Gujarat High Court
Babul Products Private Ltd. vs Zen Products on 7 July, 2005
Equivalent citations: (2005)3GLR2309, 2005(31)PTC135(GUJ)
Author: K.S. Jhaveri
Bench: K.S. Jhaveri
JUDGMENT K.S. Jhaveri, J.
1. The present Appeal From Order is directed against the order dated 31st March 2005 passed by Joint District Judge (Fast Track Court No. 8), Vadodra, below Exh. 5 in Civil Suit No. 6 of 2005, whereby the trial Court has rejected the Application Exh. 5.
2. The appellant-plaintiff is a private limited company established by the partners of M/s. Babul Products wherein there are two groups, majority and minority. The partnership firm has handed over complete business to the private limited company and the trademark has been transferred by way of registered user to the present plaintiff. Since one of the partners and shareholder of the plaintiff-Company has allegedly tried to infringe the trademark of the original partnership firm, the present plaintiff (hereinafter referred to as the registered user or the company) has initiated legal proceedings.
3. Before proceeding with the matter, it is required to be noted the establishment of the partnership and family history as emerging from the record as under:
3.1 Nanubhai Majethia opened a pan shop in the year 1955 in the of Babul Pan Shop, Opposite Dhana Suthar Pole. Another Pan Shop near Kalupur Post Office was also opened by him in 1958. From 1963, the said Nanubhai started making pan chatni and flavoured tobacco under the name 'Babul 135 Zafrani Zarda' with a device of horse. The brother of Nanubhai, Maganbhai, was doing a job at that time.
3.2 On 21st September, 1965, first partnership deed of M/s. Babul Products was executed with effect from 5th November, 1964, between Nanubhai and Maganbhai. The firm was reconstituted from time to time with the sons of the said two brothers, being inducted as partners and the last partnership deed in dated 1st April, 1998.
3.3 On account of substantial expansion of business, the appellant Company-Babul Products Pvt. Ltd. was incorporated on 11th December 1987 and Maganbhai was appointed as Chairman of the Company. On 16th October 1989, a registered user agreement was executed between M/s. Babul Products and M/s. Babul Products Pvt. Ltd. with effect from 15th January, 1990 permitting the appellant-Company to use the trademark of the firm. The said agreement was renewed from time to time i.e. on 1st April 1996 and 19th March 1999 for a period of 10 years and an automatic renewal for a further period of 10 years. Ultimately, in the year 1990, the appellant-Company established its own factory and started manufacturing pan masala and chewing tobacco which was sold under the brand name 'Babul'.
3.4 Rajendra Majethia, the son of Nanubhai, who was involved in the business with his father since 1981, particularly, for blending tobacco, was appointed as the Managing Director of the appellant-Company on 1st April, 1993.
3.5 On 1st April, 1998, the final partnership deed of the firm, M/s. Babul Products, was executed in which Nanubhai's family had 67% share and Maganbhai's family had 33% share.
3.6 On 29th September, 1998, the last allotment of shares of the appellant-Company was done, pursuant to which the shareholding pattern of the Company was 60% of Nanubhai's family and 40% of Maganbhai and brothers' family.
3.7 In December, 1998, both Maganbhai and Nanubhai resigned as the Chairman and the Director of the Company respectively.
3.8 As stated above, on 19th March, 1999, fresh registered user agreement was executed between the firm, M/s. Babul Products, and the appellant - Company, granting the appellant Company license to use the registered trademarks of the firm. The duration of the agreement was for 10 years and automatic renewal was provided for a further period of 10 years. The agreement could be terminated by the proprietor after giving 60 clays' notice to the licensee. The agreement authorised the licensee to discover and prosecute infringement or passing off in relation to the trademarks, copyright matter and artistic works and take action against the same after obtaining consent of the proprietor.
3.9 In the month of January-2000, Mukesh resigned as a Director of the Company with a view to go to United States of America. It is his case that he resigned so that there was no hindrance in day to day functioning of the appellant-Company and on an assurance that Mr. Jay from minority group would be taken as a Director. However, Mr. Jay was not appointed and, therefore, according to him, the Nanubhai family fraudulently engineered management control of the company.
3.10 In the month of January-2000, a draft deed of assignment of trademarks prepared by the firm, M/s. Babul Products, in favour of M/s. Babul Industries Pvt. Ltd. where the shareholding was 66:34. It is contended that this was the cause of the dispute and Mr. Mukesh and Mr. Jay refused to sign the deed, pursuant to which the Nanubhai group forcibly stopped manufacturing activities of the firm and shifted all record to the office of the appellant-Company and denied access to the Maganbhai group.
3.11 Accordingly, on 15th February, 2000, with consent, the manufacturing activities of the firm were stopped and an Indemnity Bond dated 16th February, 2000 was executed for surrender of central excise registration, which was signed by all the partners. An intimation, duly signed by all the partners, was also given to the Department vide letter dated 8th August, 2001 regarding stoppage of activities. Thereafter, the income of the firm was on account of payment of royalty by the appellant-Company. It is alleged that from this date, the appellant-Company became the exclusive licensee and sole manufacturer of tobacco products marketed under the brand name 'Babul' and the said name identified the product as coming from the Company alone.
3.12 In the month of April-2000, the marketing activities of the products were transferred to the appellant-Company, and Rashmin, the son of Mohanbhai who was looking after the affairs of M/s. Babul Marketing Pvt. Ltd., addressed a letter to all the distributors that Babul Products would be now marketed by the appellant-Company.
3.13 M/s. Urmin Products Pvt. Ltd., which is stated to be of the Nanubhai group, was incorporated in the month of April/June 2000. Rajendra Majethia, the son of Nanubhai, applied for registration of certain trademarks in the name of 'Babul' in his own name. In the same year M/s. Zen Industries of Mukesh was formed, then name changed to M/s. Zen Industries and thereafter converted into Zen Industries Pvt. Ltd. Accordingly, Rashmin, Nikhil and Mukesh applied for various trademarks in the name of 'Babul'. One Uday Ajgaonkar also filed an application for the trademark, 'Babul', for tobacco in Mumbai registry.
3.14 Thereafter, Nanubhai was appointed as a Director of the appellant-Company in the month of November-2000. According to the appellant, sales (excluding excise) of the appellant-Company went up from Rs. 57,45,58,031=00 in the year 1999-2000 to Rs. 1,27,70,69,339=00 in 2003-2004 and net profit rose from Rs. 6,21,05,650=00 in 1999-2000 to Rs. 17,07,18,603=00 in 2003-2004.
4. Maganbhai group filed Civil Suit No. 1437 of 2004 in the month of May-2004 before the City Civil Court at Ahmedabad against Nanubhai group for various reliefs, including for withdrawal/non-processing of the applications for registration, stated to have been made by the defendants. On 26th May 2004, a purshish was filed in the above suit by the plaintiffs and the defendants that they would not directly or indirectly adopt trademarks of M/s. Babul Products.
4.1 In the month of June-2004, Civil Suit No. 1740 of 2004 was filed in the City Civil Court at Ahmedabad by Mukesh in the name of M/s. Babul Products against the appellant-Company seeking an injunction against the appellant-Company from using its current labels/marks on the ground that they were deceptively similar to the marks/labels of the firm, M/s. Babul Products. And, in that suit, ad interim injunction restraining the appellant-Company from making any change in the labels/marks was granted.
4.2 Thereafter, on 28th June, 2004, an application was moved by the Nanubhai group to withdraw the aforesaid suit. Since the said application was filed without the consent of all the partners and with a view to serve private end of Mukesh, it was rejected by the order dated 21st September, 2004, against which a Civil Revision Application, being 356 of 2004 , was filed before this Court, which is pending.
4.3 On 25th December, 2004, manufacturing activities at the appellant-Company came to a halt since required statutory modifications could not be made in the labels on account of the ad interim relief granted in Civil Suit No. 1740 of 2004 and objection of Mukesh to modification application by the company.
4.4 Thereafter, in the month of January-2005, Baghban products were stated to have been launched by M/s. Urmin Products Pvt. Ltd. On 17th January, 2005, an order was passed by the City Civil Court modifying the ad interim injunction in Civil Suit No. 1740 of 2004, permitting the appellant-Company to incorporate the statutory changes in the labels/marks of the products.
4.5 Mukeshbhai, who had activated M/s. Zen Products for manufacturing tobacco products, opened bank account on 1st February, 2005. Thereafter, on 2nd and 3rd February, 2005, applications were moved by Mukeshbhai for registration under the Sales Tax Act and Central Excise Act for M/s. Zen Products respectively.
4.6 On 4th February, 2005, an inquiry was made for procuring raw material for manufacturing flavoured chewing tobacco by Mukesh. Further, a letter of the appellant-Company to M/s. Babul Products was written seeking consent of taking infringement action against Mukesh, who had initiated steps to launch tobacco products under the 'Babul' trademark, which consent was granted vide letter dated 7th February, 2005.
4.7 One of the partners Shri Mukesh issued notice on 6th February, 2005 in the name of M/s. Babul Products purportedly terminating the registered users agreement forthwith. However, by a letter dated 8th February, 2005, the Nanubhai group informed the appellant-Company that the said communication was not a decision or an action of the firm and confirmed that the registered user agreement was valid and subsisting.
4.8 On 7th February 2005, Mukesh and others filed Civil Suit No. 231 of 2005 in the name of the firm, M/s. Babul Products, against the appellant-Company and others for permanent injunction against the appellant-Company from using the licenced trademarks in connection with flavoured chewing tobacco etc. In the said suit, ad interim injunction was not granted.
4.9 Mukesh and others also filed Civil Suit No. 232 of 2005 on 7th February, 2005 in the name of the firm, M/s. Babul Products, against M/s. Urmin Products Pvt. Ltd. and others for injunction from manufacturing, marketing and using trademark/label 'Baghban'. In that suit also, ad interim injunction was not granted.
4.10 Thereafter, on 9th February 2005, Mukesh and others issued notice to Nanubhai and others for dissolution of the firm M/s. Babul Products, with immediate effect and invoked the arbitration clause. Further, on 10th February, 2005, Mukesh again issued notice to Nanubhai and others intimating that he would manufacture and market flavoured chewing tobacco under the brand name - 'Babul' and use trademarks/copyrights and label marks of the firm for the same.
4.11 On 13th February, 2005, Mukesh commenced manufacturing and marketing of the products under the name 'Babul'. The Nanubhai group has disputed this date since it is their case that on 14th February, 2005.
