Bangalore District Court
M/S Kinematic Foodtech Pvt Ltd vs Shalini Manesh on 4 November, 2024
KABC010302322018
Form No.9
(Civil)
Title
Sheet for
Judgment
in Suits PRESENT: Sri. Chinnannavar Rajesh Sadashiv,
R.P. 91
XVIII Additional City Civil Judge.
Dated this the 4th day of November, 2024
PLAINTIFF: M/s.KINEMATICE FOODTECH PVT.
LTD., Having its registered office at
3rd floor, No.188, Janardhan
Towers, Outer Ring Road, near
Agara Flyover, Bengalur, PIN-560
102.
Represented by its authorized
person and legal head Mr.
D.V.Ravikiran.
[By Sri.C.H.Srinivas., Advocate]
/v e r s u s/
DEFENDANT: Ms. Shalini Manesh
W/o Mr. Manesh, Aged Major,
R/at No.1224/1, 12th Cross,
Behind Rangamandir, BEML
Layout, 3rd stage,
Rajarajeshwari Nagar,
Bangalore-560 098.
(Sri.S.N.A., Advocate)
** **
Date of institution of the suit : 31/10/2018
Nature of the suit : Permanent and
2 O.S.No.7890/2018
Mandatory Injunction
Date of commencement of : 04/11/2022
recording of the evidence
Date on which the Judgment : 04/11/2024
was pronounced.
: Year/s Month/s Day
Total duration /s
06 00 03
******
This suit is filed by the plaintiff as against the defendant seeking the relief of mandatory and permanent injunction.
2. The case of the plaintiff in brief is as under:-
The plaintiff is dealing with the business of manufacturing and selling of food and various food products under registered trademark 'PETOO'. The defendant had approached the plaintiff to give franchise of the said trademark. The defendant has agreed to pay Rs.7 lakhs as non-refundable fee towards the software license and setup branding, franchisee licensing, staff hiring/training and other supports and Rs.1,00,000/-
for the purchase of the products and Rs.12,00,000/-
towards the module set up for merchandising its goods and services. The defendant agreed to pay said amount 3 O.S.No.7890/2018 and paid Rs.1,00,000/- through cheque bearing No.270082 dated 04/02/2018 and Rs.7,00,000/-
through cheque bearing No.537346 dated 01/03/2018 towards non refundable fee. The plaintiff has set up the business to the defendant at outlet No.1155, 1st floor, BEML Layout, 3rd Stage, R.R.Nagar, Bangalore and they entered into the Franchise agreement dated 2nd May 2018.
3. The defendant had a right to conduct her business as a franchisee of the plaintiff at above said outlet but she has violated the terms and conditions of the franchise agreement and she was unable to continue the outlet and thereby malign the name, goodwill and reputation of the trademark of the plaintiff, because of that plaintiff's company has suffered loss and looses it's good reputation in the market. So, plaintiff requested the defendant to hand over all the confidential information but she failed to handover the same. Hence, cause of action arose to the plaintiff to file this suit. So, the plaintiff prayed to grant decree of mandatory injunction directing the defendant to hand over the plaintiff's software license 4 O.S.No.7890/2018 and franchisee licensing and the confidential information delivered by it under Franchise Agreement. It also sought the decree of permanent injunction restraining the defendant from making uploading any form of video/pictures relating to the business model of plaintiff and details about its franchise model i.e., trade mark 'PETOO' and its confidential information, trade secrets etc., and also prayed to grant decree of injunction directing the defendant not to disclose or reveal its confidential information etc.
4. On issuance of suit summons, the defendant has appeared and filed written statement. In said written statement she has admitted about franchise agreement with plaintiff but she denied rest of the contents of the plaint in para-wise. She denied that due to her inability to conduct the business, the reputation of the plaintiff is affected. She has specifically contended that the plaintiff by playing fraud upon her induced her to enter the franchise agreement and hence, the said franchise agreement is void. Because of said franchise agreement, she has 5 O.S.No.7890/2018 suffered loss to the tune of Rs.3,93,468/- from 13/05/2018 to 16/10/2018 on various heads of expenditure i.e., rent, Electricity and water bill, Salary for staff, Staff's food and accommodation, phone and internet charges and maintenance.
