Delhi District Court
M/S. Endocura Pharma Private Limited vs Hijam Rajendra Singha on 17 May, 2022
IN THE COURT OF MS. TWINKLE WADHWA: Ld.
ADDITIONAL DISTRICT JUDGE CENTRAL -03:
TIS HAZARI COURTS: DELHI
TM No. 1068/16
CNR No. DLCT01-002957-2016
In the matter of :-
1. M/s. ENDOCURA PHARMA PRIVATE LIMITED
Plot No. 3295, Street No. 85,
B-Block, Main Market, Sant Nagar,
Burari, Delhi -110084 ... Plaintiff
Vs.
1. HIJAM RAJENDRA SINGHA
House No. 628, Sector-4, Near Balak Ram Hospital,
Timarpur, Civil Lines, Delhi -110054.
2. HIJAM GOURI
House No. 628, Sector-4, Near Balak Ram Hospital,
Timarpur, Civil Lines, Delhi -110054.
3. M/S. SIROY LIFE SCIENCES
Plot No. 81, First Floor, Street No. between 5 & 6,
Shiv Mandir, Wazirabad, Delhi -110054.
4. M/S. SIROY LIFE SCIENCES PRIVATE LIMITED
Plot No. 81, First Floor, Street No. between 5 & 6,
Shiv Mandir, Wazirabad, Delhi -110054.
5. M/S. CYCUS PHARMA
Village Harraipur, Baddi Nalagarh Road,
District Solan, Himachal Pradesh. ...Defendants
TM No. 1068/16 Page No. 1 of 20
Date of institution of the appeal : 18.01.2016
Date on which order was reserved : 09.05.2022
Date of decision : 17.05.2022
Conclusion : Dismissed
JUDGMENT
1. Vide this judgment, I shall dispose off the suit for declaration and permanent injunction, passing off, Trade Mark Infringement, Damages and Rendition of Accounts filed against the defendant.
The Case of Plaintiff
2. It is the case of the plaintiff that it is a private limited company registered under Companies Act. At present Sh. Himanshu Chuahan is a Director of the plaintiff Company. He is fully conversant with the facts and circumstances of the case. Hence he is authorized to sign and file the present suit.
3. Plaintiff is engaged in to the business of manufacture, sale and distribution of pharmaceutical and nutraceutical products for medicinal purposes and all kinds of drugs and chemicals under its various Trademarks/ names such as "SUN SIPS", "SUN OKTA", "HIJAM", "O'FERRUM", "ENDOCAL", "SANADRYL", "SUNZONA", "SUNZEF", "SUNFONA" etc.
4. It is the case of plaintiff that it is engaged in the manufacturing, marketing and selling of above trademarks including "SUN SIPS" since TM No. 1068/16 Page No. 2 of 20 01.10.2010. Plaintiff is a prior adopter and user of Mark "SUN SIPS"
and has been continuously and extensively using the same across India. Its Trademark is widely advertised as well.
5. Defendant no. 1 is the erstwhile Director of plaintiff Company. Defendant no. 1 alongwith Smt. Geeta Chauhan had formed plaintiff Company and they were its first Directors.
6. At present the Trademark of the plaintiff is being used by defendant no. 3, 4 and 5 Companies which is being run by defendant no.1 and his wife defendant no. 2.
7. It is the case of plaintiff that initially the defendant no. 1 was trading under his sole proprietorship firm namely "M/s. Endocura Pharama". On 24.11.2010, defendant no. 1 had also applied for registration of the Trademark "SUN SIPS" before Registry under his proprietorship firm under Class -5 of the Trade Marks Act. However, as defendant no. 1 remained unsuccessful to develop and sell its products profitably in the market, hence defendant no. 1 alongwith Smt. Geeta Chauhan got plaintiff Company incorporated as a private limited company. Smt. Geeta Chauhan and defendant no.1 were the first Directors and were allotted 50% shares each. Memorandum of Association (MOA) of the Company was duly registered as well, thereby taking over the business of the defendants proprietorship firm namely TM No. 1068/16 Page No. 3 of 20 M/s. Endocura Pharma and hence the sole proprietorship of defendant no. 1 ceased to exist, all the assets of the said proprietorship firm were taken over by the plaintiff. Thereafter Trademark "SUN SIPS" was being used by plaintiff Company. Plaintiff Company started using the trademark "SUN SIPS" and started running into profits, and established goodwill and reputation in the market. Over the years, trademarks of the plaintiff especially the Mark "SUN SIPS" had become a 'distinctive' and 'well known' mark under Section 2 (z) & (g) of the Trademarks Act, 1999.