5. On 14th February, 2005, an application being CMA No. 63/2005 was filed by Nanubhai group in the City Civil Court at Ahmedabad under Section-9 of the Arbitration and Conciliation Act, 1996. The opponents appeared on caveat; however, no ad interim injunction was granted.
5.1 Thereafter, on 23rd/26th February 2005, caution notices were issued by the appellant-Company in newspapers that products carrying 'Babul' brand had been recently introduced in the market, which were not authentic, and that purchasers should confirm that the tins carried the name of the company to ensure that they were getting the original goods.
5.2 Pursuant to the aforesaid caution notices, Mukesh responded on 28th February 2005, in the form of public notices published in "Divya Bhaskar"-Vadodara edition, stating that the marks were used by Zen Products as co-proprietor and that the Nanubhai group had not obtained any relief against the sale and, therefore, he was entitled to use the trademark as an owner and, therefore, it should be informed to him if the Babul Products were not available or anybody was interfering in the sale of the same by Zen Products.
5.3 Thereafter, on 1st March, 2005, Civil Suit No. 6 of 2005 was filed by the appellant-Company in the District Court at Vadodara for an injunction restraining the defendant-M/s. Zen Products from manufacturing or marketing their goods under the name 'Babul Zafrani Zarda 135' and in the said suit, ad interim injunction was granted.
5.4 Appeal From Order No. 109 of 2005 was filed and on 7th March, 2005, wherein ad interim order was modified and the trial Court was directed to complete the hearing of Exh. 5 in the above suit before 28th March 2005. In the appeal against the aforesaid order, the Honourable Supreme Court of India directed the trial Court to dispose of the application on priority basis and that till disposal of the application, keeping Section-53 of the Partnership Act, 1932 in mind, it was ordered that neither side should use the trademark 'Babul' or any deceptively similar mark.
5.5 Pursuant to the Supreme Court's direction, the learned Fast Track Judge, Vadodara passed an order on 31st March, 2005 rejecting the application for injunction Exh. 5 in the said suit. Against the said order of the learned Fast Track Judge, Vadodara, the appellant-Company is before this Court.
6. Mr. Mihir Joshi, learned Senior Advocate appearing for the appellant, with Mr. R.R. Shah, learned Advocate, submitted that the registered user plaintiff can institute the suit for infringement of trademark as well as copyright and if injunction is not granted, then, the appellant, original plaintiff, will be put to irreparable loss.
6.1 Learned counsel for the appellant submitted that the fact that the application for registration is pending as on the date does not detract from the right of the plaintiff to take action for infringement because (i) the parties having complied with the obligations under law and having done all they were required to do, could not be defeated on account of mere inaction of the authorities; (ii) under the scheme of the new Trade Marks Act, registration is not discretionary upon the subjective satisfaction of the Central Government under the old Act, but the Registrar is obliged to register the proposed registered user upon satisfaction only of compliance of the formalities and that the hearing thereof is contemplated only if the application is not to be accepted and no such notice has been issued even after all these years; (iii) that the defendant being one of the partners of M/s Babul Products and having executed the registered user agreement is estopped from questioning the validity thereof; even if the application is pending, a suit is maintainable to avoid advantage being taken by unscrupulous persons since the registration would relate back to the date of the application; and the plaintiff is entitled under the registered user agreement vide Clause 10 thereof to initiate action for infringement and has also obtained specific consent of the film to do so vide letter dated 7.2.2005 and, therefor, the suit is maintainable.
6.2 To support his contentions, Mr. Joshi has relied upon Section 59(2) of the Trade Marks Act, 1999 read with Rules 82 and 83 of the Trade Marks Rules, 2002, Section 47 of the Indian Partnership Act, 1932 and relied upon the decision in the case of Modi Threads Limited v. Som Soot Gola Factory and Anr., and in the case of Mumtaz Ahmad v. Pakeeza Chemicals, .
6.3 Learned counsel for the appellant has submitted that the defendant himself is neither the registered proprietor of the trademarks or a person using by way of permitted use and such use of the trademarks in relation to his goods amounts to infringement as contemplated under Section 29 of the Trade Marks Act, 1999. According to him, the defendant is only a joint proprietor of the trademarks along with other partners of M/s Babul Products which has been purportedly dissolved by him and is therefore entitled only to use the trademarks on behalf of all of them and the Act treats the rights to use the trademarks as having been vested in a single person. He further submitted that dissolution of the firm M/s Babul Products does not vest any rights in the partners of the dissolved firm beyond what is contemplated under the Trade Marks Act since a partnership is not a distinct legal entity apart from the partners constituting it and in law the firm as such has no separate rights of its own and all partners have a joint or common interest in the assets of the firm. In this context he has relied upon a decision of the Supreme Court in the case of Malabar Fisheries Co. v. The Commissioner of Income Tax, Kerala, . Relying upon the said decision he submitted that if a joint proprietor could not use the trademarks on his own behalf, the position could be no different after dissolution of the firm. He has also relied upon a decision in the case of Power Control Appliances and Ors. v. Sumeet Machines Pvt. Ltd., .
6.4 Mr. Joshi contended that upon dissolution of the partnership firm M/s Babul Products, the share of each partners is his proportion of the partnership assets after they have been all realised and converted into money and all the partnership debts and liabilities have been paid and discharged. According to him, whether before dissolution or thereafter no partner can deal with any portion of the partnership property as his own, nor can he assign his interest in a specific item of the partnership property to anyone. During the subsistence of the partnership, he is entitled to a share of profits falling to his share from time to time and upon dissolution of the firm, to a share in the assets of the firm. In short, a partner in a firm has no exclusive rights on any property of the firm. He further submitted that a partner in a dissolved firm cannot use the property of the firm and upon dissolution, is entitled only to sale of property and apportionment of his share therein and not to a share in specie in respect of the property. Mr. Joshi has relied upon a decision in the case of Narayanappa v. Bhaskara Krishnappa, , in the case of Rajendra Kumar Sharma v. Brijendra Kumar Sharma, , and in the case of Jagatram Ahuja v. Commissioner of Gift Tax, Hyderabad, .
6.5 Mr. Joshi has submitted that the plaintiff is entitled to maintain an action for passing off on its own behalf since it has been extensively manufacturing the products and marketing them under the trademark/label Babul since 1990 as sole license and from February 2000 the only other manufacturer viz., M/s Babul Products stopped all manufacturing and marketing activities and since then the plaintiff has been exclusively undertaking manufacturing and marketing of the products. He submitted that the products are therefore, exclusively associated as coming from the plaintiff and the goodwill thereof is that of the plaintiff. According to the learned counsel, the plaintiff is entitled under the agreement dated 19.3.1999 to initiate action for passing off on behalf of the registered proprietor and has also obtained specific consent in this behalf and the suit is therefore maintainable even on behalf of the proprietor under the contract. He further submitted that the plaintiff also has the word "Babul" as its trading name and style and is entitled to protection of its goodwill therein.
6.6 Mr. Joshi submitted that from the facts of the case the plaintiff has an oral licence to use the copyrights in question. According to him, the plaintiff is entitled under the registered users agreement and specific consent of the owner of the copyright to initiate action for infringement.
6.7 Mr. Joshi submitted that in case of infringement as well as passing off injunction must follow; that the marks/labels have been associated with the plaintiff since 1990 and since February 2000 the same marks/labels identify the products as being connected exclusively with the plaintiff; that the defendant has very recently entered the market and purports to have started manufacturing only on and from 13.2.2005 and the present suit has been filed on 1.3.2005; and that by permitting the defendant to continue using the subject marks/labels, their connection with the plaintiff would be irretrievably lost and the plaintiff would suffer irretrievable damage to its goodwill. In support of these contentions he has relied upon a decision of the Supreme Court in the case of Midas Hygiene Industries (P) Ltd. and Anr. v. Sudhir Bhatia and Ors., , in the case of Power Control Appliances and Ors. v. Sumeet Machines Pvt. Ltd, .
7. Mr. Joshi submitted that after closure of the business of the partnership firm on 18th March, 1999 whereby all partners had agreed to close the business and shift the business to the present plaintiff. It will not be appropriate on behalf of the defendant-respondent to use the licence trademark, which has been in favour of the present plaintiff by the original plaintiff. In his submission, Mr. Joshi relied upon the following decisions:
7.1 In the case of Powell v. Head, 1879 (12) Chancery Division 686, it is held that the part owner of a dramatic entertainment cannot grant a license for its representation without the consent of all the other owners and that having regard to that Act and the Act 4 & 6 Vict. c. 45, the license was illegally granted, and that the Defendant was liable to pay to the Plantiffs one half of the penalty of 40s for each representation.
7.2 In the case of British Actors Film Company Limited and Ors. v. Glover, 1917(1) King's Bench Division 299, it has been held that there had been a partial assignment of the copyright to the defendant, and that he had become the owner of the particular right mentioned in his agreement and was entitled to take steps to prevent any infringement of that right by the plaintiffs in performing the music of the work.
7.3 In the case of Kshetrapal Sharma v. Pancham Singh Varma, AIR 1915 Allahabad 262, it has been held that the cause of action for infringement of trade-mark arises partly where the advertisement is published and distributed.
7.4 In the case of Ramalinga Reddy v. Ramalingam Setty, AIR 1938 Madras 929, it has been held that it is recognized in Section 53 of the Partnership Act that even after dissolution, any partner may restrain any other partner from using any of the property of the firm for his own benefit until the affairs of the firm have been completely wound up.
7.5 In the case of Morny Ld.'s Trade Marks, 1951 (LXVIII) RPC 55, M. Ld. owned two registered trade marks, one comprising the word "Morny" in special lettering and with conventional embellishments, and the other consisting of the same word in block capitals. In the course of proceedings for rectification of the Register, it was alleged that neither mark had been used by M. Ld. The word "Morny" had been used by M.Ld., but only in special lettering of various sorts, and when the lettering of the first mark was used the embellishments were omitted or varied. On the facts of the case the Court held that both marks had been used and that there was no sufficient evidence that "Morny" was the name of a company.
7.6 In the case of Gulabchand Makanji v. Motapondha Vibhag Tenans' Cooperative Agricultural Society Ltd., , this Court held as under:
"...When a cause of action is triable wholly by a revenue Court that should not be included in a suit filed in a Civil Court. This is clear from Sections 9, 15, 25 and 33 and Order 2 of the Civil Procedure Code. The procedure of returning the plaint to be presented in another Court is applicable only when the whole suit is triable by another Court. In a case where only part of the plaint is triable by a Civil Court, if the plaintiff does not file two separate plaints but files only one plaint, he is himself responsible for the consequences of his action. In such a case, the plaintiff should be asked to amend the plaint so as to make it wholly triable by the Civil Court by deleting the portion of the plaint which is triable by another Court. If such an amendment is made, the plaint would be triable by the Civil Court.
