Madras High Court
Beardsell Limited vs Beardsell Polymers Pvt. Ltd on 5 April, 2022
Author: Senthilkumar Ramamoorthy
Bench: Senthilkumar Ramamoorthy
C.S.No.828 of 2016
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Judgment reserved on 23.03.2022
Judgment pronounced on 05.04.2022
CORAM
The Hon'ble Mr. Justice SENTHILKUMAR RAMAMOORTHY
Civil Suit No.828 of 2016
and
O.A.No.982 of 2016
Beardsell Limited
No.47, Greams Road,
Chennai – 600 006.
Rep. by its Company Secretary
Mr.K.Murali ... Plaintiff
vs.
1.Beardsell Polymers Pvt. Ltd,
A/3/1 Gillander House, N.S. Road,
Kolkata, West Bengal, India – 700 001.
Rep. by its Authorized Representative
Mr.Binay Kumar Mohta
2.Beardsell Equipments Pvt. Ltd.,
A/3/1 Gillander House, N.S. Road,
Kolkata, West Bengal, India – 700 001.
Rep. by its Authorized Representative
Mr.Ajay Kumar Mohta
3.Beardsell Eastern Pvt. Ltd.,
A/3/1 Gillander House, N.S. Road,
Kolkata, West Bengal, India – 700 001.
Rep. by its Authorized Representative
Mr.Binay Kumar Mohta
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C.S.No.828 of 2016
4.Bhagawan Das Mohta
PO Barbil
District Keonjhay
Orissa – 758 035.
5.Ajay Kumar Mohta
A-303 VIP Enclave
VIP Road,(Opp. Big Bazzar)
P S Rajarhat, District North 24 Parganas,
Kolkata 700 059. ... Defendants
Civil Suit is filed under Order VII, Rule 1 of CPC and Order IV
Rule 1 of Original Side Rules read with 27, 134 and 135 of the Trademarks
Act, 1999, to grant a decree and judgment on the following terms:
(a) Perpetual injunction restraining the defendants by themselves,
their directors, assigns, servants, agents, distributors, stockists, dealers, legal
heirs, representatives or any person/entity claiming through or under them
from using, advertising, offering for sale, offering service, hosting website etc
thereby passing off or enabling others to pass off or cause or assist others to
pass off the Defendants' goods/services as and for the Plaintiff's
goods/services by use of the trademark/corporate name BEARDSELL or any
other mark similar to that of the Plaintiff's trademark/corporate name in any
manner whatsoever;
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C.S.No.828 of 2016
(b) Surrender and destruction upon oath of all name boards, sign
boards, bill books, visiting cards, pamphlets, brochures, any advertising
materials, products, packaging materials, cartons, labels, blocks, dyes,
plates, moulds and other materials bearing the impugned mark/corporate
name 'Beardsell' or any other mark identical or deceptively similar to that of
the plaintiff's corporate name 'Beardsell' which is in possession, power and
custody of the Defendants;
(c) A preliminary decree be passed in favour of the Plaintiff to
render true and faithful accounts of profits earned by the Defendants by
establishing unauthorised companies under the name BEARDSELL and a
final decree be passed in favour of the Plaintiff for the amount of profits,
thus found to have been made by the Defendants after the latter have
rendered accounts;
(d) The Defendants be ordered to be pay a sum of Rs.1,00,000/- as
liquidated damages for committing acts of passing off and for the costs of
the suit.
For Plaintiff : M/s.Arun C.Mohan
Vasundhara Arun
For Defendants : Ms.Ashwini Vaidialingam
for M/s.Adithya Reddy
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C.S.No.828 of 2016
JUDGMENT
The suit is filed to restrain the Defendants from passing off their goods and services as the goods/services of the Plaintiff by using the trademark/corporate name 'Beardsell' or any other mark deceptively similar to that of the plaintiff's trademark/corporate name 'Beardsell'. Ancillary remedies by way of surrender of infringing material for destruction, a preliminary decree for rendition of accounts and a decree of profits on such basis, and for compensation in a sum of Rs.1,00,000/- as liquidated damages are prayed for.