5. She further contended that she has suffered monetary loss of Rs.3,82,000/-towards loss of interest as she paid the interest and invested the amount by borrowing the loan. She also contended that she has suffered mentally and physically harassment and hence, she is entitle for damages of Rs.10 lakhs from the plaintiff. She sold her jewels, pledged some gold to SBI, she availed the loan from friends and relatives for the sake of paying the amount to the plaintiff and team. But she paid the interest and unable to pay the loan. She has spent Rs.1,00,000 towards signing amount, Rs.7,00,000/- towards further payment, Rs.4,50,000/- towards rental advance, Rs.2,50,000/- towards Carpentry and Glass and Rs.11,00,000 towards setting up the outlet, Rs.3,93,468/- towards operational costs and Rs.3,82,000/- towards loss of interest on these 6 O.S.No.7890/2018 amounts. So, she claimed counterclaim directing the plaintiff to refund an amount of Rs.33,75,468/- with future interest @ 24% per annum from date of suit till its realization. She also claimed compensation of Rs.10 lakhs along with future interest @ 24% p.a.
6. The plaintiff has not filed rejoinder to the counter-claim.
7. On the basis of above pleadings, My predecessor in office has framed the following Issues:-
Whether the plaintiff proves that they are the registered owner of the trademark 'PETOO'?
Whether the plaintiff proves that the
defendant is in possession of the
software license and franchisee
licensing and confidential information of the plaintiff?
Whether the plaintiff proves that the defendant is trying to upload in the form of video/pictures relating to business model of plaintiff and details about its franchise, model trademark PETOO and confidential information in social media?
Whether the plaintiff proves that the defendant is trying to damage the goodwill marks and adversely affect the reputation of the trademark of the plaintiff?7 O.S.No.7890/2018
Whether the defendant proves that the franchise agreement dtd.2.5.2018 is null and void and obtained being induced by playing fraud and undue influence and the same is not binding upon her?
Whether the defendant proves that the plaintiff is due a sum of Rs.33,75,468/- for wrongful loss caused by the plaintiff?
Whether the plaintiff is entitled for the decree of permanent injunction as sought for?
Whether the plaintiff is entitled for the decree of mandatory injunctions as sought for?
Whether the defendant is entitled for the decree of declaration as prayed?
Whether the defendant is entitled for the decree of direction as prayed?
Whether the defendant is entitled for the decree of damages as prayed?
What order or decree?
8. In order to prove the case, the plaintiff has not entered the witness box. So, my predecessor in office by order dated 12/07/2022 held that the evidence of plaintiff taken as nil. In order to prove the counter-claim, the defendant has got examined herself as D.W.1 and got marked Ex.D.1 to 54 and 8 O.S.No.7890/2018 D.W.1 was not cross examined by the plaintiff. So, the plaintiff has not at all participated in the proceedings.
9. Heard advocate for the defendant. Perused the pleadings as well as evidence on record.
10. My findings on the above issues are as under:
Issue No.1 to 4:- Does not survive for consideration.
Issue No.5 :- In the Negative, Issue No.6 :- In the Negative, Issue No.7 :- In the Negative, Issue No.8 :- In the Negative, Issue No.9 :- In the Negative, Issue No.10 :- In the Negative, Issue No.11 :- In the Negative, Issue No.12 :- As per final order for the following:
11. ISSUE NO.1 TO 4: These issues are interlinked with each other, in order to avoid repetition and to appreciate the evidence on record, they are taken together for common discussion.