7.7 In the case of Sohanlal and Ors. v. Amin Chand & Sons and Ors. in para 8 the Supreme Court held that where A, one of the three partners, gave notice for the dissolution of the firm, the other partners B and C are not entitled to the exclusive use of the trade mark which formed part of the assets of the partnership. A (and his legal representatives after his death) would also be entitled to a share of the assets of that partnership. The Court is, therefore, not justified in granting an injunction restraining A's legal representative from using the trade mark.
7.8 In the case of Bai Virkor C/o Mulsing Ramsing v. Prajapati Damodar Boghabhai, this Court held that the Court has inherent jurisdiction in suitable cases to set its foot down on smart practices which may be followed by any party before it and in such cases such parties do not deserve any relief from the Court and the Court is entitled to strike off the proceedings of such parties and treat the proceedings at the instance of such parties to be not maintainable as amounting to clear abuse of the process of the Court.
7.9 In the case of Malabar Fisheries Co. v. The Commissioner of Income Tax, Kerala, the Supreme Court held as under:
"18. Having regard to the above discussion, it seems to us clear that a partnership firm under the Indian Partnership Act, 1932 is not a distinct legal entity apart from the partners constituting it and equally in law the firm as such has no separate rights of its own in the partnership assets and when one talks of the firm's property or firm's assets all that is meant is property or assets in which all partners have a joint or common interest. If that be the position, it is difficult to accept the contention that upon dissolution the firm's rights in the partnership assets are extinguished. The firm as such has no separate rights of its own in the partnership assets but it is the partners who own jointly in common the assets of the partnership and, therefore, the consequence of the distribution, division or allotment of assets to the partners which flows upon dissolution after discharge of liabilities is nothing but a mutual adjustment of rights between the partners and there is no question of extinguishment of the firm's rights in the partnership assets amounting to a transfer of assets within the meaning of Section 2(47) of the Act. In our view, therefore, there is no transfer of assets involved even in the sense of any extinguishment of the firm's rights in the partnership assets when distribution takes place upon dissolution."
7.10 In the case of Smt. Kusuma Gupta and Ors. v. Smt. Sarla Devi and Ors., , the Court held that while granting temporary injunction, balance of convenience has to be seen and where damages can furnish adequate remedy, injunction should be refused.
7.11 In the case of Patel Roadways Limited v. Prasad Trading Company, , after considering the facts of the case the Supreme Court in this case held that the suit has to be filed only in the Court within whose jurisdiction the company/corporation has its subordinate office and not in Court within whose jurisdiction it has its principal office; a clause to the contrary in the agreement would not be operative and where the defendant company/corporation has only a principal office, then suit can be filed in Court within whose jurisdiction the principal office is located even if cause of action arises elsewhere.
7.12 In the case of Modi Threads Limited v. Som Soot Gola Factory and Anr., , the Court held as under:
6. It is true that the plaintiff's application for getting transferred the registered trade mark in its name in the office of the Registrar is still pending but that does not debar the plaintiff to protect the violation of the aforesaid trade mark at the hands of unscrupulous persons by filing an action in Court of law for injunction. It is, prima facie clear to me that during the interregnum period when the application of the plaintiff is kept pending for consideration by the Registrar of Trade Marks the dishonest persons cannot be allowed to make use of the said trade mark in order to get themselves illegally enriched earing upon the reputation built up qua that trade mark by the predecessor-in-interest of the plaintiff. Fortunately there are two judgments of two High Courts supporting this view. In T.I. Mahommed Zamoon Sahib v. Fathimunnisa @ Bibijan, , a Division Bench of the said High Court laid down that there is nothing in Section 21 or Section 35 which would support the argument that it is only the order of the Registrar under Section 35 which confers a right on the heirs of the original registered proprietor to bring an action for infringement of the trademark. Such an action is, therefore, maintainable even before an order was passed under Section 35. So, the title to the plaintiff accrues, prima facie, on the execution of the assignment deed and all other follow up actions which are required to be taken under the Trade Marks Act do not change the title already acquired in this respect. Hence, it cannot be said that till the plaintiff is able to get the registration of the trade mark transferred in its name the plaintiff cannot bring the suit for injunction restraining the breach of the trade mark by any other unscrupulous person. I entirely agree with the law laid down in this judgment."
7.13 In the case of Seemax Construction (P) Ltd. v. State Bank of India and Anr, AIR 1992 Delhi 197, in para 10 it is observed as under:
"10. The suppression of material fact by itself is a sufficient ground to decline the discretionary relief of injunction. A party seeking discretionary relief has to approach the Court with clean hands and is required to disclose all material facts which may, one way or the other, affect the decision. A person deliberately concealing material facts from Court is not entitled to any discretionary relief. The Court can refuse to hear such person on merits. A person seeking relief of injunction is required to make honest disclosure of all relevant statements of facts otherwise it would amount to an abuse of the process of the Court. Reference may be made to decision in The King v. The General Commissioners for the purpose of the Income-tax Acts for the District of Kensington, 1917(1) King's Bench Division 486 where the Court refused a writ of prohibition without going into the merits because of suppression of material facts by the applicant. The legal position in our country is also no different (See: Charanji Lal v. Financial Commissioner, Haryana, Chandigarh, AIR 1978 Punjab and Haryana 326 (FB). Reference may also be made to a decision of the Supreme Court in Udai Chand v. Shankar Lal, . In the said decision the Supreme Court revoked the order granting special leave and held that there was a mis-statement of material fact and that amounted to serious mis-representation. The principles applicable are same whether it is a case of mis-statement of a material fact or suppression of material fact".
7.14 In the case of Rajendra Kumar Sharma v. Brijendra Kumar Sharma and Anr, AIR 1994 Allahabad 62, the Court held that in absence of contract to the contrary between the partners subsequent to the dissolution of partnership firm but before the completion of winding up does not confer a right on the partners to use the property for his own benefit without the consent of the other partner.
7.15 In the case of Power Control Appliances and Ors. v. Sumeet Machines Pvt. Ltd., , the Court dealt with the use of trade mark. Paragraphs 41 and 42 of the said decision reads as under:
"41. It is a settled principle of law relating to trade mark that there can be only one mark, one source and one proprietor. It cannot have two origins. Where, therefore, the first defendant-respondent has proclaimed himself as a rival of the plaintiffs and as a joint-owner, it is impermissible in law. Even then, the joint proprietors must use the trade mark jointly for the benefit of all. It cannot be used in rivalry and in competition with each other.
42. The plea of quasi-partnership was never urged in the pleading. As regards copyright there is no plea of assignment. The High Court had failed to note the plea of honest and concurrent user as stated in Section 12(3) of 1958 Act for securing the concurrent registration is not a valid defence for the infringement of copyright. For all these reasons we are unable to support the judgments of the High Court under appeal. We reiterate that on the material on record as is available at present the denial of injunction, once the infringement of trade mark, copyright and design is established, cannot be supported. Pending suit, there will be an injunction in favour of the appellants (the plaintiffs). All the civil appeals will stand allowed. No cost."
7.16 In the case of Pupa & Co. Ltd. and Anr. v. Dawn Mills Co. Ltd. and Anr., it is held as under:
"71. From the above discussion, in the light of decided cases, it can be broadly stated that in an action for infringement of passing off, the crux of enquiry is whether mark used by defendant on comparison is deceptively similar to that of plaintiff which is likely to deceive or cause confusion amongst its buyers. The similarity which can cause infringement may be ocular as well as phonetic similarity on comparison of two marks, depending upon the essential feature of the marks in question. Comparison has to be concerning essential feature of the marks and not with each and every detail of each mark to find exact or near exact reproduction. The essential feature of a mark is one by which an average person with imperfect recorrection remembers it rather by general impression or by some significant detail than by any photogenic recollection of the while in visual detail. Test of such enquiry being in the state of mind of an average buyer of the goods, it is equally important to consider the class of persons who are likely to buy the goods bearing the mark, back ground from which they come, level of their education and degree of care they are likely to exercise in purchasing goods. What degree of resemblance is necessary and in which filed, visual or sound, is from the very nature of things a matter incapable of a definition a priori. Each case must depend on its own facts and on the satisfaction of Court on totality of evidence where words or group of words are considered essential feature of the mark, than instead of its visual detail, resemblance in sound or phonetic similarity will be of prime relevance."
7.17 In the case of Scandecor Development AB v. Scandecor Marketing AB and Ors., 1998 Fleet Sleet Reports (FLR) 500, the Court after a detailed discussion held that there was no general principle that all goodwill generated by use of a mark under licence should accrue to the licensor on termination of the licence. It was a question of fact as to whether the name was distinctive of a particular party's goods, not of fiction or equitable doctrine.
7.18 In the case of Jagatram Ahuja v. Commissioner of Gift-tax, Hyderabad, it is held that words and expressions defined in one statute as judicially interpreted do not afford a guide to construction of the same words or expressions in another statute unless both the statutes are pan materia legislations or it is specifically so provided in one statute to give the same meaning to the words as defined in other statute. The aim and object of the two legislations, namely, the Gift-tax Act and the Estate Duty Act are not similar.
7.19 In the case of Casio India Co. Ltd. v. Ashita Tele Systems Pvt. Ltd., 2003 (27) PTC 265 (Del), in para 6(a) it is held as under:
6. (a) Locus to institute suit and claim injunction.
(i) The defendant questions locus standi of plaintiff to institute the suit. It is submitted that there is nothing on record to show that either the plaintiff is proprietor of the trade mark "CASIO" or is the registered user thereof, authorised to use it as a trade mark or domain name. Assuming but not admitting, plaintiff to be the 97% or 100% subsidiary of Casio Computer Company Ltd., Japan, it does not follow that the said trade mark is assigned to it or it is authorised to use the same. The mere appointment as the marketing and selling agent of Casio Japan would not ipso facto entitle it to use the trade mark or domain name.