8. The approximate sale figures of the of the plaintiff are mentioned in para-11 of the plaint. All the documentation of the plaintiff Company was managed by defendant no.1. However defendant no.1 started engaging himself in the activities which were against the interest of the Company.
9. It came to the knowledge of the plaintiff Company that in September 2014, that defendant no. 1 was misusing the funds of the plaintiff Company by getting them transferred into his own personal accounts instead of the Company. It also came to the knowledge of plaintiff Company that defendant no. 1 was also simultaneously trading under the name of another entity namely M/s. Siroy Life Sciences which is defendant no. 3, having similar business interest. Thus he was running a parallel business by marketing and trading in similar nature of TM No. 1068/16 Page No. 4 of 20 products. Such acts of defendant no. 1 were unethical and in violation of Memorandum and Articles of Association of the plaintiff Company. Also defendant no.1 filed a separate trademark for registration of the Trademark "SUN SIPS" on 11.08.2015 in the name of his new Company i.e. defendant no. 3. On being confronted by plaintiff, defendant no. 1 instead of giving explanation for his acts and conducts, decided to resign from the directorship of the plaintiff Company vide E-mail dated 15.010.2015.
10. A legal notice dated 20.11.2015 was also issued by defendant no. 1 to the plaintiff company. Plaintiff sent a reply vide letter dated 07.12.2015. On 21.10.2015, defendant no. 4 issued a public notice in the daily newspaper namely "The Hindu" stating that defendant no. 4 was the owner and proprietor of the impugned Trademark. Further defendants have also started using a similar and identical Mark i.e. "SUN SIPS DROPS (Vitamin D-3, 400 I.U.)" in a deceptive manner since October 2015, being manufactured by defendant no. 5. Hence defendants are using plaintiff Company's Trademark "SUN SIPS" and are trading to pass off his own goods as that of the plaintiff Company. The said trademarks have been used by defendant unauthorizedly, without the permission of the plaintiff. Hence various rights of the plaintiff under Trademarks Act, 1999 and Copy Right Act, 1957 have been infringed.
11. Further the present Court has territorial jurisdiction to try the TM No. 1068/16 Page No. 5 of 20 present suit under Section 134 of the Trademark Act as Registered Office of the plaintiff is situated at Burari, Delhi, whereas defendant works for gain at Wazirabad, Delhi. Hence the present suit is filed for declaration, permanent injunction, delivery up of goods and damages before this Court.
The Case of Defendants nos.1 to 5.
12. A joint written statement has been filed on behalf of the defendants nos. 1 to 5.
13. It is the case of defendants that a Settlement Deed dated 01.11.2014 was executed by the Defendant no. 1, Sh. Himanshu Chauhan and Smt. Geeta Chauhan wherein the right to use the Trademark "SUN SIPS" was given to defendant no.1. The said document has not been filed by plaintiff before this Court. The said Settlement Deed was signed by all the parties, copy of which is filed on record. Hence plaintiff has not come to the Court with clean hands.
14. It was defendant who invented and adopted the said Trademark. It is further mentioned that plaintiff had also filed one application for registration before Trademark Registry, which was much later in date as compared with the application filed by defendant no. 1 under Class-5.
15. It is further the case of defendants that defendants were owner of Trademark "SUN SIPS" prior to incorporation of plaintiff Companies.TM No. 1068/16 Page No. 6 of 20
Thereafter, in the Company, it was used jointly by both the parties and by way of Settlement Deed dated 01.11.2014, the said Trademark again came to the defendants. It is claimed that it is the defendants' who have invented and adopted the Trademark "SUN SIPS" and are also prior user of the impugned Trademark "SUN SIPS".