2. The Plaintiff states that it is a company engaged in the business of manufacture of different industrial products such as pre-fabricated structures, manufacture and distribution of expanded polystyrene (EPS, which is more commonly known as thermocol), packaging and insulation, customized defence solutions, export of industrial equipment, etc. In 1969, the Plaintiff states that it honestly conceived, coined and adopted its corporate name ''Mettur Beardsell Ltd''. The corporate name of the Plaintiff was changed to Beardsell Limited in September 1983. The Plaintiff asserts that the name Beardsell is a coined word which refers exclusively to the _____________ https://www.mhc.tn.gov.in/judis Page No.4 of 28 C.S.No.828 of 2016 Plaintiff. According to the Plaintiff, the said corporate name/trademark has attained both reputation and goodwill for the quality of the goods sold by the Plaintiff by use over a considerable period of time. The sales turn over of the Plaintiff for the financial years 2005 - 2006 to 2015 - 2016 are set out to emphasise the goodwill and reputation of the Plaintiff.
3. Until the year 2003, the Plaintiff states that it had leased out its on-going EPS business to M/s.Calcutta Insulation Private Limited. In 2003, the Plaintiff decided to sell the said business to Mr.B.D.Mohta, the fourth Defendant herein, and entered into a Memorandum of Understanding dated 29.04.2003 (the MoU) in such regard. As per Clause 14 of the MoU, the Plaintiff was required to issue a no objection certificate to enable Mr.B.D.Mohta to undertake the transferred business in the name of a new company. Pursuant thereto, a no objection certificate was issued by the Plaintiff on 02.05.2003 to the Registrar of Companies, Kolkata, thereby permitting the fourth Defendant to use one of the following names: (a) Beardsell (E) Private Limited; (b) Beardsell (East) Private Limited; and (c) Beardsell Eastern Private Limited. Based on the said no objection certificate, the third Defendant was incorporated under the name and style of _____________ https://www.mhc.tn.gov.in/judis Page No.5 of 28 C.S.No.828 of 2016 Beardsell Eastern Private Limited. The Plaintiff asserts that it permitted only the third Defendant to carry on business by using the mark/corporate name Beardsell. However, it is stated that in the month of July 2014, the Plaintiff was shocked to discover that the second Defendant was incorporated under the name and style of Beardsell Equipment Private Limited. Shortly thereafter, the Plaintiff issued a letter dated 07.07.2014 calling upon the Defendants to stop using the mark Beardsell. By reply dated 09.12.2014, the Defendants confirmed the incorporation of the second Defendant as a sister concern of the third Defendant. Thereafter, upon further investigation, in or about September 2015, the Plaintiff reliably gathered that the first Defendant was incorporated under the name and style of Beardsell Polymers Private Limited. The Plaintiff asserts that the first and second Defendants have unlawfully appropriated the trademark/corporate name of the Plaintiff and that the said Defendants are carrying on a similar line of business. Therefore, members of the public are likely to be deceived into believing that the products and services offered by the Defendants originate from the Plaintiff. Therefore, the Plaintiff asserts that it is entitled to the reliefs prayed for in the suit.
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4. The common written statement of the Defendants is on record. The Defendants state that the Plaintiff sold its entire EPS business, including goodwill to the fourth Defendant. The Defendants further state that the Plaintiff was fully aware about the incorporation of the first Defendant at least eight years prior to the filing of the suit. The Defendants assert that there were oral discussions between the Plaintiff and the representative of the first Defendant and that the Plaintiff agreed not to object to the continuation of the first Defendant under the name and style of Beardsell. According to the Defendants, the Plaintiff does not have the right to claim exclusivity over the trade name Beardsell after having sold its business in its entirety.