(ii) The objection of defendant raised as to locus standi and authority of the plaintiff to institute the suit is without merit. The Agreement dated 7.11.2000 between Casio Japan and plaintiff records the user of the branch name by the plaintiff since 1996. The agreement specifically records that the plaintiff is and had been authorised to use the brand name "CASIO" in India since its incorporation. The plaintiff was incorporated in 1996. The agreement further authorised the plaintiff to appoint stockists, distributors, C&F Agents for sales and marketing of "Casio" brand product. The agreement term was for a period of two years and it was in force at the time of institution of the suit. As per the affidavit dated 20th March 2003, filed by the plaintiff, the agreement has since been extended. There is no specific assignment or authority required empowering the plaintiff to sue because the said right is a natural consequences to the existence of the plaintiff as a juristic person under the Companies Act. The impugned domain name on the defendant's website uses the name identical to the corporate name of the plaintiff. Therefore, irrespective of any trade mark right, it has an inherent right under common law to seek a restraint on any other business entity from using its corporate name to do business and that too in the same class of products. The present suit in substance is one of seeking a restraint on passing off a portal/website as that of the plaintiff and its principal. Accordingly, no specific assignment of trade mark or authority is required for instituting the suit. I, therefore, hold that the plaintiff has locus to institute the suit and the objection of the defendant is without merit.
7.20 Learned counsel relied upon a decision in the case of Mumtaz Ahmad & Etc. v. Pakeeza Chemicals and Ors., . Para 15 of the said decision reads as under:
"15. Interpreting Sections 23, 27 and 29 of the Trade and Merchandise Marks Act, 1958, the Madras High Court held in the case of PL Anwar Basha (supra) that it is contended by the counsel for the respondent that the suit by the plaintiff at the time of institution is not competent and he could not institute any proceeding for the infringement of a trade mark which was not registered on the date of plaint. But it must be pointed out that under Section 23, the trade mark when registered shall be registered as on the date of filing of the application for registration of a trade mark in Part A or Part B of the register and that date shall, subject to the provisions of Section 131 of Trade and Merchandise Marks Act, be deemed to be the date of registration. In the said case it was seen that the date of registration was 18th September 1969, obviously referring to the date of application, though the certificate was dated 30th November 1974. The contention of the respondent, therefore, that the Court has no jurisdiction to entertain the suit is not correct. Kerly in his book "Law of Trade Marks and Trade Names", 10th Edition Ch.15, paragraph 15 at page 309 says:-
"The writ for infringement may be issued before registration of the mark, provided that registration has been applied for, since the registration is dated back to the application."
7.21 Learned counsel has relied upon a decision in the case of Exphar SA and Anr. v. Eupharma Laboratories Ltd. and Anr., . On the facts of the said case and on the question of jurisdiction of the Court, the Supreme Court held that the High Court held to have jurisdiction to entertain the suit.
7.22 Learned counsel has also relied upon a decision in the case of Midas Hygiene Industries (P) Ltd. and Anr. v. Sudhir Bhatia and Ors. Para 5 of the said decision reads as under:
"5. The law on the subject is well settled. In cases of infringement either of trade mark or of copyright, normally an injunction must follow. Mere delay in bringing action is not sufficient to defeat grant of injunction in such cases. The grant of injunction also becomes necessary if it prima facie appears that the adoption of the mark was itself dishonest."
7.23 Learned counsel has relied upon a decision in the case of Singer India Ltd. v. Chander Mohan Chadha and Ors. Para 16 of the said decision reads as under:
"16. However, it has nowhere been held that such a course of action is open to the company itself. It is not open to the company to ask for unveiling its own cloak and examine as to who are the Directors and shareholders and who are in reality controlling the affairs of the company. This is not the case of the appellant nor could it possibly be that the corporate character is employed for the purpose of committing illegality or defrauding others. It is not open to the appellant to contend that for the purpose of FERA, the American Company has effaced itself and has ceased to exist but for the purpose of the Delhi Rent Control Act, it is still in existence. Therefore, it is not possible to hold that it is the American Company which is still in existence and is in possession of the premises in question. On the contrary, the inescapable conclusion is that it is the Indian Company which is in occupation and is carrying on business in the premises in question rendering the appellant liable for eviction."
7.24 Learned counsel for the petitioner has relied upon a decision in the case of S.J.S. Business Enterprises (P) Ltd. v. State of Bihar and Ors. In this decision it is held that as a general rule, suppression of a material fact by a litigant disqualifies such litigant from obtaining any relief. This rule has been evolved out of the need of the Courts to deter a litigant from abusing the process of Court by deceiving it. But the suppressed fact must be a material one in the sense that had it not been suppressed it would have had an effect on the merits of the case. It must be a matter which was material for the consideration of the Court, whatever view the Court may have taken.
7.25 Mr. Joshi has relied upon a decision of Delhi High Court in the case of Rajmoti Industries v. Rajmoti Oil Mill Pvt. Ltd. and Anr., 2005(3) PTC 38 (Del) wherein it is held that the plea as to territorial jurisdiction is unsustainable and application for rejection of plaint was dismissed.
8. Mr. Mihir Thakore learned Senior Counsel for the respondent-defendant has submitted that no injunction may be granted by this Court in view of the fact that the appellant has suppressed material fact, i.e. of the filing of the earlier proceedings being Civil Misc. Appeal No. 60 of 2003, wherein the City Civil Court, Ahmedabad had not granted injunction in favour of the appellant. Learned counsel has submitted that since the Partnership Firm is already dissolved and Notice for cancellation of the license of registered users has been issued, suit on behalf of the Company, i.e. Registered users against co-owners, is not maintainable.
8.1 Mr. Thakore has submitted that if injunction is granted by this Court the value of the product will be diminished in the market, which cannot be compensated in terms of money. He has submitted that the trial Court has rightly imposed the condition of submission of accounts, so that in case of dissolution of the Partnership Firm, the claim of majority of the partners can be decided by the competent Court.
8.2 Mr. Thakore has submitted that the appellant cannot invoke the provisions of Partnership Firm inasmuch as the Managing Directors of majority shareholders were holding major shares in their individual capacity and the same prayer has already been claimed in Civil Misc. Appeal No. 63 of 2005.
8.3 Mr. Thakore has further submitted that the Court should not allow Forum shopping inasmuch as they have not filed a suit that where the cause of action has arisen namely, either at the registered office of the defendants or the plaintiff is situated. However, they have chosen the Baroda District Court where the respondent has not traded. It is also contended that the City Civil Court has already ceased with the matter and, therefore, the Court should not allow them to take advantage of the filing another suit and secure injunction from the Court where no cause of action has arisen.
8.4 Mr. Thakore has contended that this proceeding is nothing but abuse of process of law and the conduct of the appellant itself has created a situation where lifting of veil is required to be done. Mr. Thakore has further contended that this being common law of right, it cannot be decided in absence of the original owner and since the license is cancelled, the appellant cannot initiate the proceedings and the action of passing of infringement of the trade mark cannot be allowed to be agitated by registered users inasmuch as under the Trade Marks Act, 1999, a registered user as defined under the Act and their license has been cancelled after the dissolution of the firm. In that view of the matter, since the license itself is a matter of doubt, this Court cannot injunct the respondent who is the original partner of the partnership firm and who is the co-owner of the trade mark.
8.5 Mr. Thakore has further contended that if the injunction is granted, the plaintiff will take advantage of their wrong and will sponsor their product in the name of "Bhagban" and will diminish the trade mark "Babul".
8.6 Mr. Thakore submitted that merely by submitting an agreement for registration, whether complying with the requirements of law or otherwise cannot make the plaintiff a registered user. Registered user means a person who is for the time being registered as such under Section 49 of the Act. Section 49 provides the procedure for registering as a registered user of a trade mark. Section 49(2) clearly provides that the Registrar shall register the proposed registered user in respect of the goods as to which he is so satisfied. The Registrar, therefore, has to be satisfied before putting the name of any person as registered user in the register. Register is defined in Section 2(t) as the Register of Trade Marks referred to in Sub-section (1) of Section 6. Section 6(1) reads as under:
"6(1) For the purposes of this Act, a record called the Register of Trade Marks shall be kept at the head office of the Trade Marks Registry, wherein shall be entered all registered trade marks with the names, addresses and description of the proprietors, notifications of assignment and transmissions, the names, addresses and description of registered users, conditions, limitations and such other matter relating to registered trade marks as may be prescribed."
8.7 Mr. Thakore submitted that a permitted user is entitled to take proceedings under Section 52 if and only if his name, address and description appears on the register maintained under Section 6(1) of the Act and for that the Registrar, after following the procedure laid down in Rules 80 to 83 has to accept the application on being satisfied that all the requirements are complied and register the proposed registered user as a registered user under Rule 84. Any other interpretation would make Section 53 otiose, as Section 53 categorically provides that a person, who is not a registered user but merely permitted to use pursuant to a written agreement, is not entitled to file the suit. Only a person referred to in Section 2(r)(i) is entitled to file suit under Section 52 and such person has to be registered as a registered user i.e. his name must be on the register under Section 6(1).
8.8 According to him, there is no dispute which has been deliberately raised by the defendant. A partner under Section 43 is entitled to dissolve the firm, if it is a partnership at will and the defendant has acted accordingly more particularly in view of the actions of the majority partners. There is no legal tangle disentitling the partners from taking appropriate action according to law under the Indian Partnership Act against a partner even in respect of trade marks since each partner is a co-owner thereof. Such action has been initiated by filing CMA No. 63 of 2005. There is no question of partners taking infringement action against co-partners under the Trade Marks Act. If a registered proprietor itself is not entitled to take action, certainly a licensee (much less a licensee whose licence is terminated) is not entitled to take action, for such action is always on behalf of and for the proprietor and the right to such action emanates from the proprietor. If plaintiff is not entitled in law to take action, equity cannot be invoked to claim locus. In any event there is no equity in licensee taking action against the co-proprietor, when the other co-proprietors have already initiated appropriate proceedings.
8.9 Mr. Thakore submitted that Sections 52 and 53 make a clear distinction between who is entitled to and who is not entitled to take action for infringement. When such clear provisions are there, the plaintiff's name must be on register before it can take proceedings for infringement. The right to initiate an infringement action is a right conferred by the Statute and only a person who complies with the requirements of the statute would be entitled to take action. The pre-requisite for initiating infringement action is that (a) there should be a registered trade mark, and (b) the action should be initiated by the registered proprietor or the registered user. Unless both the conditions are strictly complied with there cannot lie any infringement action. There is no room for contending substantial compliance when the right to take action is available only to a registered user and not to a permitted user who is not registered. Assuming that there was inaction of authorities even that would not confer a right which is statutorily not available. According to him, in any event, plaintiff cannot attribute any inaction of the authorities for there is nothing to show that it had pursued the matter for getting registered as a registered user.