16. It is further mentioned that no justification was given by plaintiff for claiming damages to the extent of Rs. 5,00,000/-, it is an imaginary figure which is being claimed. It is admitted by defendant that he alongwith Smt. Geeta Chauhan were first Directors of plaintiff Company. It is admitted that defendant no. 1 and 2 are husband and wife and it is admitted that defendant no. 3 and 4 belong to defendant no. 1 and 2, however it is denied that defendant no. 5 is being run by defendant no. 1. As far as defendant no. 5 is concerned, it is denied that defendant no. 5 is the manufacturer who is manufacturing the products under the infringing Mark belonging to the plaintiff.
17. It is admitted that defendant was earlier trading under the name and style of sole proprietorship firm M/s. Endocura Pharma. It is admitted that defendant no.1 filed an application for Trademark Registration of "SUN SIPS" on 24.11.2010. It is admitted that the primary main purpose of plaintiff Company was to take over the entire running business of the erstwhile proprietorship concern of the defendant no.1. It is admitted by defendants in their written statement that all the TM No. 1068/16 Page No. 7 of 20 tangible and intangible assets of the erstwhile sole proprietorship firm were taken over by the plaintiff Company. However it is submitted that defendants are entitled to use the Trademark on account of Agreement / Settlement between the parties dated 01.11.2014 which was signed by both the parties.
18. Further it is admitted by defendant in the written statement that over the years "SUN SIPS" has become a distinctive and well known mark and it belonged to defendant only. Further it is submitted that plaintiff as well as defendants have jointly incurred expenses for advertisement of this Mark. It is admitted that since the year 2013, sales of "SUN SIPS" has been tremendous and has acquired goodwill and reputation.
19. It is further submitted by defendant that responsibilities with respect to the documentation were handled jointly by both. Further the responsibilities were entrusted to the defendant no.1 by the plaintiff on account of good faith and bona fide trust. Further it is admitted by defendant that individual proprietorship was taken over by the plaintiff Company, defendant no.1 ceased to have any individual proprietary rights over the assets of the said firm including the Mark "SUN SIPS".
20. It is submitted by Counsel for the defendant that defendant was prior user of the same and he was the one who invented this Mark.
TM No. 1068/16 Page No. 8 of 20Further after the agreement between the parties, defendant has absolute rights to use the same. All other averment made in the plaint are denied.
The Issues and Evidence.
21. From the pleadings of the parties, following issues were framed vide order dated 07.05.2018:-
1. Whether the plaintiff is entitled to the decree of declaration in respect of Trade Mark "SUNSUPS" against the defendants? OPP
2. Whether the plaintiff is entitled to a decree of Permanent Injunction against the defendants? OPP
3. Whether the plaintiff is entitled to a decree of damages to the extent of Rs. 5,00,000/- against the defendants? OPP
4. Whether any settlement dated 01.11.2014 took place between defendant no.1 and Sh. Himanshu Chouhan and Ms. Geeta Chauhan? OPD
5. Relief.
Thereafter, matter was fixed for plaintiff's evidence.
22. In support of its case, plaintiff examined Sh. Himanshu Chauhan s/o Sh. Umesh Kumar Singh, Director of M/s. Endocura Pharma Pvt. Ltd. as PW-1. He has reiterated the facts of the plaint in his affidavit Ex.PW1/A. He relied upon documents i.e. Ex.PW1/1 to Ex.PW1/20.
