M/S Vrajlal Manilal & Co. v. M/S Bansal Tobacco Co.

In the world of trademarks, registration is often seen as the ultimate shield. But what happens when a registered owner tries to crush a competitor who has been operating under the same mark for decades, long before the registration was even granted? The Delhi High Court faced exactly this dilemma in a dispute over the iconic '22' trademark for chewing tobacco, where the battle lines were drawn not over who registered first, but over who actually used the mark honestly and continuously in the marketplace.

The dispute pitted M/S Vrajlal Manilal & Co. against M/S Bansal Tobacco Co. over the use of the '22' trademark in the chewing tobacco business. Vrajlal Manilal & Co., holding registered rights to the mark, sought to restrain Bansal Tobacco Co. from using the same '22' designation. An ex-parte injunction had already been granted in favor of the plaintiff, effectively freezing the defendant's operations under the mark. The defendant, however, came prepared with a different narrative—one rooted in years of actual market presence and documented commercial activity dating back to at least 1975.

The legal friction centered on a fundamental tension in trademark law: the supremacy of registration versus the rights of an honest concurrent user. The plaintiff relied on its registered trademark rights to argue that the defendant's use of the '22' mark constituted infringement and warranted the continuation of the injunction. The defendant countered with a powerful evidentiary showing of honest concurrent user, presenting excise records and sales data that demonstrated continuous use of the '22' trademark since 1975. This documentary evidence painted a picture of a business that had built its commercial identity around the mark long before any registration dispute arose, challenging the very foundation of the plaintiff's claim to exclusive use.

The Delhi High Court found that the defendant had established a prima facie case of honest concurrent user, supported by credible documentary evidence in the form of excise clearances and sales records. Recognizing that the defendant's commercial history predated and ran parallel to the plaintiff's claims, the court vacated the existing interim injunction. However, the court did not give the defendant a completely free hand. The use of the '22' mark by Bansal Tobacco Co. was geographically restricted to Uttar Pradesh, West Bengal, and Bihar. Additionally, the defendant was mandated to file quarterly accounts of its sales, creating a structured framework that balanced the competing interests while protecting the plaintiff's ability to monitor and quantify any potential damages.

For founders and IP professionals, this case delivers a critical lesson: registration alone does not guarantee absolute exclusivity, especially when a competitor can demonstrate decades of honest, documented use. Maintaining meticulous records—excise clearances, sales data, invoices, and other commercial documents—is not just good business hygiene; it is potentially the most powerful defense in a trademark dispute. If you are operating in a market with a mark that may conflict with a registered owner, start preserving your evidence trail immediately. And if you are the registered owner, conduct thorough market investigations before assuming your registration gives you a monopoly, because honest concurrent users with strong documentation can dismantle even an ex-parte injunction.