12. The plaintiff has not filed evidence affidavit and has not chosen to proceed with the case. This suit should have been dismissed for default but inspite of that the evidence of plaintiff was taken as 9 O.S.No.7890/2018 nil. Hence, I hold that issues No.1 to 4 are does not survive for consideration and plaintiff is not entitle for any decree in this suit as plaintiff has not proved its case by leading its evidence. Accordingly, issue No.1 to 4 are answered as does not survive for consideration.
13. ISSUE NO.5, 6 and 7 TO 11:- The defendant has claimed the counter-claim and it is her specific case that plaintiff has induced/constrained her to enter the franchise agreement by playing fraud upon her. She has suffered huge loss in the business due to fraud of the plaintiff. Hence, she claimed loss as well as damages and compensation. The plaintiff has not filed rejoinder to her counter-claim but the burden is upon the defendant to prove that she has entitle for recovery of the loss, damages and compensation. In order to discharge the said burden, she relied upon her oral and documentary evidence Ex.D1 to 54. DW1 has filed evidence affidavit by reiterating the contents of the counter-claim.
14. Ex.D1 is the E-mail sent by the plaintiff to the defendant under which the draft Franchise 10 O.S.No.7890/2018 Agreement was sent to defendant. Ex.D-2 is the letter which discloses set up cost for the business. As per this advertisement Rs.14.5 Lakhs have to be invested towards take away of food and Rs.19 Lakhs have to be invested in DINE IN facility. Ex.D-4 discloses about monthly expenses which may be incurred in DINE IN facility. Ex.D- 5 is the acknowledgment dated 01/03/2018 given by the plaintiff stating that they have received Rs.7,00,000/- from the defendant towards Franchise fee.
15. Ex.D-53 is the Franchise Agreement, it was produced by the plaintiff and defendant has obtained it's certified copy and got it marked as Ex.D-53. This document is material to decide the counter-claim of the defendant. It is not in dispute that plaintiff and defendant have entered into Franchise Agreement on 02/05/2018. The defendant has obtained Franchise from the plaintiff with respect to Franchise License and trademark 'PETOO' . As per page No.8, the condition No.2 the right has been given to the defendant to open outlet of the plaintiff's 'PETOO' at R.R.Nagar, Bengaluru. So, with respect to this outlet, 11 O.S.No.7890/2018 this agreement has entered between the parties. The period of agreement was 5 years.
16. The condition No.5.1 of this agreement reads as under:-
5.1. Obligation relating to marks-
The Franchisee undertakes that-
a) He shall use the marks only for the purpose of promoting the business and services;
b) He shall abide by all the reasonable directions of the franchisor in connection with the use and presentation of marks;
c) The equipment regularly used by the franchisee in the business shall carry such words, devices or designs and in such colour and manner as may be directed by the franchisor;
d) He shall do nothing which will predjudice or damage the goodwill in the marks or adversely affect the reputation of the franchisor;
e) If he comes to know about any infringement of the marks of the franchisor by some other person carrying on business in a name and style similar or identical to the marks, he will immediately send information thereof in writing to the franchisor.
17. As per condition No.5.2 the obligation relating to equipment is on the franchisee and franchisee shall bear the cost of the equipments prescribed by franchiser. As per condition No.5.3, general obligations the Franchisee shall bear day to 12 O.S.No.7890/2018 day expenditure like, payments to authorities, taxes and bills and salaries of the employees, rent, electricity bill, water bill etc.,
18. As per condition No.5(k), the franchisee shall pay staff salary on every month within 5 days from due date. As per Condition No.5(o), it is the duty of the franchisee to provide staff accommodation and food. The condition No.7 is with respect to consideration and payments which is as under:
"7. Consideration and payments:
The following amounts shall be paid by the franchisee:
(a) a non-refundable fee of INR 7 (Seven) lakhs to franchisor towards software license and setup, branding, franchise licensing, staff hiring/training and other supports paid on/before the date of execution of this agreement.
b) The cost of the products supplied by the franchisor for sale by the franchisee within 7 days from the date of the bills raised by the franchisor; at the time of store launch product of 1 lakhs of purchase value will be supplied and billed for
(c) Training cost of the staff/employees/personnel of the franchisee within 10 days from the demand raised by the franshiser.
