMM) 11/2024, LPA 324-333/2024, RFA(OS)(COMM) 38/2025), Delhi High Court, decided on 6 February 2026. Available at http://indiankanoon.org/doc/59062345/
Authored by Gaurav Mishra, IP Attorney, BananaIP Counsels