8.10 Mr. Thakore submitted that Rule 82 of the Trade Marks Rules, 2002 clearly provides that the Registrar has to be satisfied that the application and the accompanying documents comply with the relevant provisions of the Act and the Rules and the matter specified in Sub-clauses (i) to (iv) of Clause (b) of Sub-section (1) of Section 49 and only on being satisfied he will pass an entry in the register maintained under Section 6(1). Since satisfaction is a prerequisite for registration, there cannot be any deemed registration on application being filed. Moreover, the Trade Marks Rules, 2002 came into force only on 15th September, 2003. The application was therefore filed under the old Act and the Trade and Merchandise Marks Rules, 1959, which clearly provided for forwarding by the Registrar to the Central Government application for registration as a registered user, if the requirement of Rules 82 and 83 are complied with and was to be considered by the Central Government. Claim of inaction on the part of Registry, either under the previous Act or under the present Act, is completely unjustified.
8.11 Mr. Thakore submitted that doctrine of estoppal has no application to the facts of the case. The defendant is not questioning the validity of the document giving licence to the plaintiff. Its contention is only limited to the factual position that the plaintiff is not registered as a registered user and consequently is not entitled to file the suit in view of Section 53. Such contention based on a statutory prohibition is always available to every defendant as there is no estoppal against law. Moreover, even a registered user does not have an absolute right to take action under Section 52. It is circumscribed by two conditions; (i) subject to an agreement subsisting between the parties, and (ii) making the registered proprietor a defendant.
8.12 He pointed out that Clause 10.2 of the registered users' agreement clearly provides "...shall forthwith give written notice of the same to the proprietor and the licensee shall take immediate action against the infringer after obtaining consent for instituting such action...". On the date of filing of the suit the firm was dissolved and the consent before filing the suit was required to be obtained of all the partners. The so-called consent dated 7th February, 2005 of the Nanubhai family pre-dissolution would be of no relevance. No such consent having been obtained even under Section 52, plaintiff is not entitled to file the present suit. The defendant whose consent is not obtained is not estopped from raising such plea.
8.13 Mr. Thakore has contended that the allegation regarding stoppage of work is baseless in view of subsequent order passed by the City Civil Court. He further contended that the plaintiff has started "Bagban" with the same symbol and looking to the new form and colour it indicates that they are also using the trade mark in a different form. He, therefore, submitted that no injunction may be granted against the present respondent.
9. In support of his submissions, he has strenuously relied upon various decisions of the Supreme Court as well of different High Courts.
9.1 Mr. Thakore has with regard to his contention of suppression of material fact and cause of action, firstly relied upon the decision of the Apex Court in the case of Seemax Construction (P) Ltd. v. State Bank of India, A.I.R. 1992 Delhi 197, and more particularly on para 10 & 11, which reads as under:-
"10. The suppression of material fact by itself is a sufficient ground to decline the discretionary relief of injunction. A party seeking discretionary relief has to approach the Court with clean hands and is required to disclose all material facts which may, one way or the other, affect the decision. A person deliberately concealing material facts from Court is not entitled to any discretionary relief. The Court can refuse to hear such person on merits. A person seeking relief of injunction is required to make honest disclosure of all relevant statements of facts otherwise it would amount to an abuse of the process of the Court. Reference may be made to decision in The King v. The General Commissioner for the purposes of the Income Tax Acts for the District of Kensington, 1917 (1) King's Bench Division 486 where the Court refused a writ of prohibition without going into the merits because of suppression of material facts by the applicant. The legal position in our country is also no different. (See Charnaji Lal v. Financial Commissioner, Haryana, Chandigarh, AIR 1978 Punjab & Haryana 326 (FB). Reference may also be made to a decision of the Supreme Court in Udai Chand v. Shankar Lal, . In the said decision, the Supreme Court revoked the order granting special leave and held that there was a mis-statement of material fact and that amounted to serious misrepresentation. The principles applicable are same whether it is a case of mis-statement of a material fact or suppression of material fact.
11. I have already stated hereinbefore the prayers made in the two earlier suits filed by the plaintiff as also the pleas taken in the plaint filed in Court at Bikaner and the pleas taken in the present suit. Mr. Bhasin learned counsel for plaintiff, submits that the suits filed earlier were based on different cause of action and as such the filing of the said suits was not a material fact requiring disclosure and that being so there is no suppression of material fact from this Hon'ble Court. Learned Counsel contends that it is one thing to say that it would have been desirable to disclose the filing of the said suits. Insofar as the present suit is concerned, Mr. Bhasin contends that, if at all, the present case falls in the former category, I do not agree. The contention that the filing of the said two earlier suits was not a material fact is misconceived. Briefly, the case set up in the plaint of the present suit as also in the plain filed in Bikaner Court is same, namely, defendant No. 2 was pressurising the plaintiff to sign the altered agreement and was taking advantage of the fact that plaintiff had handed over the bank guarantee of Rs. 5 lakhs to defendant No. 2 before signing of agreement by defendant No. 2. The other point of distinction pointed out by learned counsel for the plaintiff that the earlier suit was based on threat of invocation of the bank guarantee whereas the present suit was based on the issue of letter of invocation is not material when the plea in both the suits is almost similar and relief claimed is same. The plaintiff has not made full, complete and honest disclosure of the material facts. Further point of distinction that in the earlier suit bank was not a party whereas in the present suit the bank is a party is also of no consequence."
9.2 He has next relied upon the decision of the Calcutta High Court in the case of Barbara Taylor Bradford v. Sahara Media Entertainment Ltd., 2004 (28) PTC (Cal) 474, more particularly para 216.3, which reads as under:-
"216.3. Prima facie case : Respondent No. 2. who granted to hi woman friend journalist the interview, admitted to borrowing only the plot and some characters. Copyright infringement cannot be established on this alone. There is no prima facie case at all yet. Infringement can be established only by comparing and showing similarity of details, events, situations, expressions of language and imagination. Learned leading counsel of both sides had not even read the book. How can infringement be established when even the book had not been read?
9.3 Next decision which has been relied upon is rendered in the case of Bloom Dekor Ltd. etc. etc. v. Subhash Himatlal Desai and Ors., 1995 (2) G.C.D. 65 (SC), and more particularly para 21 and 28, which reads as under:-
"21. The main grievance of the respondent was that the requisite permission to deal in debentures and shares had not been obtained from Ahmedabad & Bombay Stock Exchanges. Firstly, the statements of the respondent are clearly false in Civil Suit No. 683 of 1993. The Ahmedabad Stock Exchanges filed a statement that it had approved the list of this appellant for dealing in the exchange on 22.11.93. The Company Secretary of Ahmedabad Stock Exchange by his letter dated 24.11.93 informed the Company that basis of allotment of the public issue of equity shares of the company was approved by the Ahmedabad Stock Exchange. It also conveyed to the appellant that its no objection of the Stock Exchange for utilisation of the issue funds. Again, on 7.1.94, the Ahmedabad Stock Exchange approved the appellant's application seeking permission for the listing of the equity shares and to deal in the exchange and granted the necessary permission under Section 73 of the Act with effect from 24.11.93. The Ahmedabad Exchange by its circular dated 7.1.94 notified the new enlistment for information of the members of the Stock Exchange.
28. If the matter is viewed as a contract no part of cause of action has arisen within the jurisdiction of Morvi Court. The same principle will be applicable to the suit before the Civil Court (S.D.), Baroda more so, in the light of Explanation to Section 20 the appellant Company having its registered office in Ahmedabad. Therefore, we would expect the Court to examine these aspects before granting an interim order. So much for cause of action."
9.4 Mr. Thakore has next relied upon the decision of the Apex Court in the case of Lalit Kumar Jain and Anr. v. Jaipur Traders Corporation Pvt. Ltd., , wherein the Court has held as under:-
"14. If the above facts and circumstances are cumulatively considered, the plaintiff has no legitimate ground to seek the equitable remedy. While these are the factors that can be put against the plaintiff, the defendants-appellants are not free from blame. We cannot lose sight of the fact that their conduct is also open to question. The defendants, in the initial stages, insisted on income tax clearance certificate. When the defendants were informed of the readiness of the plaintiff to hand over the ITC subject to payment of balance money within 15 days, the defendants then raised the plea of pendency of the suit of Seth Shanti Lal which was by then dismissed for default. The factum of dismissal of suit was intimated to the defendants through the notice dated 3.7.1973, though the suit was subsequently restored and was finally dismissed in the year 1978. The fact remains that the defendants, who in the initial stages, were prepared to pay the balance sale price on receipt of ITC for reasons best known to them, dodged to make the payment on the ground of pendency of suit. Though this conduct on the part of the defendants is not above board, the conduct of the plaintiff, who has sought equitable remedy should be kept uppermost in the mind of the Court. The plaintiff seeking equitable remedy cannot approach the Court with unclean hands or be guilty of laches. Irrespective of the conduct of the defendants we must hold that he plaintiff has for various reasons discussed above disentitled himself to the relief of cancellation of instrument and for recovery of possession from the defendants that too after the property was substantially developed."
9.5 He has next, relied upon the decision rendered in the case of Cotton Corporation of India Ltd. v. United Industrial Bank Ltd. and Ors., , more particularly para 8 & 9, which reads as under:-
"8. It is, therefore, necessary to unravel the underlying intendment of the provision contained in Section 41(b). it must at once be conceded that Section 41 deals with perpetual injunction and it may as well as be conceded that it has nothing to do with interim or temporary injunction which as provided by Section 37 are dealt with by the Code of Civil Procedure. To being with, it can be said without fear of contradiction that anyone having a right that is a legally protected interest complains of its infringement and seeks relief through the Court must have an unhindered, uninterrupted access to law Courts. The expression "Court" here is used in its widest amplitude comprehending every Forum where relief can be obtained in accordance with law. Access to justice must not be hampered even at the hands of judiciary. Power to grant injunction vests in the Court unless the Legislature confers specifically such power on some other Forum. Now access to Court in search of justice according to law is the right of a person who complains of infringement of his legally protected interest and a fortiori therefore, no other Court can by its action impede access to justice. This principle is deducible from the Constitution which seeks to set up a society governed by rule of law. As a corollary, it must yield to another principle that the superior Court can injunct a person by restraining him from instituting or prosecuting a proceeding before a subordinate Court. Save this specific carving out of the area where access to justice may be impeded by an injunction the Court, the Legislature desired that he Courts ordinarily should not impede access to justice through Court. This appears to us to be the equitable principle underlying Section 41(b). Accordingly, it must receive such interpretation as would advance the intendment, and thwart the mischief it was enacted to suppress, and to keep the path of access to justice through Court unobstructed.