S No. Exhibits Particular TM No. 1068/16 Page No. 9 of 20 1 Ex.P-1/1 is de-exhibited Copy of Board Resolution dated 27.11.2015 2 Ex.P1/2 Copy of Memorandum of Association. 3 Mark A Ex.PW1/3 which is copy of Registrar of trademarks for the mark SUN SIPS is de-exhibited. 4 Ex.P-1/4 is de-exhibited Copies of notices and e-mails which have been exhibited as Ex.P1/4(Colly) are de-exhibited as neither the copies nor the originals are on record. 5 Ex.P1/5 is de-exhibited Copy of private placement offer dated 27.7.2015 and e-mails 12.8.15 which are exhibited are de- exhibited as neither the copies nor the originals are on record. 6 Ex.P1/6 is de-exhibited Copy of Resolution of extra ordinary General Meeting dt 27.7.2015 is de-exhibited as neither the copy nor the original is on record. 7 Mark - B (Colly) Ex.P1/7 which is Copy of Registrar of Trademarks for the mark SUN SIPS under no. 3028872 dt 11.08.2015 is de- exhibited 8 Mark - C Copy of the Registrar of Trademarks amendment (TM-16 for the mark SUNSIPSdt 8.9.15 is de-exhibited. TM No. 1068/16 Page No. 10 of 20 9 Ex.P1/9 which is the copy of e- mail dated 19.8.2015 by defendant no. 1 is de-exhibited as neither the copy nor the original is on record. 10 Ex.P1/10 (OSR) Copy of resignation of defendant no.1 from Directorship of the plaintiff company. 11 Ex.P1/11 (OSR) Copy of notice dated 20.11.2015 by defendant no.1 12 Ex.P1/12 Copy of reply of notice dated 7.12.2015 13 Mark -D ExP1/13 which is copy of public notice issued by defendants in daily newspaper "The Hindu" dated 20.10.15 is de-exhibtied being photocopy. 14 Ex.P1/14 Copy of letter dated 3.12.2015 sent by the defendant to the plaintiff's distributor. 15 Ex.P1/15(Colly) Original carton of plaintiff's product "SUN SIPS" 16 Ex.P1/16 Original carton of plaintiff's product "SUN SIPS" 17 Ex.P1/17 Original summary of sales figure 18 Ex.PW1/18 and Ex.P1/19 Copy of printout online advertisement made by defendants using mark SUNSIPS & HIJAM. 19 Ex.P1/20 Certificate u/s 65B of Indian Evidence Act
He has been cross-examined by Counsel for the defendant.
TM No. 1068/16 Page No. 11 of 20Thereafter matter was fixed for defendant evidence.
23. Defendant no. 1 Sh. Hijam Rajender Singha s/o Shri Rajo Hijam examined himself as DW-1. He has reiterated the facts of the plaint in his affidavit Ex.DW-1/A. He relied upon documents i.e. Ex.DW1/1 to Ex.DW1/16.
S No. Exhibits/ Marks Particular
1 Ex.DW1/1 which is copy of Board
Resolution dated 24.09.2019 is de-
exhibtied.
2 Mark-A Ex.DW1/2 which is copy of settlement
deed which is de-exhited being copy.
3 Mark-B(Colly) Ex.DW1/3 which is copy of drug
approval which is de-exhibited being
copy.
4 Mark-C Ex.DW1/4 which is Trademark
application bearing no. 3100787 is de-
exhibted.
5 The trademark applications bearing nos.
2058434 and 3028872 which are
exhibited as Ex.DW1/5 and Ex.DW1/6
are de-exhibited and they are already
marked as Mark B and Mark A on
4.12.2018.
He was cross-examined by Ld. Counsel for the plaintiff. Thereafter, the matter was fixed for final arguments.
TM No. 1068/16 Page No. 12 of 20The Reasons for Decision
24. I have heard both the sides and gone through the record.
25. The admitted facts in this case are that defendant no.1 had a sole proprietorship firm M/s. Endocura Pharma wherein he started using this trademark 'SUN SIPS'. It is admitted that thereafter plaintiff Company was incorporated which had taken over all the business and trademark of the said Sole Proprietorship Firm. It is admitted by both the parties that plaintiff Company had only two Directors namely defendant no.1 and Smt. Geeta Chauhan. It is also admitted by both the parties that after the resignation of defendant no. 1, the plaintiff Company had two Directors namely Smt. Geeta Chauhan and Mr. Himanshu Chauhan. Mr. Himanshu Chauhan has filed the present suit and has come to the witness box on behalf of the plaintiff to prove its case.
