Delhi High Court - Orders
Haldiram India Pvt. Ltd vs M/S Krishnashree Foods & Ors on 4 May, 2023
Author: C.Hari Shankar
Bench: C.Hari Shankar
$~20
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ CS(COMM) 262/2023
HALDIRAM INDIA PVT. LTD ..... Plaintiff
Through: Mr. Neeraj Grover, Mr. Naveen
Grover and Mr. Varun Goswami, Advs. with
Mr. S.K. Mishra, AR
Versus
M/S KRISHNASHREE FOODS & ORS. ..... Defendants
Through: Mr. Sameer Kumar, Mr. Sahil
Chowdhury and Mr. Mandeep Baisala,
Advs. for D-1
Mr. Aditya Shankar Prasad and Mr.
Shahrukh Ahmad, Advs. for D-2
Mr. Manoj Singh, Adv. for D-3
CORAM:
HON'BLE MR. JUSTICE C.HARI SHANKAR
ORDER
% 04.05.2023 I.A. 8315/2023 (Order XXXIX Rules 1 and 2 of the CPC)
1. The plaintiff alleges infringement, by Defendants 1 and 2, of the trade mark , which stands registered in favour of the plaintiff in Class 30 with effect from 27th December 1972. The mark stands registered for the entire territory of India, except for the State of West Bengal.
2. Mr. Neeraj Grover, learned Counsel for the plaintiff, submits that Defendants 1 and 2 are using the aforesaid mark registered in favour of the plaintiff, in three outlets in Patna, without due authority. He submits that the exclusive right of the plaintiff to use the aforesaid mark, Signature Not Verified emanating from the Certificate of Registration issued in its Digitally Signed By:KAMLA RAWATCS(COMM) 262/2023 Page 1 of 8 Signing Date:08.05.2023 12:13:44 favour, extended to whole of India except the State of West Bengal. Though Defendant 3 was entitled to use the aforesaid mark only for the State of West Bengal, Mr. Grover submits that, in 2011, Defendant 3 issued a Licence Agreement in favour of Defendants 1 and 2, permitting them to use the aforesaid mark in one outlet in Patna. Even the said Agreement, according to Mr. Grover, was without any authority of law. Nonetheless, he points out that the said Licence Agreement was also to remain in force only for a period of nine years, which came to an end in 2020, whereafter there is no renewal thereof. He also draws my attention to paras 6 and 7 of the said Licence Agreement, which do not permit the licencees, i.e. Defendants 1 and 2 to use the mark for manufacturing packed sweets and packed namkeens in any manner and require them, instead, to procure the packed sweets, packed namkeens and packed items, on which the said mark could be used, only from Defendant 3 and from no other person.
3. Mr. Grover submits that Defendants 1 and 2 have, without any authority of law, in clear transgression of the rights enuring in favour of the plaintiff in view of the registration of the mark in its favour and even in violation of Clauses 6 and 7 of the aforesaid Licencee Agreement dated 14th October 2021, which itself came to an end in 2020, been using the mark which is registered in the plaintiff's favour for manufacturing and selling its own products.
4. Mr. Sameer Kumar, learned Counsel for Defendant 1, relies by way of response, on Clause 1 of the terms and conditions of the Signature Not Verified Licencee Agreement which read thus:
Digitally Signed By:KAMLA RAWATCS(COMM) 262/2023 Page 2 of 8Signing Date:08.05.2023 12:13:44 "1. The Present agreement will come into force on 14th October 2011 and will continue for a period of Nine years (certain) and with an option on the Licensee part to have the terms of this agreement extended by a further period of 4 (Four) years only. The present agreement/arrangement can be terminated at any time within the said agreed period of Nine years (certain) and extended further period of 4 (Four) years by Licensor on breach of any condition contained in this agreement or on happening of any such event which is expressly or impliedly prohibited and/or barred by the Licensor or upon any orders of any Court of Law."
