Punjab-Haryana High Court
Paras Industries vs Paras Special Machine Co. on 23 May, 2003
Equivalent citations: (2003)135PLR618, 2004(28)PTC124(P&H)
Author: Hemant Gupta
Bench: Hemant Gupta
JUDGMENT Hemant Gupta, J.
1. The defendant has filed the present revision petition challenging the order passed by the learned trial Court whereby its application for stay of proceedings before the said Court In exercise of powers under Section 111 of the Trade and Merchandise Marks Act, 1958 (hereinafter referred to as 'the Act') was dismissed.
2. The controversy between the parties can be summarized in the following facts.
3. A trade mark Paras Special was registered under the Act in the name of Gopal Singh and Gurcharan Singh on January 02, 1976 with effect from January 06, 1973. At that time, Gopal Singh and Gurcharan Singh were partners of the firm M/s Akal Mechanical Works. As pleaded by the defendant, there was dissolution of the firm on March 31,1973 whereby Gurcharan Singh retired from the partnership of the firm and agreed that the trade mark and trade style shall exclusively belong to Gopal Singh. A new partnership was constituted on April 01, 1973 with Surinder Kaur, the wife of Gurcharan Singh. The said partnership was again dissolved on 31.10.1991 when Smt. Surinder Kaur retired and another partnership was constituted with effect from 1.11.1991 with Gopal Singh and Avtar Singh as partners. The dispute between the parties is whether the dissolution deed between Gopal Singh and Gurcharan Singh as relied upon by Gopal Singh is a genuine document wherein Gurcharan Singh is said to have relinquished his rights in the trade mark 'Paras Special'. Admittedly, the plaintiff has got the trade mark 'Paras Special' registered vide application dated January 15, 1993 although the said application has been granted in the year 2000. It is not disputed that Avtar Singh is at present partner with Gopal Singh in firm, M/s. Akal Mechanical Works, who has filed an application for rectification before the Delhi High Court.
4. Plaintiff is a firm of Gurcharan Singh whereas the defendant is a sole partnership firm of Avtar Singh who is claiming to be partner along with firm Gopal Singh in firm M/s Akal Mechanical Works.
5. Before the controversy on merits is adverted to, Shri Bhati, learned counsel for the respondent has argued that the present revision petition is not maintainable after the amendment of Section 115 of the Code of Civil Procedure with effect from 1st of July, 2002. After 1st July, 2002, the revision petition would be maintainable only if the order, if it had been made in favour of the party applying for revision would have finally disposed of the suit or other proceedings. It was submitted that even if the application under Section 111 of the Act is allowed, the suit would not be finally disposed of therefore, the petitioner cannot invoke the jurisdiction of the High Court to challenge the order passed by the trial Court. It has been further contended that the right available to the defendant is either to challenge the impugned order in appeal against the ad interim injunction order or in appeal against final judgment and decree or by way of Special Leave Petition before the Hon'ble Supreme Court under Article 136 of the Constitution.
6. Sh. Mahajan controverted the argument raised by the petitioner and stated that the revision petition is maintainable and in any case the High Court has supervisory jurisdiction over all Courts and Tribunals situated within its territorial jurisdiction to keep such Subordinate Courts within the bounds of their authority under Article 227 of the Constitution of India.
7. The Hon'ble Supreme Court in Shiv Shakti Coop. Housing Society Nagpur v. Swaraj Developers and Ors., J.T. 2003(4) S.C. 255 has held that after the amendment of the Code of Civil Procedure with effect from 1.7,2002, the revision petition against the order which does not finally dispose of the suit is not maintainable.
8. Under Article 227 of the Constitution, every High Court has the power of superintendence over all Courts and Tribunals throughout the territory in relation to which it exercises jurisdiction. Under Sub-clause (2), the High Court can make and issue general rules and prescribe forms for regulating the practice and proceedings of such Subordinate Courts. Therefore, the High Court has the Constitutional mandate to exercise superintendence of all Courts. Therefore, it is the bounden duty of High Court to keep the Subordinate Courts within the bounds of their authority. The Hon'ble Supreme Court in Essen Deinki v. Rajiv Kumar, 2002(8) S.C.C. 400 held that exercise of jurisdiction under Article 227 of the Constitution is revisional in nature. It is so exercised in normal circumstances for want of jurisdiction, error of Saw, perverse findings and gross violation of natural justice, to name a few. Para 2 to 4 of the report reads as under :-
"2. Generally speaking, exercise of jurisdiction under Article 227 of the Constitution is limited and restrictive in nature. It is so exercised in the normal circumstances for want of jurisdiction, errors of law, perverse findings and gross violation of natural justice, to name a few. It is merely a revisional jurisdiction and does not confer an unlimited authority or prerogative to correct all orders or even wrong decisions made within the limits of the jurisdiction of the Courts below. The finding of fact being within the domain of the inferior tribunal except where it is a perverse recording thereof or not based on any material whatsoever resulting in manifest injustice, interference under the article is not called for.
