Delhi High Court
Balar Marketing Pvt. Ltd. vs Lakha Sharma on 21 February, 2002
Equivalent citations: 2002IIIAD(DELHI)194, 97(2002)DLT424, 2002(62)DRJ302, 2002(24)PTC462(DEL), 2002 A I H C 3165, (2002) 62 DRJ 302 (2002) 97 DLT 424, (2002) 97 DLT 424
Author: R.C. Jain
Bench: R.C. Jain
JUDGMENT R.C. Jain, J.
1. This civil revision is directed against the order of learned Additional District Judge dated 10.8.2000 by which an application under Order 6 Rule 17 read with Section 151 CPC moved on behalf of the plaintiff-respondent herein praying for amendment of the plaint has been allowed.
2. Briefly stated, the relevant facts leading to the present revision are that the respondent-plaintiff has filed a suit under Section 105 and 106 of Trade and Merchandise Act against the petitioner-defendants claiming the proprietorship over the trade marks "KUNDAN" and "KUNDAN CAB" in respect of wires and cables. The petitioner is contesting the said suit and has filed a counter claim. A certain Smt. Promila Sehgal had also filed a suit against the plaintiff-respondent and petitioner-defendants for restraining them from using the trade mark "KUNDAN". During the pendency of the said suit Smt. Promila Sehgal assigned her trade mark "KUNDAN" in favor of the petitioner-defendants and consequently the suit filed by Smt. Promila Sehgal was withdrawn. The plaintiff-respondent, in view of the above change of circumstances, sought amendment by incorporation of certain extensive paragraphs in the plaint which according to him were necessitated on account of the subsequent events. Besides the plaintiff-respondent also sought to raise the valuation of the suit from Rs. 1,00,000/- (Rupees one lakh) to Rs. 10,00,000/- (Rupees ten lakhs) on account of the use of the trade mark of the plaintiff-respondent by the petitioner-defendants and their assignor Mrs. Promila Sehgal. The application was opposed on behalf of the petitioner-defendants mainly on the ground that the amendment so far as it related to the enhancement in the valuation of suit was mala fide and aimed at taking the suit out of the jurisdiction of the District Court. The learned trial court has, however, allowed the application and permitted the plaintiff-respondent to amend the plaint subject to payment of Rs. 500/- as cost. Aggrieved by the said order the petitioner-defendants have come up in the present revision petition.
3. I have heard Shri Ishwar Sahai, learned senior counsel for the petitioner and Shri Valmiki Mehta, learned senior counsel for the respondent and have given my thoughtful consideration to their respective submissions.
4. It may be noted at the very outset that there is no challenge to the impugned order so far as it has allowed the incorporation of certain paragraphs in the plaint which were necessitated on account of the subsequent event i.e. assignment of the rights of Smt. Promila Sehgal to use the trade mark "KUNDAN" in favor of the petitioner-defendants, and the attack of the learned counsel for the petitioner to the impugned order is confined to permitting the plaintiff-respondent to increase the valuation of the suit to Rupees ten lakhs. In this regard learned counsel for the petitioner has strenuously argued that the proposed increase in the valuation of the suit from Rupees one lakh to Rupees ten lakhs is a mala fide attempt on the part of the plaintiff-respondent aimed at ousting the jurisdiction of the District Court and tainted with ulterior motive and, therefore, the trial court ought not to have allowed this amendment and in any case increase in the valuation of suit from Rupees one lakhs to Rupees ten lakhs was arbitrary even on the premise that he was entitled to claim accounts from the petitioner-defendants for illegal use of the trade mark "KUNDAN/KUNDAN CAB" by Smt. Promila Sehgal who has assigned the trade mark and business to the defendants. Learned counsel for the petitioner has submitted that the plaintiff-respondents are not entitled to claim any rendition of account in respect of the business of Smt. Promila Sehgal from the defendants prior to the assignment of her rights in their favor. The said claim/right, if any, we mere light to sue incapable of transfer and enforceable against the petitioner-defendants. In this connection, he has heavily relied upon the decision of this court in the case of Thermofriz Insulations v. Vijay Udyog, 1981-PTC-128. In that case the court considered the question if right to sue for damages consequent upon a breach of contract or on tort was or was not an actionable claim capable of transfer or barred by the provisions of Section 6 of the Transfer of Property Act. The court relying upon a decision in the case of M.T. Rajamanickam Chetty & Anr. v. T.R. Abdul Halim Sahib, AIR 1941 Madras 389 (DB) reiterated the legal position that a right to sue for damages - in ascertaining damages consequent upon a breach of contract or on tort being not at actionable claim is not transferable being expressly forbidden by Clause (e) of Section 6 of the Transfer of Property Act. In regard to the relief of rendition of accounts and damages the court considered the question and answered as under:
"Different considerations would, however, arise so far as relief for rendition of accounts and damages is concerned. That cause of action was personal to the original plaintiff and it lapsed on his ceasing to be a plaintiff. As observed earlier, there could be no assignment of the same in favor of the present plaintiff. Faced with this situation, the learned counsel for the plaintiff came forth with the argument that the term 'goodwill' will cover a claim for damages based on part infringement. However, I do not agreed. No doubt 'goodwill' constitutes as asset of a business like all other assets, for instance, stock in trade, tools, machinery etc. It may indeed by very valuable property although intangible and is as much transferable or saleable as any other asset. Of course, the word 'goodwill' is very difficult to define although its nature has been stated may a time."
The court concluded as under:-
"Thus, goodwill, by and large, covers every advantage which will attract the customers to purchase a particular product on account of its reputation, quality etc. and the transfer of goodwill confers on the transferee the exclusive right to represent himself as carrying on such a business and as against the transferor the exclusive right to use the name under which the business has been carried on. In other words, the assignor of the trade mark Along with goodwill is not entitled to use the same any more in relation to his own products. However, by no stretch of reasoning can its scope be extended so as to include seven past causes of action which had accrued to the transferor or assignor of a trade mark. There is neither any basis nor justification for such unlimited construction. This arguments of the plaintiff's counsel, therefore, is devoid of any substance."
5. I am afraid the petitioner-defendant can not seek any assistance from the above decision because here it is not the petitioner-defendant who on the strength of the assignment of trade mark in its favor has staked any claim against the plaintiff-respondent or against any other person for the illegal and unauthorised use of the trade mark of the assignor for the period when the assignor is stated to have carried on business by using the said trade mark. In the case in hand the position is quite different in as much as it is the plaintiff-respondent who wants to claim a sum of Rs. 10,00,000/- on account of unauthorised use of trade mark by Smt. Promila Sehgal, the assignor of the trade mark in favor of the petitioner-defendant and, therefore, it cannot be said that it is a mere a right to sue which was not liable to transfer by Smt. Promila Sehgal in favor of the petitioner-defendant.
6. Learned counsel for the petitioner has then urged that the petitioner is not liable for any damages etc. on account of any alleged unauthorised use of the trade mark by their assignor Smt. Promila Sehgal because what has been transferred to them is only trade mark "KUNDAN/KUNDAN CAB" being used by Smt. Promila Sehgal and the goodwill in relation to the said business and no liability of the assignor can be said to have been passed on to the petitioner. In this regard both sides have referred to the assignment deed dated 1st May, 1998 by which the assignor had agreed to sell assign absolutely and for ever the trade mark "KUNDAN" (subject matter of suit No. 51/96) Along with goodwill of the assignor firm and business concerned to the petitioner for a total consideration of Rs. 1,00,000/- and on such transfer the petitioner got the exclusive right to use and all benefits and rights of the said trade mark in relation to the said goods Along with the assignor's goodwill and the business concerned. In the alternatives, the submission of the counsel for the petitioner is that the respondent has steeply raised the suit value from Rs. 1,00,000/- to Rs. 10,00,000/- in an arbitrarily manner and at best after the said assignment by Smt. Promila Sehgal in favor of the petitioner, the value could be raised by Rs. 500/- which was the counter claim put forward by the petitioner-defendant in the suit of plaintiff-respondent. To fortify his contention, learned counsel for the petitioner-defendant has placed reliance upon two Supreme Court decisions one in the case of Abdul Hamid Shamai v. Abdul Majid and Ors., and the other in the case of Commercial Aviation and Travel Company and Ors. v. Vimla Pannalal, . In the first case the court considered the question of valuation of a suit for accounts and held as under:-
"It is true that in a suit for accounts the plaintiff is not obliged to state the exact amount which would result after taking all the accounts and he may, therefore, put a tentative valuation upon the suit, but he is not permitted to choose an unreasonable and arbitrary figure for that purpose. In a suit for accounts the correct amount payable by one party to the other cane be ascertained only when the accounts are examined and it is not possible to given an accurate valuation of the claim at the inception of the suit. The plaintiff is, therefore, allowed to give his own tentative valuation. Ordinarily the Court shall not examine the correctness of the valuation chosen, but the plaintiff cannot act arbitrarily in this matter. If a plaintiff chooses whimsically a ridiculous figure it is tantamount to not exercising his right in this regard. In such a case it is not only open to the Court but its duty to reject such a valuation."