5. Mr. Sameer Kumar's contention is that the Licence Agreement did not automatically come to an end on the expiry of nine years but that Defendant 2, as the licensee under the agreement, had the right to have the agreement renewed for a period of four more years, which is yet to expire. He also relies on para 9 of a subsequent Settlement Agreement between the plaintiff and Defendant 3 in the course of litigation between them, which reads thus:
"9. Sh. Ashok Aggarwal has represented and disclosed that as on date there are two Franchisees located at Allahabad and Patna (Terms expiring on 23.1.2024 and 13.10.2020 respectively) and Sh. Ashok Aggarwal hereby undertakes not to extend/renew terms of his existing Franchisees at Allahabad and Patna beyond 23.1.2024 and 13.10.2020 respectively. Ashok Aggarwal shall serve three months advance notice to the existing franchisees before expiry of their terms/periods clearly stating that the term shall not be extended and to stop operations on the expiry of the terms. The copy of the said notices shall also be provided to the First Party for record and further reference. Ashok Aggarwal shall inform its present franchises about present settlement and shall ensure that the said franchisees strictly follow the terms in respect of usage of trade mark/trade name of the present settlement and use trade mark "HALDIRAM BHUJIAWALA" with V Logo in all their display board/packaging material/advertising material etc. in consonance to the terms of the present settlement. Ashok Aggarwal shall provide a copy of the Franchisee Agreements mentioned above before the Hon'ble trial Court."
6. Mr. Grover submits, in response, that apart from the fact that the Licence Agreement dated 14th October 2011 was never, in fact, Signature Not Verified Digitally Signed By:KAMLA RAWATCS(COMM) 262/2023 Page 3 of 8 Signing Date:08.05.2023 12:13:44 extended beyond 2020, the right of Defendant 2, even under the said Licence Agreement, was only to use the impugned mark for manufacturing and selling goods of Defendant 3. They could not, therefore, use the mark for manufacture and sale of their own products, as they have been doing.
7. Apropos the Settlement Agreement dated 3rd May 2016, Mr. Grover has drawn my attention to para 8 thereof which reads thus:
"8. Sh Ashok Aggarwal and. his nuclear family shall not have any authority in any manner to grant/sub grant the permission, as granted to him by First Party under present settlement to use the Trade Mark/Trade name, to any third party/ies. Sh. Ashok Aggarwal and/or his nuclear' family members (his Wife, his Son and their successors in interest/heirs) shall never appoint any franchisee directly or indirectly in the "Region of the First Party" or abroad."
8. As such, Mr. Grover submits that there was a complete embargo on Defendant 3 extending the Licence Agreement beyond 2020, as it would amount to appointing a franchisee within the region in which the plaintiff was entitled to use the mark.
9. I have heard learned Counsel and perused the record.
10. On facts, there is no dispute. It is undisputed that the mark is registered in favour of the plaintiff since 27th December 1972.
11. Defendants 1 and 2 have no registration, in their favour, of the said mark.
Signature Not Verified Digitally Signed By:KAMLA RAWATCS(COMM) 262/2023 Page 4 of 8 Signing Date:08.05.2023 12:13:4412. In the absence of any document, which would entitle Defendants 1 and 2 to use of mark, therefore, the use of the mark prima facie infringes the registration held by the plaintiff therein.
13. The Licence Agreement dated 14th October 2011 cannot, prima facie, come to the aid of Defendants 1 and 2. In the first place, the right of Defendants 1 and 2, even under the said Licence Agreement, was only to use the impugned mark for goods manufactured by, or sourced from, Defendant 3. The agreement placed a complete embargo on Defendants 1 and 2 using the mark for any goods other than sourced from Defendant 3. As such, Defendants 1 and 2 could not have used the mark for the goods which they themselves manufactured.
14. That apart, Mr. Grover is prima facie correct in his submission that the Licence Agreement expired on 14th October 2020. It has not been renewed thereafter.