3. The observations above, however, find affirmance in the decision of this Court in Nibaran Chandra Bag v. Mahendra Nath Ghttghu. In Nibaran this Court has been rather categorical in recording that the jurisdiction so conferred is by no means appellate in nature for correcting errors in the decision of the subordinate courts or tribunal but is merely a power of superintendence to be used to keep them within the bounds of their authority. More recently, in Mani Nariman Daruwala v. Phiroz N. Bhatena this Court in a similar vein stated : (SCC pp. 149-50, para 18) "In the exercise of this jurisdiction the High Court can set aside or ignore the findings of fact of an interior court or tribunal if there was no evidence to justify such a conclusion and if no reasonable person could possibly have come to the conclusion which the court or tribunal has come or in other words it is finding which was perverse in Saw. Except to the limited extent indicated above the High Court has no jurisdiction to interfere with the findings of fact."
4. Needless to record that there is total unanimity of judicial precedents on the score that error must be that of law and patently on record committed by the inferior tribunal so as to warrant intervention - it ought not to act as a court of appeal and there is no dissension or even a contra- note being sounded at any point of time till date. Incidentally, the illegality, if there be any, in an order of inferior tribunal, it would however be a plain exercise of jurisdiction under the article to correct the same as otherwise the law courts would fail to subserve the needs of the society since illegality cannot even be countenanced under any circumstances."
Therefore, in appropriate cases where the test laid down by the Hon'ble Supreme Court for exercise of jurisdiction under Article 227 of the Constitution is satisfied, the High Court has the jurisdiction to correct the illegalities committed by the Subordinate Courts and Tribunals.
9. On merits of the controversy, the learned trial Court has dismissed the application on the short ground that the rectification proceedings which are pending before the Delhi High Court, have been filed by M/s Akal Mechanical Works which is not a party to the present suit. The trial Court was of the view that the judgment and decree in the present suit is not going to be binding on M/s. Akal Mechanical Works, therefore, the plaintiff cannot ask for stay of the suit on the ground that the third party i.e. M/s Akal Mechanical Works have filed rectification proceedings and the same are pending before the Delhi High Court.
10. In my opinion, the order passed by the learned trial court is not sustainable in law. M/s. Akal Mechanical Works is not a third party as observed by the learned trial Court. There is Preliminary Objection by the defendant that M/s Akal Mechanical Works is a necessary party which has not been impleaded. It is not disputed that Avtar Singh, the sole proprietor of the defendant-firm is one of the partners of M/s Akal Mechanical Works. It is well-established and settled principle of law that a partnership firm is nothing but a compendious name of the partners. Once M/s Akal Mechanical Works has initiated proceedings for rectification of the trade mark, such proceedings necessarily include Avtar Singh, who is partner of M/s Akal Mechanical Works. It has been held by Hon'ble Supreme Court in S. V. Chandra Pandia v. S. V. Shivalingam Nadar, 1993(1) S.C.C. 589 that the partnership firm is not a legal entity, it has no legal existence. It is merely a compendious name and hence the partnership property would vest in all the partners, The partnership firm is not a legal person even though it has some aspects of personality. Partnership is a, relationship between persons, the product of agreement to share the profits of business. In Dena Bank v. Bhikhabhai Prabhudas Parekh & Co. and Ors., (2000)5 Supreme Court 694, it has been held :-
"The High Court has relied on Section 25 of the Partnership Act, 1932 for the purpose of the firm. Section 25 provides that every partner is liable, jointly with all the other partners and also severally for all acts of the firm done while he is a partner. A firm is not a legal entity. It is only a collective or compendious name for all the partners. In other words, a firm does not have any existence away from its partners. A decree in favour of or against a firm in the name of the firm has the same effect as a decree in favour of or against the partners. While the firm is incurring a liability it can be assumed that all the partners were incurring that liability and so the partners remain liable jointly and severally for all the acts of the firm. The principle cannot be stretched and extended to such situations in which the firm is deemed to be a person and hence a legal entity for a certain purpose. The Karnataka Sales Tax Act, with which we are concerned, also gives the firm a legal status by treating it as a dealer and hence a person for the limited purpose of assessing under the Sales Tax Act. It was, therefore, held by a three-Judge Bench in CST v. Radhakrishan : (SCC p.253, para 7) [A] Firm in a partnership and a Hindu undivided family are recognised as legal entities and as such proceedings can only be taken against the firm or undivided family as entities and as such proceedings can only be taken against the firm or undivided family as the case may be. Neither the partners of the firm nor the members of the Hindu undivided family will be liable for the tax assessed against the firm or the undivided Hindu family."