9. Viewed from a slightly different angle, it would appear that the legal system in our country envisages obtaining of redressal of wrong or relief against unjust denial thereof by approaching the Court set up for the purpose and invested with power both substantive and procedural to do justice that is to grant relief against invasion or violation of legally protected interest which are jurisprudentially called rights. If a person complaining of invasion or violation of his rights is injuncted from approaching the Court set up to grant relief by an action brought by the opposite side against whom he has a claim and which he wanted to enforce through Court, he would have first to defend the action establishing that he has a just claim and he cannot be restrained from approaching the Court to obtain relief. A person having a legal right and complains of its violation or infringement, can approach the Court and seek relief. When such person is injuncted from approaching the Court, he has to approach the Court for relief. In other words, he would have to go through the person vindicates the claim and right to enforce the same. If successful he does not get relief but a door to Court which was bolted in his face is opened. Why should he be exposed to multiplicity of proceeding ? In order to avoid such a situation the Legislature enacted Section 41(b) and statutorily provided that an injunction cannot be granted to restrain any person from instituting or prosecuting any proceeding in a Court not subordinate to that from which the injunction is sought. Ordinarily a preventive relief by way of prohibitory injunction cannot be granted by a Court with a view to restraining any person from instituting or prosecuting any proceeding and this is subject to one exception enacted in larger public interest, namely, a superior Court can injunct a person from instituting or prosecuting an action in a subordinate Court with a view to regulating the proceeding before the subordinate Courts. At any rate the Court is precluded by a statutory provision from granting an injunction restraining a person from instituting or prosecuting a proceeding in a Court of coordinate jurisdiction or superior jurisdiction. There is an unresolved controversy whether a Court can grant an injunction against a person from instituting or prosecuting a proceeding before itself but that is not relevant in the present circumstances and we do not propose to enlarge the area of controversy."
9.6 Mr. Thakore has next relied upon the decision of the Madras High Court in the case of Fatima Tile Works v. Sudarsan Trading Co. Ltd., , wherein the Court has held that in case the Company retains its power of supervision and direct control etc. over "users", there can be no assignment in favour of "users."
9.7 Mr. Thakore has relied on Lindley & Banks on Partnership, Seventeenth Edition, more particularly, meaning of goodwill which reads as under:
(a) Meaning of goodwill -- Given its intangible nature, it is difficult to produce a precise definition of goodwill, as Lord Lindley explained:
However, it must at the same time be appreciated that Section 38 of the Partnership Act, 1890 contemplates that the members of a dissolved firm will complete any unfinished business, but not that they will take on any new work. Yet, it is self apparent that, if no new work can be taken on, the value of the firm's goodwill will be swiftly dissipated unless, exceptionally, a forced sale can be secured on or shortly following the dissolution dated. The tension between these two opposing principles is most apparent in the case of a professional practice, yet appears not to have received detailed attention from the Courts, which can, perhaps, be attributed to the infrequency with which judicial assistance in the winding up process is actually sought."
9.7 Mr. Thakore has also relied upon a decision of the Supreme Court in the case of New Horizons Limited and Anr. v. Union of India and Ors., wherein it is held that doctrine of lifting the veil, piercing the veil or peeping or seeing through the veil is invoked when the corporate personality is found to be opposed to justice, convenience or interest of revenue.
9.8 Mr. Thakore has also relied upon a decision of the Madras High Court in the case of P.L. Anwar Basha v. M. Natarajan, AIR 1980 Madras 56, wherein it is held that a suit for infringement of trade mark an application for registration is pending on the date of plaint is competent even if the trade mark is registered pending the suit because under Section 23 of the Act the date of registration should be taken to be the date of application which the certificate of registration has to bear.
10. I have heard the learned Counsel for the respective parties at length. It is required to be mentioned here that this Court has made efforts to see that the family dispute is resolved amicably. A suggestion was also put forward to resolve the dispute to the effect that an auction of trade mark may be conducted or they can conduct the business through the receiver or to get the dissolution of the firm and till then the partners may not trade or in the alternative the plaintiff may manufacture the products and let it market through the defendant. However, all such efforts did not yield any result.
11. It is required to be noted that at present this Court is required to decide whether the plaintiff has a prima facie case and the balance of convenience is in favour of the plaintiff and whether the plaintiff would suffer irreparable loss than the defendant if the interim injunction is refused. It is well settled law that this Court is not required to go into a detailed discussion as the suit and other proceedings are still pending and any observation made on merits would adversely affect the rights of either parties in the suit/suits. Therefore, it is made clear that the observations made in this judgment are prima facie and tentative in nature only with regard to the issues which are raised in the present proceedings.
12.1 have perused the relevant documents and the judgment of the trial Court. I have also heard the parties at length. It is required to be noted that the trial Court has in detail discussed the prima facie evidence and necessary case law on the subject.
13. It may be noted that from the facts of the case it appears that the parties have tried to club all the disputes which were raised in different proceedings in different capacities. But in the present proceedings this Court is required to consider only the present suit filed by the plaintiff Company. It may be that majority of the company might have other rights in the properties of the Partnership firm, but the same are required to be agitated before the competent Courts in different proceedings which are still pending.
13.1 It is also pertinent to note that the parties herein have tried to enlarge the score of appeal beyond the suit proceedings. However, in the interest of both the sides, I am considering the arguments within the ambit of the suit proceedings and this Court has not considered other contentions which are not covered in the present proceedings.
14. The contention raised by the plaintiff relying upon and , in short can be summarized that no partner has "in specie" right in the partnership assets and that all partners have a joint or common interest in the assets of the firm and each partner would have a share, after payment of debts, in the assets of the firm. There can be no dispute in respect of the general principle enunciated in the said Judgments. However, I am of the opinion that this issue cannot be agitated by a licensee of the partnership. It's an issue which purely pertains to the partners and can only be agitated in a proceeding between the partners. Section 53 of the Partnership Act does not in any manner entitle a person other than a partner to contend that a partner should not use the asset of the firm. Such plea is not available to the plaintiff company.
14.1 The other argument advanced by the defendant relying upon the observations in , Power Control Appliances and Ors. v. Sumeet Machines Pvt. Ltd, is that there can be only one mark, one source and one proprietor and it cannot have two origins is based on paragraph-41 which reads as under:
"41. It is a settled principle of law relating to trade mark that there can be only one mark, one source and one proprietor. It cannot have two origins. Where, therefore, the first defendant - respondent has proclaimed himself as ffs and as joint owner it is impermissible in law. Even then, the joint proprietor must use the trade marks jointly for the benefit of all. It cannot be used in rivalry and in competition with each other."
9.2 The above observations are in the context of the facts of the case where the proprietorship was originally of Mrs. Madhuri Mathur, sole proprietor of Power Control Appliance Company and others cannot claim proprietorship independent of her even if he happens to be her son. The facts of the present case are where joint proprietors namely partners are jointly using the trade mark till the firm is dissolved, therefore the source of the trade mark is one. What is to happen post dissolution of the firm is not considered in the said Judgment. In fact, the very next paragraph of the said Judgment starts with the following words: "the plea of quasi-partnership was never urged in the pleading."
In the instant case it is clear that there is a plea of actual partnership and not even a quasi-partnership. The partnership is the common source and the partners have used the mark for the benefit of all. The said firm is now dissolved and there is nothing in the trade mark law for the partners to now use the trade marks pursuant to the dissolution of the firm. In fact, Section 12 read with Section 24(1) read with Section 28(2) of the Trade Marks Act even permits registration of the same mark by more than one person. The contention based on the above judgment is therefore, devoid of substance since after death of a proprietor or dissolution of a firm, the ownership of trade mark will not be in one proprietor, but will be in number of proprietors. The Trade Marks Act therefore, contemplates the same mark being registered in the name of more than one proprietor, if the circumstances so require. It is an undisputed position of law that in the event the marks are distributed amongst the partners and not sold in the course of winding up, each of the partners would be entitled to use the mark independently.
14.2 The plaintiff has relied upon a decision in the case of Scandecor Development AB v. Scandecor Marketing AB and Ors., 1998 FSR 500 :-Scandecor Marketing was a distributor of Scandecor Development and the distributorship was terminated in 1994, and as a consequence, injunction was sought restraining Scandecor Marketing from using the trade mark. The defence raised by Scandecor Marketing that since it had independently developed the calendars and its own art, print and frames, any goodwill or reputation which was derived from the sale of these items belong to it and to Scandecor Development. The relevant facts which led to the conclusion that Scandecor Marketing had developed its own goodwill are found on in the following paragraphs:
"From about 1984 Scandecor Marketing began to develop calendars and its own art print and frames, and later for a while gift wrap, as well as taking over the range of cards from Scandecor International. It contends that these product anything to do with Scandecor International or Development, except of course historically for cards and say that some of them have been sold to the Scandecor International and Development group as customers. It therefore contend that any publisher's good will or reputation attached to them is that of Scandecor Marketing, not that of Scandecor International and Development, and if the trade mark is distinctive of Scandecor Development it is and has been deceptive for it to be applied to these products." [Page: 511] "In my judgment this was largely rationalization. I do not accept that there was any significant element of control by Scandecor International or Development as regards the product puts out by the Scandecor Marketing....It defendants' contention that the plaintiff did not exercise or have the right to exercise control over the defendants' own product in relation to which the defendant was entitled to use the trade mark, though I do accept that there was a continuing process of consultation and collaboration both ways about posters and calendars, and no doubt other products" [Page: 513-514] 9.4 The plaintiff has also relied upon a decision in the case of Scandecor Development AB v. Scandecor Marketing AB and Ors., 1999 FSR 26:- In this judgment the Appellate Court has observed as under:
"(6) In relation to the disputed goodwill, what matters is the identity of the person carrying on the trading activities in the local territory with the retailers: with whom do they associate the mark "Scandecor"? Mr. Wyand emphasise of the image of the unified worldwide group, in preference to publicising and high lighting the divisions occurring within it. He relied on the publicity to the outside world (the "one face to the world" policy) and the claims by S Ltd. to international connections. However, the commercial reality in the marketplace (and that is what really counts on this issue of entitlement to goodwill) is that SIAB neither had a business in the United Kingdom nor did it ever exercise control over any relevant business activities in the United Kingdom to which its goodwill could attach. The Judge referred (at paragraph 21) to the evidence of the retailers called by the defendants who all associated the name "Scandecor" with S Ltd., the company with which they dealt and with whose service they were satisfied. Although some knew that the products or some of them were made in Sweden, they were more interested in the quality, price and service offered by the supplier than in the original source or publisher of the product. He also referred in the same paragraph to the evidence given by one of the plaintiff's witnesses (Mr. Winship, an employee of S Ltd. 1975 -93) that the name and logo were used to distinguish products placed on the market by S Ltd. from other companies' products, whether posters or calendars."