19. As per this condition, the franchisee has agreed to pay non-refundable fee of 7 lakhs to the 13 O.S.No.7890/2018 franchiser towards software license and set up of the business and accordingly, the defendant has paid the same to the plaintiff under cheque and it is acknowledged by the plaintiff under Ex.D-5. Now, the defendant has claimed to refund the same. But this amount is non-refundable fee. The defendant herself has signed the agreement with understanding that this fee is non-refundable to her.
20. As per condition No.7(b), the cost of products supplied by the Franchiser for sale by the Franchisee within 7 days from the date of the bills raised by the Franchiser. Rs.1 lakh shall be paid to the franchiser at the time of store launch product. So, the defendant has claimed this amount also but this amount is paid by her towards costs of the products supplied by the purchaser. Hence, she cannot claim it.
21. As per condition No.8 of this agreement there shall be lock-in period of 9 months from the date of store launch and during this period, the agreement cannot be terminated by the franchisee. But evidence on record discloses that the defendant 14 O.S.No.7890/2018 herself run said outlet from 13/05/2018 to 16/10/2018. So, within the period of 5 months she closed the outlet and as per condition No.8, she cannot terminate this agreement within 9 months.
22. If franchisee fails to continue the outlet or agreement is either violated or terminated during lock-in period, Franchisee will lose all rights mentioned in this agreement-including franchising rights for the location and assets rights as mentioned in 8.6.i and 7.a. The condition No.7(a) is with respect to software license fee Rs.7 lakhs for setup, branding, franchise licensing, staff hiring/training and other supports.
The condition No.5.3 (v) reads as under:-
"Insuranc:- the franchisee shall be insured with a reputed insurance company in an adequate sum against all reasonably foreseeable risks relating to the business including product liability arising out of any act, omission or negligence. Insurance must cover all liability in respect of death or injury to customers, franchisee's personnel or third persons and damage to the property. Franchisee shall provide copies of such insurance policies and proof of premium payments to the franchisor upon its request".
23. As per this condition, the franchisee shall insured the business with a reputed insurance 15 O.S.No.7890/2018 company in an adequate sum against all reasonably foreseeable risks relating to the business but it appears that the franchisee i.e., the defendant has not complied this condition. If she had insured her business then she should have claimed the insurance but she is claiming compensation as against the plaintiff.
24. Under franchisee agreement, the franchisor was liable to help the franchisee to find out suitable location and set up her store and accordingly, the plaintiff has found out the location and set up the said store in the location and defendant ran the business from 13/05/2018 to 16/10/2018 and it appears she suffered loss and she could not continue the business. So, it was choice of the defendant to invest her hard earned amount in said business and if she suffered loss then the plaintiff cannot be held liable stating that plaintiff has induced her to invest the amount.
25. As per Ex.D-49, the letter issued by the defendant to the plaintiff she has invested the 16 O.S.No.7890/2018 amount in business, the relevant contents are as under:-
"The money I have invested is a sole life time savings for his future life and education. Where I can't risk mine and my son's life believing petoo."
26. That means she has invested amount and now she cannot say that plaintiff has played fraud upon her to invest the amount. As per Ex.D38, the FIR in Cr.No.103/2019 is registered as against the plaintiff by the defendant and it is pending before the criminal court. The rest of the documents are produced by her to show that she has invested amount to run the outlet but these documents are not at all helpful to her to prove the counter-claim.
27. Looking to the evidence of the defendant, it appears that she has invested amount with a hope that she will get more profit within a short period but she could not run the business but plaintiff cannot be held liable to pay the loss suffered by the defendant. Her claim for Rs.3,93,468/- towards rent, electricity bill, water bill etc., cannot be granted because under agreement itself it is her duty to pay the rent, 17 O.S.No.7890/2018 electricity bill etc. Her claim towards interest on loan availed by her cannot be granted because it was her choice to invest the amount by availing loan. So, she cannot claim Rs.3,82,000/-.