26. In his cross-examination, PW-1 Sh. Himanshu Chauhan has admitted that a settlement was prepared with respect of Trademark 'SUN SIPS' and he was party to the said settlement. The relevant extract of the cross-examination of PW-1 is as follows:-
"It is correct that a rough settlement was prepared in respect to the trade mark SUNSIP. I was party to the said settlement."
27. Now coming to the settlement placed on record by the plaintiff, TM No. 1068/16 Page No. 13 of 20 the said settlement has been signed by Sh. Himanshu Chauhan on behalf of his mother Smt. Geeta Chauhan. It is the arguments of Counsel for the plaintiff that since Smt. Geeta Chauhan had herself not signed this document, hence this document is not binding on the plaintiff Company. However I do not agree with the submissions made. The said Company had only two Directors at the time of the settlement i.e. Defendant no.1 and Smt. Geeta Chauhan. This Agreement was entered into between those two Directors and Sh. Himanshu Chauhan had signed on behalf of Smt. Geeta Chauhan. Hence one of the Directors of this Company, Defendant no.1 says that this document was executed between two Directors. The other Director Smt. Geeta Chauhan has not come to the Court to say that she had not authorized Sh.Himanshu Chauhan (her son) to execute this Agreement on her behalf.
28. It is the argument of Counsel for the plaintiff that there is no GPA to prove that Sh.Himanshu Chauhan was authorized. However Sh.Himanshu Chauhan himself admitted he had signed on this Agreement. It is not stated by Sh.Himanshu Chauhan anywhere that he was not authorized by his mother to sign on this Agreement. Authorization could be oral as well. It is not the case of Sh.Himanshu Chauhan that he signed on this agreement under any misrepresentation or undue influence. There are no pleadings on this fact by Sh.Himanshu Chauhan. There are no pleadings to this extent on TM No. 1068/16 Page No. 14 of 20 record that Smt.Geeta Chauhan had not authorized Sh.Himanshu Chauhan to sign this agreement. Hence when Smt. Geeta Chauhan is not challenging this agreement nor Sh. Himanshu Chauhan is denying the execution of this Agreement and rather admitting being a part of it, this argument that this Agreement is not binding on plaintiff cannot be accepted.
29. It is further the argument of Counsel for plaintiff that there was no 'Board Resolution' for the purpose of entering into such agreement or ratifying the same. However it is admitted by both the parties that there were only two Directors of this Company who had entered into Agreement with each other. There was no third Director of this company. There were no shareholders in this Company as on that date. Relation between the parties/ Directors were sour and not cordial. However none of the Directors of the plaintiff Company are challenging the agreement. Defendant no.1 has admitted this document and Smt. Geeta Chauhan has not come to the Court to deny this settlement. Hence all these arguments are more of technical in nature when the settlement agreement in itself is proved and admitted. And cases should be decided on merits and not on technicalities.
30. The relevant extract of the settlement Agreement between the parties which is handwritten is as follows:-
" We Mr. H. R. Singha & Mr. Himanshu Chauhan on behalf TM No. 1068/16 Page No. 15 of 20 of Mrs. Geeta Chauhan (Director) jointly agree to settle the difference as follows:-
1. Trademark Hijam will be retained by the company ENDOCURA PHARMA PVT. LTD and 'SunSips' will be given to Mr. H. R. Singha with effect from 31 March 2015.
2. Trademark Endocura Pharma will be assigned to ENDOCURA PHARMA PVT. LTD.
3. Dues of Arjun Pharma Rs. 87,000/- or any other due amount will be certified through ledger and will be adjusted against Mr. H. R. Singha.
4. Trademark Endocal will given to Mr. H.R. Singha and SunFona will retain with ENDOCURA PHARMA PVT. LTD.
5. Mr. Himanshu Chauhan will be appointed as a Additional Director with effect of 31.10.2014 and Mr. H. R. Singha will resign accordingly with effect of 1st April 2015.
6. Balance Sheet will be prepared as on 31 Oct 2014. Will be updated upto 10 Nov 2014
7. First Mrs. Gauri will provide details of cash collection from ME and mobile bills of (rest line not legible) Signed By parties"
31. In view of the above Settlement Agreement, it has clearly come on record that right to use the said trademark 'SUN SIPS' was given to the TM No. 1068/16 Page No. 16 of 20 defendant no. 1. Hence there is no merit in the present suit.