7. In the later case it was held that in a suit for accounts it is almost impossible for the plaintiff to value the relief correctly so as long as the account is not taken, the plaintiff cannot say what amount if, at all, would be found due to him from such accounting. That plaintiff may think that huge amount may be found due to him but in actual accounting it may be found that nothing is due to the plaintiff. It was also held that a suit for accounts is filed with the hope that on accounting a substantial amount would be found due to the plaintiff but the relief cannot be valued on such a hope surmise or conjecture.
8. In the present case the plaintiff-respondent in proposed paragraph 25 has made a vague/bald averment that since the defendants are now claiming themselves as assignees of the business of Smt. Promila Sehgal, the defendants are liable to render the accounts of Smt. Promila Sehgal and, therefore, on accounts being rendered by defendants themselves, as well as accounts of Smt. Promila Sehgal till date they shall be found entitled to approximately a sum of Rupees ten lakhs but they have failed to give the basis or the details or material on the basis of which they have made such a claim. It is pertinent to note here that the respondent had not made a counter claim to the extent of Rupees nine lakhs against Smt. Promila Sehgal in the suit filed by her and had in fact made a counter claim of Rs. 450/- and had valued the said counter claim for valuation purpose at Rs. 450/- and, therefore, even after the assignment of the trade mark and the goodwill in favor of the petitioner-defendant, he cannot be allowed to raise such a huge claim against the petitioners-defendants on the premises that such a sum may be found due from them on accounting. In view of this the valuation of Rupees ten lakhs put by the plaintiff-respondent on their amended suit appears to be arbitrary and not based on any cogent material.
9. Learned counsel for the plaintiff-respondent has referred to a Madras decision of in the case of A.T. Mathavan v. S. Natarajan, AIR 1988 NOC 1 (Madras) wherein the court considered the question of allowing amendment of the plaint which had the affect of taking the suit out of the jurisdiction of the court and it was held that amendment taking the suit for the jurisdiction can be allowed and the court which originally entertained the plaint can certainly decide the question of amendment even though by allowing amendment may lose its jurisdiction and as a result of which the plaint may have to be returned for presentation to appropriate court having jurisdiction as per the amended plaint. There is no quarrel with the above legal preposition but the court is always entitled to see if the proposed increase in the valuation of the suit is bona fide or mala fide and simply aimed at to take the suit out from the jurisdiction of a particular court. In the case in hand, in the absence of any satisfactory explanation/material coming forth on record, it can be safely inferred that the attempt of the petitioner-defendants to raise the valuation of the suit from Rupees one lakh to Rupees ten lakhs is not a bona fide one. This is also for the added reason that while the plaintiff has proposed to value the suit for the purpose of jurisdiction at Rupees ten lakhs but for the purpose of payment of court fee, it has been valued at Rupees one thousands only and has paid a court fee of Rs. 190/- only.
10. Having considered the matter in its entirety, this court is on the opinion that impugned order so far as it allows the amendment application and amendment of the plaint raising the valuation of the suit from Rupees one lakh to Rupees ten lakhs is not justified and can not be sustained. In the result this revision petition is allowed and the impugned order of the learned Additional District Judge dated 10.8.2000 to the extent it has allowed the plaintiff-respondent to raise the valuation of the suit from Rupees one lakh to Rupees ten lakhs is hereby set aside.