14.3 In view of the fact narrated in the above paragraphs the Court concluded that the goodwill in the word Scandecor was only of the distributor. On the facts of the case I am of the opinion that the ratio laid down in the said decision is not applicable to the present case.
14.4 The plaintiff has next relied upon a decision in the case of T. Oertli A.G. v. E.J. Bowman (London) 1959 RTC 1. In this case O.A.G., a Swiss Company granted licence to P. Ltd. to manufacture patented mixing machine and to use the licensor's registered trade mark Turmix, for such machine which licence formally transferred to B Ltd. In 1949, the licence was terminated. B Ltd/continued for a time to manufacture and sale Turmix Machines, but later sold mixing machines which they claim to be improvement under the mark Magimix. O.A.G. sued P Ltd., B Ltd. and its Directors. In the above facts, the Court took the view that there was no justification to hold that mixing machine under the name Magimix represented the product of O.A.G. Use of Magimix was held can never amount to passing off on the basis of the trade mark Turmix. Moreover, the Court also held that the word Turmix had not become distinctive of the goods of O.A.G. And since it was held on facts not to be distinctive of O. A.G., B Ltd. could use it. Considering the above facts the Court also observed that B Ltd. made and marketed Turmix Machines without O.A.G. Ltd. having control or having had any power to control the manufacture, distribution or sale of the machines and without there having being notice of any kind to the purchasers that O. A.G. Ltd. had any connection with the machines. Consequently, no action could lie against B Ltd. for passing off.
14.5 It would be evident from the above that the facts of the present case prima facie do not establish any factor whereby acquisition of goodwill either shared or absolute would be of the plaintiff. The following facts also negate the claim of shared goodwill:
(i) The plaintiff has always stated on all packing material that the trade mark is used under licence given by the partnership firm.
(ii) The agreement between the plaintiff and the firm clearly establishes complete control by the proprietor.
(iii) Not only is there theoretical control of the proprietor i.e. the firm on the licensee i.e. the plaintiff. Factually there is an overall all pervasive control by the partners of the firm on the Limited Company manufacturing the products under licence as the partners are Directors of the Limited Company. Even the blending of flavour in the manufacturing of tobacco is admittedly claimed to have been done by the partner [Rajendra Majithia, who also happens to be the Managing Director of the company].
(iv) While the plaintiff company was presently the only licensee, it undisputedly was not an exclusive licensee and such exclusive licence has to be conferred by the proprietor, which the proprietor has not. (v) There is no association of the mark in the eyes of the public with Babul "Products Pvt. Ltd. since the public has always associated the mark with the licensor and proprietor M/s. Babul Products. In fact the company also acknowledges in all packing material the ownership of the marks in Babul Products. For years together even when the company was not the sole manufacture and was manufacturing in parallel with M/s. Babul Products, the common thread in all the goods sold was that they were sold under the licence given by partnership firm.
(v) Under Section 48(2) even statutorily use of trade mark by way of permitted use shall be deemed not to be used by a person other than the proprietor not only for the purposes of Section 47 of the Act, but also for any other purpose for which such use is material under this Act or any other law. (vii) The plaintiff company has also regularly paid Royalty to the firm for the use of the marks covered under Licence Agreement.
14.6 Therefore I am of the opinion that on the facts of the case, there is no question of any shared goodwill available to the plaintiff. The plaintiff has clearly acknowledged that it is not the proprietor of the marks (i) in the registered users' agreement, and (ii) even in the plaint filed by them in the present proceedings and, therefore, are estopped from contending that the firm and its partners are not the only sole proprietors even in common law of the marks.
14.7 As stated above, only a proprietor is entitled to take action in common law in respect of the trade marks and none else. Even the agreement of 19.3.1999 cannot confer a right on the plaintiff to take action. It appears that even if such agreement is treated as conferring a power of attorney to the plaintiff to take action, such action can only be initiated in the name and on behalf of the proprietor namely, M/s. Babul Products or its partners. Reliance placed on 2003 (27) PTC 265 (Del) is misplaced since in the facts of that case the Court came to the conclusion that the plaintiff Casio India Company Ltd. was the proprietor in India in respect of the mark.
14.8 The claim that plaintiff had obtained specific consent is also devoid of merits since post dissolution, the consent of all partners has never been obtained before commencing the present proceedings.
14.9 I am of further of the prima facie opinion that the use of the word BABUL in the trading name and style will not entitle to protection of its goodwill therein since that name and style has been adopted as the said Limited Company was incorporated by the proprietors of the mark BABUL with the sole intention of getting the goods manufactured and marketed through the said company under a licence. So long as the licence continues plaintiff can legitimately use its name and on termination of the licence the proprietors can restrain the plaintiff from using the name BABUL in its corporate name. There is no question of any goodwill getting acquired in such name. Further, assuming for the sake of argument that the plaintiff can continue to use the word BABUL in its trading name and style, it cannot be used as against and to the exclusion of the proprietors/co-proprietors of the mark.
14.10 The plaintiff is not a proprietor and cannot claim that the defendant is passing off his goods as those coming from the plaintiff. Even if there is a shared goodwill, it is the plaintiff who is a sharer of the goodwill belonging jointly to defendant alongwith the other partners of the erstwhile firm. There is no application of Section 24(2) of the Trade Marks Act to goodwill in common law and the co-owners would be entitled to use the trade marks. Such user cannot be stalled on the premises that the plaintiff allegedly shares the proprietorship in the goodwill.
14.11 I find that the plea of oral licence in Copyright is contrary to Section 19(2) of the Copyright Act read with Section 30A. Section 19(2) clearly provides that any assignment of copyright at any work shall identify such work and shall specify the rights and the duration and territorial extent of such assignment. This provision applies with necessary adaptation in relation to a licence under Section 30. Therefore a licence under Section 30 must identify the work. Such identification would not be possible by an oral licence. No objection being raised by the owner of the copyright to the alleged use by the plaintiff also will not imply an oral licence.
14.12 I am of the opinion that the interpretation sought that no interest in right is given to the plaintiff and the licence given to the plaintiff is mere dispensation and not one under Section 30 that is to say that the plaintiff is conferred an oral licence not one which is contemplated under Section 30. If this contention is accepted, it would imply that the plaintiff in the facts of the case, has been given a licence by the firm to use the copyright as a mere dispensation, such licence being not one contemplated in Chapter-6 of the Copyright Act. Section 54 of the Copyrights Act, which defines owner of the copyright for the purpose of Chapter-12 to include an exclusive licensee cannot cover the plaintiff to whom a mere dispensation is allegedly given by the owner. For to be an exclusive licensee under Section 54(a), the plaintiff has to be a licensee as contemplated under Section 30 of the Copyright Act and not merely a person to whom an oral licence has been given. This apart, the plaintiff has to be an exclusive licencee which would imply that the owner namely the firm is not entitled to give licence in respect of the copyrights to any other person.
14.13 It is required to be noted that right of action under a Copyright Act cannot be conferred either by any agreement or by any specific consent to any party unless such party is a licensee as contemplated under Section 30 and exclusive licensee that is to say none others can be conferred such licence. The plea that plaintiff on the date of the suit was an exclusive licensee is an argument without merit. Conferment of licence is the prerogative of the proprietor and what is conferred is available to the licensee alone. It's an admitted position that the proprietor namely the firm has never contended that the plaintiff is an exclusive licensee in respect of trade marks or copyrights. In absence of conferment of exclusive licensee by the mere fact that plaintiff happened to be the only licensee would not mean that it's an exclusive licensee. Even under the written user agreement for trade mark, the firm has never granted an exclusive licence to the plaintiff and, therefore, no inference can ever be drawn that the firm has granted by way of an oral licence, an exclusive licence to the plaintiff for use of the copyright.
14.14 Even if there was on oral licence granted by the firm to the plaintiff, it would be void as it is without any consideration. The only payment made by the plaintiff to the firm is of the royalty under the users' agreement which is only for the use of the marks licenced thereunder. Therefore, there has been no payment whatsoever for the alleged licencing of the copyright. Assuming such payment being made for the sake of argument, such payment cannot under any law make the licence irrevocable. This contention that the licence has become irrevocable is pure ipse dixit.
14.15 It is also prima facie evidence that the marks and labels have all throughout been associated with the erstwhile partnership of M/s. Babul Products. The marks and labels identify the products as being connected exclusively to the partnership firm of Babul Products as clearly mentioned on the label. Use by a licensee is always use by the owner and the licensee cannot claim any independent proprietorship on the marks more so when the licensee is manufacturing under the supervision of the partner of the proprietor M/s. Babul Products.
14.16 In any case, the defendant who is the proprietor of the mark has been using the mark alongwith the other proprietors since its registration and/or use. The plaintiff's use is also use by the defendant and the other co-owners as partners of the erstwhile Plaintiff cannot claim any prior user, as the use of the plaintiff is the use of M/s. Babul Products [Section 48(2) of Trade Marks Act] of which the defendant is a partner. Therefore, reliance placed on AIR 1995 Delhi 144 for grant of temporary injunction is misplaced. For applying the said judgment the plaintiff would firstly require to establish its locus standi to file a suit against the co-owner of the marks and copyrights post dissolution of the firm.
14.17 On the facts of the case I find that the connection of the marks and labels has all throughout been with the partnership firm of which the defendant partner. The plaintiff was a mere licensee and does not have any goodwill for the reasons stated above. Under the circumstances no reliance can be placed on 1990 Supplement SCC 727 and .
15. From the evidence on record it shows that Kaushik Majithia has filed an affidavit before the Trade Mark Registry wherein he has categorically stated that the agreement is effective from 1.4.1999 and is to end on 31st March 2000 giving non-exclusive right of use their said trade marks. The plaintiff cannot dispute the fact that the plaintiff is a licensee of the proprietor viz. The firm in respect of 17 trade marks listed in Schedule-A and not in respect of any other trade marks, whether registered or not, or any of the copyrights, whether registered or not. It is not a licensee of any copyright, unregistered trade marks and Trade Marks Nos. 706876, 722395 and 722396. Further, it is a common knowledge that only a person who is the owner of property is entitled to sue in respect of the property or any right violated in respect of such property. Since Proprietary right in a trade mark is recognized in common law, any action in respect of such right (such as passing off) can only be taken by the proprietor of the trade mark or any person who happens to be a power of attorney holder of the proprietor in the name of the proprietor. No one else can take action for passing off. Therefore, the plaintiff, which is merely a non-exclusive licensee cannot take any action for passing off. Therefore, I am of the opinion that the plaintiff has not established any prima facie case for grant of interim injunction.