32. It is further the argument of Counsel for the plaintiff that defendant was using its Trademark "HIJAM" which as per the Agreement was to be used by plaintiff exclusively. This itself shows that defendants had no intention to give effect to the terms of the Agreement. However, there is no issue framed regarding the same nor any evidence led specifically on the same nor the said issue is necessary for deciding the present suit.
33. Further it is the own case of plaintiff that he has complied with part of this Agreement with respect to resignation of defendant and appointment of his son Sh. Himanshu Chauhan as Director of this Company. The relevant quote of the evidence of PW-1 / Sh. Himanshu Chauhan from his evidence by way of affidavit is as follows:-
"Instead of taking corrective measures, defendant No. 1 without giving any due explanation for his aforesaid acts and conduct, he desired to work out future formulae of settling differences between directors and accordingly seven points were hand written for future implementation. Defendant No.1 has kept the original copy with him. None of the point written therein was taken up by defendant no. 1 except a part of point No. 5 for appointment of the Deponent as additional Director with effect from 31.10.2014 and second part of resignation by Defendant No. 1 from directorship of TM No. 1068/16 Page No. 17 of 20 the company with effect from 01.04.2015 was not implemented due to his promise to continue as director of the plaintiff company and work in the interest of plaintiff. Hence, Defendant No.1 did not act upon the hand written points and bring them before board of directors for its consideration and approval by way of board of directors for its consideration and approval by way of board resolution during the period 01.11.2014 to 15/.10.2015 (date of resignation of Defendant No. 1) as per provisions of companies act. Plaintiff Company cannot be blamed for not taking the aforesaid hand written points on its records without following the due procedure laid down in Companies Act. "
34. Hence it is the case of plaintiff that particular part of her agreement which is for the benefit of plaintiff Company i.e. appointment of Sh. Himashu Chauhan as Director was complied with, however, it is submitted that rest of the parts of the Agreement were not complied with. However this argument cannot be accepted. When it is the own admission of plaintiff that this agreement was complied with by them with respect to appointment of one Director, it cannot be accepted that they will not comply with other parts of this agreement.
35. The issue-wise findings is as follows:-
36. Issue no. 1 Whether the plaintiff is entitled to the decree of TM No. 1068/16 Page No. 18 of 20 declaration in respect of Trade Mark "SUNSUPS" against the defendants? OPP
37. In view of above discussion, plaintiff is not entitled to the decree of declaration thereby restraining the defendant no.1 or his companies from using the trademark SunSips. This issue is decided against the plaintiff.
38. Issue no. 2 Whether the plaintiff is entitled to a decree of Permanent Injunction against the defendants? OPP
39. In view of above discussion, the plaintiff is not entitled to this relief. This issue is decided against plaintiff.
40. Issue no. 3 Whether the plaintiff is entitled to a decree of damages to the extent of Rs. 5,00,000/- against the defendants? OPP
41. In view of above discussion, the plaintiff is not entitled to this relief as there are no rights with respect to this Trademark in favour of plaintiff which is infringed or goods are passed off. This issue is decided against plaintiff.
42. Issue no. 4 Whether any settlement dated 01.11.2014 took place between defendant no.1 and Sh. Himanshu Chouhan and Ms. Geeta Chauhan? OPD
43. In view of above discussion, the settlement is proved between the parties so mentioned in this issue. This issue is decided in favour of TM No. 1068/16 Page No. 19 of 20 defendant.
Relief.
44. In view of above discussion, the present suit is dismissed. Decree sheet be accordingly prepared.
45. The file is consigned to record room after due compliance.
Digitally signed by TWINKLE TWINKLE WADHWA WADHWA Date: 2022.05.17 12:21:30 +0100 Announced in the open Court (Twinkle Wadhwa) On this 17th Day of May 2022 Ld. ADJ-03, Central THC/Delhi/17.05.2022 TM No. 1068/16 Page No. 20 of 20