5. The Defendants rely upon a no objection certificate issued by the Plaintiff on 20.08.2015 to the Directorate of Boilers, Kolkata, for transferring a boiler commissioned by the Plaintiff to any company nominated or proposed by the fourth Defendant. According to the Defendants, this is a clear acknowledgment that the Plaintiff had no objection to the use of the corporate name by any person/entity nominated by the fourth Defendant. The Defendants further state that the Plaintiff does _____________ https://www.mhc.tn.gov.in/judis Page No.7 of 28 C.S.No.828 of 2016 not have a market presence in East India because the Plaintiff transferred its Eastern India business to the fourth Defendant. Moreover, it is stated that in the absence of a market presence in East India, there is no likelihood of deception of consumers of the products marketed by the Defendants in East India. The Defendants also deny that Beardsell is a coined word. Instead, it is stated that the late Mr.W.A.Beardsell founded Mettur Beardsell Limited in the year 1936. The Defendants refute the contention that the Plaintiff has acquired significant reputation and goodwill. The Defendants also deny that the third Defendant is only a permitted user of the mark Beardsell. The Defendants further state that they have been in business for several years and have acquired significant reputation and goodwill. For all these reasons, the Defendants assert that the suit is liable to be dismissed.
6. Upon completion of pleadings, the following issues were framed by this Court:
(1) Whether the 4th Defendant is entitled to incorporate 3rd Defendant entity alone under MOU dated 29.04.2003(plaint document No.3) or whether MOU _____________ https://www.mhc.tn.gov.in/judis Page No.8 of 28 C.S.No.828 of 2016 gives 4th Defendant right to incorporate other entities including Defendants 1 and 2 also?
(2) Whether incorporation of the two entities, i.e., Defendants 1 and 2 by 4th Defendant under MOU dated 29.04.2003 tantamounts to passing off?
(3) Whether the complaint of passing off made by Plaintiff is hit by acquiescence?
(4) What other reliefs parties are entitled to?
7. The Plaintiff adduced oral evidence through Mr.M.S.Rangarajan, its Manager - cum Legal and Administration, who was examined as P.W.1. In course of the examination-in-chief of P.W.1, 11 documents were exhibited as Ex.P1 to Ex.P11. The Defendant adduced oral evidence through Mr.Ajay Kumar Mohta, who was examined as D.W.1. Five documents were exhibited through D.W.1 as Ex.D1 to Ex.D5.
Issue No.1:
8. The first issue relates to whether the fourth Defendant was entitled to incorporate only the third Defendant or whether the fourth _____________ https://www.mhc.tn.gov.in/judis Page No.9 of 28 C.S.No.828 of 2016 Defendant could incorporate other entities under the corporate name Beardsell. In order to address this issue, it is necessary to examine the MoU. The MoU was exhibited as Ex.P4. The recitals to the MoU indicate that the Plaintiff was engaged in the business of EPS manufacturing and marketing, insulation contracting activities and as the representative agent for many products all over India. The said recitals further indicate that the Plaintiff operated a branch at Kolkata, which was involved in contracting activities comprising hot, cold and acoustic insulation, structural and other related works, marketing of EPS products and as the agent of M/s.Anglo French Textiles for the sale of their fabric in the whole of the Eastern Region. The recitals record that the Plaintiff was the absolute owner of the fixed assets as detailed in Schedule – 1 to the MoU, which had been leased to M/s.Calcutta Insulation Private Limited. It further records that the Plaintiff agreed to sell the EPS business as a going concern together with the goodwill and all the furniture, fittings, fixtures, articles and things in the premises situated at A-3, Gillander House, North Block, Netaji Subhas Road, Kolkata – 700 001 along with the fixed assets situated at Village Donnagar, Post Office Ganthi Via, Ganga Nagar North 24 Paraganas, West Bengal – 743 250 for a consideration of Rs.18,79,000/-. _____________ https://www.mhc.tn.gov.in/judis Page No.10 of 28 C.S.No.828 of 2016
9. Clause 1 of the MoU records that the Plaintiff agreed to transfer and assign the EPS marketing business of Beardsell Limited (Kolkata) as a going concern to Mr.B.D.Mohta. Clause 7 of the MoU records that the vendor/Plaintiff was operating in the entire state of West Bengal and Southern U.P, Assam, Bihar, Jharkhand, Chattisgarh, Northern Orissa and North Eastern States. It further records that the Plaintiff would not operate the EPS business in these areas or compete with the purchaser in the said areas for a minimum of five years from the date of the MoU. Clause 7 also records that the fourth Defendant would not carry on the aforesaid business in any other area in competition with the Plaintiff for the same period of five years. Clause 14 of the of the MoU specifies that the Plaintiff would issue a no objection certificate to the fourth Defendant in order to facilitate the conduct of the business acquired under the MoU through a new company. Since this clause is of utmost significance, the Clause is set out below:
''The VENDOR will issue a 'NO
OBJECTION CERTIFICATE' immediately after
signing of this agreement to facilitate changing the operations covered under this agreement in a New _____________ https://www.mhc.tn.gov.in/judis Page No.11 of 28 C.S.No.828 of 2016 Company. It is the specific responsibility of the PURCHASER to get the new company formed.'' On perusal of Clause 14, it is pertinent to notice that it uses the expression in a ''New Company''. It also records that it would be the specific responsibility of the purchaser/4th Defendant to get the New Company formed. The scope of the MoU is the sale and purchase of the EPS business of the Plaintiff at Kolkata, on a going concern basis, along with specific assets so as to conduct such business in East India. As indicated earlier, the recitals disclose in no uncertain terms that the Plaintiff was operating its business, including the EPS business, in all parts of India. Clause 7, which is the non-compete clause, stipulates that the Plaintiff would not undertake the EPS business in East India for five years from the date of the MoU and that the fourth Defendant would not, likewise, undertake EPS business outside East India for five years. In order to enable the fourth Defendant to undertake the acquired business through a corporate entity, Clause 14 provides for the provision of a no objection certificate by the Plaintiff. Both from the text of Clause 14 and the immediate context of the MoU, it is clear that parties intended to facilitate the incorporation of one limited company _____________ https://www.mhc.tn.gov.in/judis Page No.12 of 28 C.S.No.828 of 2016 for purposes of carrying on the EPS business acquired by the fourth Defendant.
10. The Defendants contended that they are entitled to incorporate other entities under the corporate name Beardsell because the business was transferred along with goodwill. In this regard, the Defendants relied upon the Judgments of the Hon'ble Supreme Court in R.C. Cooper v. Union of India, 1970 SCR (3) 530, and CIT v. B.C. Srinivasa Setty, (1981) 2 SCC 460 and contended that goodwill is intangible and encompasses the benefits arising from the connections formed and reputation acquired by a business over the period of existence. According to the Defendants, this certainly includes the corporate name/trademark “Beardsell”. However, it should be reiterated that the scope of the MoU was limited to the transfer of the EPS business in the Eastern Region. Although the EPS business in the Eastern Region was transferred, the Plaintiff retained the EPS business in all other areas. If the intention of the Plaintiff was to assign the trademark/corporate name Beardsell to the fourth Defendant, the MoU would have provided for the same. Instead, the MoU merely imposes an obligation on the Plaintiff to facilitate the incorporation of a company by the fourth Defendant to conduct _____________ https://www.mhc.tn.gov.in/judis Page No.13 of 28 C.S.No.828 of 2016 the acquired business. From the above, the only reasonable inference is that the corporate name was not assigned or transferred under the MoU. Thus, Issue No.1 is decided in favour of the Plaintiff and against the Defendants.
Issue No.2:
11. Issue No.2 relates to whether the incorporation of the first and second Defendants by the fourth Defendant is tantamount to passing off.
At the outset, it should be noticed that the corporate names of the first and second Defendants are Beardsell Polymers Private Limited and Beardsell Equipment Private Limited, respectively. Both visually and phonetically, these corporate names are substantially similar to the corporate name of the Plaintiff. The admitted position is that the first Defendant is engaged in the EPS business. Therefore, there is little doubt that persons consuming the goods or availing of the services of the first Defendant are likely to confuse the origin of such goods or services with the goods and services of the Plaintiff. On this issue, the Plaintiff relied upon the judgments of the Hon'ble Supreme Court in Ramdev Food Products P. Ltd. v. Arvindhbhai Rambhai Patel and others (2006) 8 SCC 726 and Cadila Healthcare Ltd. v. Cadila Pharmaceuticals Ltd (2001) 5 SCC 73 (Cadila). By relying on these _____________ https://www.mhc.tn.gov.in/judis Page No.14 of 28 C.S.No.828 of 2016 judgments, the Plaintiff contended that the purpose of a trademark is to establish the connection between the goods or services and the entity manufacturing or providing such goods or services, as the case may be. To put it differently, the Plaintiff contended that the primary function of a trademark or corporate name is as a source identifier. In order to fulfil this primary function, it was contended that there should only be one source or one proprietor for every mark.