11. The rights and obligations of the sole proprietor and that of a partner has been explained by Hon'ble Supreme Court in Ashok Transport Agencies v. Awdhesh Kumar, 1998(5) SCC 567. It has been held that though the partnership is a not a juristic entity, but Order 30 of the Code enables the partners of a partnership firm to sue and be sued in the name of the firm. Proprietary concern is only a business name in which the proprietor of the concern carries on the business. A suit by or against a proprietary concern is by or against the proprietor of the business. By virtue of provisions of Rule 10 of Order 30 of CPC, the provisions of Order 30 are made applicable to a proprietary concern. It enables the proprietor of a proprietary business to be sued in the business names of his proprietary concern. It has been observed by the Supreme Court as under:-
"A partnership firm differs from a proprietary concern owned by an individual A partnership is governed by the provisions of the Indian Partnership Act, 1932. Though a partnership is not a juristic person but Order 30 Rule 1 CPC enables the partners of a partnership firm to sue or to be sue in the name of the firm. A proprietary concern is only the business name in which the proprietor of the business carries on the business. A suit by or against a proprietary concern is by or against the proprietor of the business. In the event of the death of the proprietor of a proprietary concern, it is the legal representative of the proprietor who alone can use or be sued in respect of the dealings of the proprietary business. The provisions of Rule 10 of Order 30 which make applicable the provisions of Order 30 to a proprietary concern, enable the proprietor of a proprietary business to be sued in the business names of the proprietary concern. The real party who is being sued is the proprietor of the said business. The said provision does not have the effect of converting the proprietary business into a partnership firm. The provisions of Rule 4 of Order 30 have no application to such a suit as by virtue of Order 30 Rule 10 the other provisions of Order 30 are applicable to a suit against the proprietor of proprietary business "insofar as the nature of such case permits". This means that only those provisions of Order 30 can be made applicable to proprietary concern which can be so made applicable keeping in view the nature of the case."
Thus, Order 30 of the Code of Civil Procedure enables a suit to be filed by or against the firm in business name than in the names of individual partners. Therefore, the proceedings under Sections 46 and 56 of the Trade and Merchandise Marks Act, 1958 for rectification of the trade mark filed by M/s Akal Mechanical Works are in fact filed on behalf of partners namely Gopal Singh and Avtar Singh. On the other hand, the present defendant is a sole proprietor.
12. In view of the above, I am unable to agree with the findings recorded by the learned trial Court that the rectification proceedings before the Delhi High Court has been filed by M/s Akal Mechanical Works who is not a party in the present suit. In fact, Avtar Singh is a partner of M/s Akal Mechanical Works and he is sole proprietor of defendant in the present suit. Apart from the said legal situation, it has been stated by the petitioner that the findings recorded by the court at Delhi would be binding on the defendant in the present suit filed at Ludhiana. It is further required to be noticed that it is one of the Preliminary Objections of the defendant that M/s Akal Mechanical Woks has not been impleaded in the suit. The plaintiff has dominus litus so far as to implead proper parties. However, application of the defendant could not be defeated on the ground that M/s Akal Mechanical Works is not a party to the present suit.
13. The other reasoning given by the trial Court is that the defendant is not using their trade mark Paras Special as it has been specifically pleaded that it has been using trade mark Budha. The fact that the defendant is not using Paras Special would mean that the plaintiff may not succeed to claim either passing or infringement, but the claim of the defendant that the plaintiff has obtained registration of the trade mark in spite of previous registration is a question which is required to be decided in appropriate proceedings.
14. The counsel for the defendant has submitted that in rectification proceedings, the Delhi High Court has passed an order on January 31, 1997 reported as Akal Mechanical Works v. Paras Special Machine Co. and Ors., (1997-2)116 P.L.R. D.29. The challenge was to the order passed by Deputy Registrar of Trade Marks allowing the application filed by the plaintiff herein for withdrawal/cancellation of the Notification dated 1.3.1994 whereby the registered trade mark in the names of Gopal Singh and Avtar Singh and maintenance of status quo till disposal of rectification proceedings was ordered. In the said proceedings, it was the grievance of the plaintiff that the order of removal of his name from the register as one of the joint proprietors of the trade mark is on the basis of forged document with the object of depriving him of his right to trade mark. The Delhi High Court set aside the order of removal of the name of the plaintiff from the certificate of registration and ordered status quo till the decision of rectification proceedings. It is admitted at Bar that one of the issues before the Delhi High Court in rectification proceedings is whether the dissolution deed is a forged document whereby Gurcharan Singh is said to have relinquished his rights in the partnership property including that of the trade mark.
15. Once it is found that the proceedings in respect of validity of the registration of the trade mark on behalf of the defendant are pending before the competent court, therefore, Sub-clause (i) of Section 111 of the Act leaves no option for the Court but to stay the proceedings of the suit. By virtue of Sub-section (4) of Section 111, the final order made in the rectification proceedings is binding upon the parties and the Court is bound to dispose of the suit formally in such order insofar as it relates to the issue as the validity of the registration of the trade mark. Therefore, it is just and proper to stay the proceedings in the present suit to await the adjudication of the rectification proceedings pending before the competent court. Such course will not only avoid possibility of contradictory judgment on the basis of same evidence but also avoid expense on proceedings and time of Court. Any decision in such rectification proceedings will be binding on the parties regarding validity of the registration of the trade mark.
16. Consequently, I allow the present revision petition, set aside the order of the learned trial Court and stay the proceedings of the suit till the decision of the rectification proceedings.