28. Her claim of refund the franchisee fee of Rs.7,00,000/- and Rs.1,00,000/- towards product's costs cannot be granted because under agreement Rs.7 lakhs was paid by her towards franchisee fees and it is non refundable and Rs.1,00,000/-, the costs of product incurred by the plaintiff at the time of launch of product was paid by her and it is also non- refundable. Hence she cannot claimed this amount i.e., Rs.7 + 1 lakh = 8 Lakh.
29. Her claim of Rs.4,50,000/- towards rental advance, Rs.2,50,000/- towards Carpentry and Glass, Rs.11,00,000/- towards setting up the outlet etc., cannot be granted because under the agreement, the defendant herself has agreed to bear all these costs. She has entered into an agreement dated 02/05/2018 and she ran the business from 13/05/2018 to 16/10/2018 and she filed FIR on 28/06/2019 after appearing in this case on 18 O.S.No.7890/2018 17/12/2018. But looking to the evidence on record and since defendant herself has entered the franchisee agreement with the plaintiff, I hold that the said transactions entered by the defendant with plaintiff cannot be said as fraudulent transactions and it cannot be said that the plaintiff has played fraud upon her to invest the amount or induced her to invest the amount. Hence, I hold that the defendant is not at all entitle for counter-claim claimed in her written statement. Hence, I hold that defendant as well as plaintiff are not entitled for any reliefs in this suit. Hence I answer all these issues in Negative.
30. ISSUE NO.12:- In view of my findings on above issues, I proceed to pass the following:
The suit of the plaintiff is
hereby dismissed for non
prosecution.
The counter-claim of the
defendant is dismissed.
19 O.S.No.7890/2018
No order as to costs.
***
[Dictated to the Stenographer, after transcription, the Script is corrected directly on computer, signed and then pronounced by me, in the Open Court on this 4th day of November, 2024.] [Chinnannavar Rajesh Sadashiv] XVIII Additional City Civil Judge.
BENGALURU.
1. List of witnesses examined on behalf of:
a) The Plaintiff's side:
NIL
b) The Defendant's side:
D.W.1 : Shalini Manesh
2. List of documents marked on behalf of:-
a) The Plaintiff's side:
NIL
b) The Defendant's side:
Ex.D.1 E-mail printout
Ex.D.2 to 4 Brochures
Ex.D.5 Acknowledgment of funds received dt.
01.03.2018
Ex.D.6 to 13 Invoice
Ex.D.14 5 Bank Challans
Ex.D.15 6- Electricity Bills
Ex.D.16 Tax invoice
Ex.D.17 Cash Bill
Ex.D.17(a) Carbon copy
20 O.S.No.7890/2018
Ex.D.18 Estimate / quotation (3 sheets)
Ex.D.19 to 22 Bills
Ex.D.23 to 28 Invoices
Ex.D.29 3 cash receipts issued by Metro
wholesale
Ex.D.30 to 32 Invoices
Ex.D.33 & 34 Bills
Ex.D.35 & 36 Grocery Bills
Ex.D.37 2 Bank challans
Ex.D38 Certified copy of FIR in
Cr.No.103/2019.
Ex.D.38(a) Certified copy of the complaint.
Ex.D.39 to 41 Loan Key facts statement Ex.D.42 Statement of account of defendant Ex.D.43 Passbook Ex.D.44 Statement of account of Sreelekha Ex.D.45 Certified copy of the legal notice dated 15.10.2018 Ex.D.46 to 50 Print outs of E-mails Ex.D.51 Certificate under Sec. 65B of Evidence Act.
Ex.D.52 Certified Copy of memo dated 02.11.2018 Ex.D.53 Certified Copy of Franchise Agreement Ex.D.54 Certified Copy of Legal Notice XVIII Additional City Civil Judge.
BENGALURU.