12. On the contrary, the Defendants contended that the Plaintiff had not established the use of products bearing the mark Beardsell or the provision of services under the mark Beardsell. The Defendants also contended that the turnover details provided by the Plaintiff have not been proved. The Defendants further contended that the products of the Defendants are clearly distinguishable from those of the Plaintiff inasmuch as the Defendants manufactured EPS/thermocol sheets for distribution purposes, whereas the Plaintiff manufactured packing or packaging material using EPS/thermocol. In support of these contentions, the Defendants relied on Laxmikant V. Patel v. Chetanbhai Shah (2002) 3 SCC 65 and Cadila and contended that the three elements of a passing-off action, _____________ https://www.mhc.tn.gov.in/judis Page No.15 of 28 C.S.No.828 of 2016 namely, reputation of goods or services, possibility of deception and likelihood of loss were not established.
13. In this case, the MoU itself discloses that the Plaintiff was engaged inter alia in EPS business (thermocol product related business) all over India. The undisputed position is that the third Defendant was incorporated for purposes of carrying on the acquired EPS business in East India and that the first Defendant currently carries on EPS business. Although the Defendants endeavoured to differentiate the EPS products of the Plaintiff and the first Defendant, such micro differentiation does not constitute a justifiable defence in an action for passing off based on a common corporate name/trademark. By way of substantiation, the Plaintiff relied on the use of its device and the reliance on its seven decade lineage by the first Defendant (Ex.P10). The Plaintiff also relied on its sales turnover as per a certificate issued by its chartered accountant (Ex.P3). The said certificate indicates a turnover of about Rs.151.22 crore in the financial year 2015-16. On considering all the above aspects, there is little doubt that the businesses are similar even if not identical, the products have acquired _____________ https://www.mhc.tn.gov.in/judis Page No.16 of 28 C.S.No.828 of 2016 goodwill and reputation and, therefore, the likelihood of deception cannot be discounted.
14. The Defendants raised a further defence that the transfer of business with goodwill, includes the transfer of the corporate name “Beardsell”, and relied upon Ramnik Vallabhdas Madhvani v. Taraben Pravinlal Madhvani (2004) 1 SCC 497 and, in particular, paragraph 68 thereof in this regard. On perusal of the MoU, it is clear that the EPS business in East India was transferred and the fourth Defendant was granted the right to operate this business through a “New Company”. The MoU recognised that this was only part of the pan-India business of the Plaintiff. In these circumstances, the transfer of goodwill under the MoU cannot be construed as including an assignment or transfer of ownership, whether sole or joint ownership, of the corporate name/trademark “Beardsell”. At best, in view of Clause 14, the Plaintiff agreed to permit one new company to carry on the acquired business, including by using the corporate name/trademark. For all these reasons, Issue No.2 is decided in favour of the Plaintiff and against the Defendants.
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15. Issue No. 3 pertains to whether the Plaintiff acquiesced in the use of the corporate name Beardsell by the first and second Defendants. The Plaintiff and the Defendants rely upon the letter dated 01.08.2008 from the Plaintiff to the Registrar of Companies. This document was exhibited as Ex.D1. By this communication, the Plaintiff objected to the use of the corporate name Beardsell by the first Defendant herein. Thus, this document establishes beyond doubt that the Plaintiff was aware of the incorporation of the first Defendant as of 01.08.2008. For such reason, the Defendants rely on this document in support of the plea of acquiescence. The Defendants also rely on question 19 and the answer thereto of D.W.1, in course of cross-examination, whereby he admitted knowledge of the incorporation of the first Defendant in 2008 and of the second Defendant in July 2014. Both parties rely on Power Control Appliances v. Sumeet Machines Pvt. Ltd. (1994) 2 SCC 448 (Power Control Appliances) and the Defendants also relied on Wockhardt Ltd. v. Torrent PharmaceuticalsLtd. (2018) 18 SCC 346 (Wockhardt).