15. Clause 1 of the terms and conditions in the Licence Agreement extracted in para 4 supra does not result, ipso facto, in automatic renewal of the Licence Agreement after the period of 20 years. It only empowers Defendant 2 to have the terms of the agreement extended by a further period of four years. The words "to have the terms of the agreement extended" clearly indicate that there had to be a conscious documented extension of the agreement. The agreement did not, ipso facto, extend itself on the expiry of four years. The contention of Mr. Sameer Kumar that, by virtue of Clause 1 in the Licence Agreement, the agreement stood extended beyond 2020 is, prima facie, unworthy Signature Not Verified Digitally Signed By:KAMLA RAWATCS(COMM) 262/2023 Page 5 of 8 Signing Date:08.05.2023 12:13:44 of acceptance.
16. Nor can it be said that the Licence Agreement stood extended beyond 2020 by virtue of Clause 9 of the Settlement Agreement dated 3rd May 2016. In fact, Clause 9 itself clearly records the undertaking of Defendant 3 not to extend the Licence Agreement 14th October 2011 beyond 13th October 2020, when it was coming to an end, the mere fact that Defendant 3 might not have issued notice to Defendant 2 in that regard would not result ipso facto in extension of the Licence Agreement.
17. There is also prima facie substance in Mr. Grover's contention that para 8 of the Settlement Agreement dated 3rd May 2016 also serves to discountenance the submissions of Mr. Sameer Kumar of any actual or deemed extension of the Licence Agreement beyond 13th October 2020. Defendant 3 has clearly, in para 8 of the Settlement Agreement, undertaken not to franchise the impugned mark directly or indirectly. He could not, therefore, have extended the licence of Defendant 2, in respect of the mark, beyond 2020.
18. That apart, the very question of whether Defendant 3 could have granted a licence, for use of the mark in Patna and Allahabad, is also seriously questionable, in view of Mr. Grover's submission that the registration of the mark in favour of the plaintiff entitled the plaintiff to exclusivity in respect of the said mark for the entire territory of India except the State of West Bengal.
Signature Not Verified19. Mr Sameer Kumar is unable to traverse these submissions.
Digitally Signed By:KAMLA RAWATCS(COMM) 262/2023 Page 6 of 8Signing Date:08.05.2023 12:13:44
20. Holistically seen, therefore, the use of the impugned marks by Defendant 3 amounts, prima facie, to infringement of the registered mark of the plaintiff.
21. In the circumstances, the plaintiff would be entitled to ex parte relief, even while the defendants could file a reply to the present application.
22. Summons already stand issued in the suit. As such, issue notice in the application. Notice is accepted on behalf of Defendant 1 by Mr. Sameer Kumar, on behalf of Defendant 2 by Mr. Aditya Shankar Prasad and on behalf of Defendant 3 by Mr. Manoj Singh.
23. Reply be filed by the defendants within a period of four weeks with advance copy to learned Counsel for the plaintiff, who may file rejoinder thereto, if any, within a period of four weeks thereof.
24. List before the Court on 4th August 2023.
25. Till the next date of hearing, Defendants 1 and 2 as well as all other acting on their behalf shall be restrained from using the marks and or any mark which is deceptively similar thereto, for any purpose whatsoever, including reproduction of the mark on packing boxes, napkins, packing boxes, napkins, menu cards or on any physical or virtual sites or social media, email IDs and websites/domain names.
26. At request of Mr. Sameer Kumar, the defendants are granted a Signature Not Verified Digitally Signed period of two weeks to remove the said marks from any places or sites By:KAMLA RAWATCS(COMM) 262/2023 Page 7 of 8 Signing Date:08.05.2023 12:13:44 where they may be figuring at present.
I.A. 8316/2023 (Order XXVI Rule 9 of the CPC)
27. In view of the order passed today, this application does not survive for consideration and is disposed of as such.
C.HARI SHANKAR, J MAY 4, 2023 rb Signature Not Verified Digitally Signed By:KAMLA RAWATCS(COMM) 262/2023 Page 8 of 8 Signing Date:08.05.2023 12:13:44