15.1 From the evidence on record it appears that the plaintiff although having applied for being a registered user of mark has not in fact been registered as a user in the Register. Therefore, I am of the opinion that the plaintiff is not entitled to initiate proceedings under the provisions of the Trade Marks Act. Moreover, this right conferred under Section 52 only on a registered proprietor is subject to any agreements subsisting between the parties. On the facts of the case, on the date of the suit the agreement had been terminated and even under the said agreement the plaintiff is not entitled to take action without obtaining consent of the firm for instituting the suit.
15.2 Apart from the fact that the so-called consent is obtained only from one group of partners, on the date of the suit the firm itself was dissolved. Upon dissolution of the firm, it is impossible to have consent and, therefore, Section 52 of the Act cannot be pressed into service. It is also required to be noted that the plaintiff has not joined either the erstwhile firm or all its partners as defendants in the suit. It is also an admitted fact that the plaintiff is merely a permitted user. It is also evident from the registered users agreement that there is no grant of license of any copyright in view of the fact that no copyright share listed in Schedule-A. 15.3. Section 2(v) of the Act defines registered proprietor as a person for the time being entered in the register as proprietor of the trade mark. From the evidence on record it is clear that Mukesh Majithia's name appears in the registered trade marks as one of the joint proprietors of the trade mark and is consequently a registered proprietor. Section 29 stipulates that registered trade mark is infringed by a person who not being a registered proprietor or person using by way of permitted use, uses in the course of trade a mark which is identical with or deceptively similar to the registered trade marks. Therefore, I am of the prima facie opinion that there cannot be any infringement of the trade mark by Mukesh Majithia who is one of the registered proprietors.
15.4 The plaintiff has relied upon Section 24 of the Trade Marks Act, 1999 to contend that the plaintiff as a licensee of the erstwhile partnership firm is entitled to take action even against one of the partners since the registration of the mark is of the firm and the partners jointly. However, in view of notice terminating the license issued on 6.2.2005 and in view of the dissolution of the firm on 9.2.2005 there cannot be erstwhile partnership of which the plaintiff can be a licensee. A bare perusal of Section 24 it is clear that said section provides for a situation at the stage of registration of the mark and does not provide for the consequences on severance on the joint status of the joint proprietors by dissolution of partnership of otherwise. In my view, the situation on such severance is required to be dealt with either under the Contract Act, the Partnership Act or on the principle of co-ownership of the proper. On the dissolution of erstwhile firm, it ceases to be the registered proprietor of the marks, the partners of the erstwhile firm having acquired goodwill by use of the marks since even prior to the registration would continue to be the co-owners of the marks in common law with a right to get themselves registered as independent proprietors under Section 12 of the Act.
15.5 I do not find any force in the submission of the plaintiff that its use of the mark is prior to the use of the mark by Mukesh Majithia and, therefore, it can take passing off action against Mukesh Majithia. The use by the plaintiff is only as a licensee and such use has to be treated in law as use by the proprietor viz. the erstwhile firm of M/s Babul Products. There cannot be any independent use and there has never been any independent use by the plaintiff and all the sale and use by the plaintiff has to be attributed as use of the proprietor, namely the firm both under Section 48(2) Trade Marks Act and in common law. No use by a licensee can be considered as its use. Therefore, there is no prior user of plaintiff and the use has only been of the erstwhile firm M/s Babul Products. Moreover, the plaintiff has all throughout acknowledged that it is only a licensee of the erstwhile firm M/s Babul Products which is evident from the label itself. Further, all throughout the plaintiff has paid royalty to the erstwhile firm.
15.6 In substance, in case of dissolution of firm which owns trade marks registered or otherwise, the remedy of the partners lies under the Partnership Act for it is under that Act alone that inter se rights amongst the partners in the goodwill trade marks, copyrights, etc, will have to be determined. There is no remedy which can be claimed by a licensee either under the Trade Marks Act and the Copyright Act nor in common law. I am therefore of the considered opinion that the plaintiff has no prima facie case for getting interim relief.
15.7 I also do not find any merits in the contention raised by the plaintiff in respect of Section 53 of the Partnership Act. A bare reading of the said section would make it clear that it is only a partner or its representative who can prevent another partner or its representative from using any of the property of the firm for his own benefit and there is no absolute embargo under Section 53 entitling any one to claim that the partner should not use the property of the firm.
15.8 From the evidence on record the trial Court prima facie found that it is an admitted fact that the plaintiff used the trademark Babul being the licensee of the erstwhile firm M/s Babul Products under the Registered User's Agreement dated 19.3.1999 as also found that the defendant is also co-proprietor of the trade mark and that various litigations between the partners of M/s Babul Products are pending in various Courts. From the evidence it is found that the defendant was the partner of the erstwhile firm M/s Babul Products and he has given notice for dissolution of the firm which is legal under Section 43 of the Partnership Act. It is required to be noted that though the plaintiff has approached the Court for infringement and passing off action by the defendant, the proprietor of the trade mark is not joined as a party. It is by now established law that licensee cannot claim for infringement of trade mark without consent of the proprietor. There is no dispute that the registration certificate of the trade marks and copy rights produced on record shows the name of the defendant as co-owner of the trade mark Babul.
15.9 Apart from that the affidavit filed by Mr. Kaushik Majithia clearly shows that the use of trade mark by the plaintiff is of non-exclusive right. Therefore, in view of law laid down by the Hon'ble Supreme Court in the case of Sohanlal v. Amin Chand & Sons, the defendant cannot be restrained from using the trade marks belonging to the erstwhile firm. The trial Court has also prima facie found that the defendant being the co-proprietor of the trade mark, he cannot be restrained from using the same. Further, the trial Court has rightly come to the conclusion that without adducing evidence, it cannot be decided whether the plaintiff will suffer loss or not.
15.10 It may not be out of place to mention that in CMA No. 60/2005 interim relief was refused and First appeal was filed before this Court.
15.11 In any case, prima facie the trial Court was of the opinion that if the injunction is granted, the defendant will suffer irreparable loss which cannot be compensated in terms of money. The plaintiff-appellant has failed to pointed out any reason to take a contrary view taken by the trial Court.
16. It is required to be noted that the jurisdiction of the appellate Court is very limited. This has been asserted in the decision reported in 1942 Appeal Cases page 130. At page 138 of the said decision it is stated as under:
"...The appellate tribunal is not at liberty merely to substitute its own exercise of discretion for the discretion already exercised by the Judge. In other words, appellate authorities ought not to reverse the order merely because they would themselves have exercised the original discretion, had it attached to them, in a different way. But if the appellate tribunal reaches the clear conclusion that there has been a wrongful exercise of discretion in that no weight, or no sufficient weight, has been given to relevant considerations such as those urged before us by the appellant, then the reversal of the order on appeal may be justified. This matter was elaborately discussed in the decision of this House in Evans v. Bartlam (2), where the proposition was stated by my noble and learned friend, Lord Wright, as follows (3): "It is clear that the Court of Appeal should not interfere with the discretion of a Judge acting within his jurisdiction unless the Court is clearly satisfied that he was wrong. But the Court is not entitled simply to say that if then, to have applied a wrong principle. The Court must if necessary examine a new the relevant facts and circumstances in order to exercise a discretion by way of review which may reverse or vary the order. Otherwise in interlocutory matters the Judge might be regarded as independent of supervision. Yet an interlocutory order of the Judge may often be of decisive importance on the final issue of the case, and one which requires a careful examination by the Court of Appeal. Thus, in Gardner v. Jay (I), Bowen L. J. in discussing the discretion of the Judge as regards mode of trial says: "That discretion, like other judicial discretions, must be exercised according to common sense and according to justice, and if there is a miscarriage in the exercise of it, it will be reviewed."
16.1 The above view has been followed by the Apex Court in the case of U.P. Cooperative Federation Ltd. v. Sunder Bros, Delhi, . Paragraph 8 of the said decision is relevant which reads as under:
"(8) It is well established that where the discretion vested in the Court under Section 34 of the Indian Arbitration Act has been exercised by the lower Court the appellate Court should be slow to interfere with the exercise of that discretion. In dealing with the matter raised before it at the appellate stage the appellate Court would normally not be justified in interfering with the exercise of the discretion under appeal solely on the ground that if it had considered the matter at the trial stage it may have come to a contrary conclusion. If the discretion has been exercised by the trial Court reasonably and in a judicial manner the fact that the appellate Court would have taken a different view may not justify interference with the trial Court's exercise of discretion. As is often said, it is ordinarily not open to the appellate Court to substitute its own exercise of discretion for that of the trial Judge; but if it appears to the appellate Court that in exercising its discretion the trial Court has acted unreasonably or capriciously or has ignored relevant facts then it would certainly be open to the appellate Court to interfere with the trial Court's exercise of jurisdiction."
16.2 Similar view has been reiterated by the Apex Court in case of Laxmikant v. Patel v. Chetanbhai Shah, .
17. Thus, after a detailed discussion the trial Court has found that the plaintiff has not established prima facie case for grant of interim relief. The trial Court held that the plaintiff the balance of convenience is not in favour of the plaintiff. Further the trial Court found that if the injunction is granted, the defendant will suffer irreparable loss which cannot be compensated in terms of money.
18. For the foregoing reasons, I find that the view taken by the trial Court is just and proper and I do not find any merits in the matter. The appeal is, therefore, dismissed. No order as to costs. Since the main appeal is disposed of Civil Application No. 2887/2005 is disposed of. Interim relief stands vacated.
19. Looking to the peculiar facts of the case the trial Court is directed to expedite the hearing of the suit and to dispose of the same within a period of six months from the date of receipt of writ of this Court. It may not be out of place to mention that it is desirable to hear all the suits between the parties which will save judicial time.
FURTHER ORDER At this stage Mr. Mihir Joshi, Senior Advocate for the appellant requested that the interim relief may be extended for a period of four weeks. Mr. Mihir Thakore, Senior Advocate for the respondent has objected to this request. However, in the interest of Justice, the interim order as granted by the Supreme Court shall continue upto 8th August 2005.