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16. While on this topic, it may be noted that there are several related but distinct concepts: laches, acquiescence, waiver, estoppel and abandonment. Waiver requires adequate evidence of voluntary relinquishment, which may be one-off or permanent; estoppel requires adequate evidence of a representation that was acted upon to the prejudice of the person who acted thereon; and abandonment requires adequate evidence of permanent forsaking of rights. In order to constitute acquiescence, in contrast to laches, mere silence or inaction are not sufficient. There should be evidence that the Plaintiff was aware of the infringement of its rights and chose not to protest or initiate action in respect thereof. As instructed by judgments cited at the bar, whether the conduct of the person accused of acquiescence supports such inference is always a question of fact. The communication of 01.08.2008 is a communication from the Plaintiff to the Registrar of Companies protesting against the incorporation of a company under the name and style of Beardsell Polymers Private Limited. Therefore, this communication cannot be construed as evidence of acquiescence but the question of paramount significance is whether the alleged failure to initiate follow on action after issuing this _____________ https://www.mhc.tn.gov.in/judis Page No.19 of 28 C.S.No.828 of 2016 communication amounts to implied acquiescence. Thus, the key question is whether the subsequent inaction is tantamount to acquiescence.
17. In order to examine this question, subsequent communications and actions should be considered. The Plaintiff issued a subsequent communication of 07.07.2014 (Ex.P7) to the third Defendant calling upon the third Defendant to immediately change its name. Although this communication is misconceived because the Plaintiff previously expressly granted its no objection to the formation of a new company (the third Defendant) to undertake the EPS business in East India, it clearly indicates that the Plaintiff, albeit sporadically, continued to protest against the use of the corporate name Beardsell by the Defendants herein. Although this communication was addressed to the third Defendant, it was replied to by the second Defendant on 09.12.2014 (Ex.P8), through its lawyer, stating that the second Defendant was incorporated as a sister concern of the third Defendant to expand the business pursuant to the acquisition under the MoU. The suit was filed about two years later in November 2016. _____________ https://www.mhc.tn.gov.in/judis Page No.20 of 28 C.S.No.828 of 2016
18. Another aspect to be considered with regard to Issue No.3 is the assertion of the Defendants that, shortly after the communication of 01.08.2008 (Ex.D1), there was an oral agreement between the Plaintiff and the Defendants with regard to the consent of the Plaintiff to the continued use of the corporate name/trademark “Beardsell” by the first Defendant. Oral evidence to the said effect was adduced by the Defendants through the proof affidavit of D.W.1. In course of cross-examination, D.W.1 was asked whether minutes or other proof was available with regard to the oral agreement, and the answer was in the negative (Q&A 22). Especially when viewed in light of the subsequent cease and desist notice of 07.07.2014 (Ex.P7) to the third Defendant and, more importantly, the absence of a reference to the oral agreement in the reply dated 09.12.2014 (Ex.P8), the Defendants have failed to establish the oral agreement.
19. The last aspect to be considered, on this issue, is the impact and implication of the communication dated 20.08.2015 from the Plaintiff to the Director of Boilers, Kolkata. This document was exhibited as Ex.D3. By this communication, the Plaintiff stated that it has no objection to the transfer of a boiler to Mr.Ajay Kumar Mohta or any company suggested by _____________ https://www.mhc.tn.gov.in/judis Page No.21 of 28 C.S.No.828 of 2016 him. The Defendants relied on this letter as proof of acquiescence by also pointing out that the said boiler was transferred to the name of Beardsell Polymers Private Limited/the first Defendant. As discussed earlier, the MoU provided for the transfer of the EPS business of the Plaintiff in Kolkata to the fourth Defendant along with the assets of such business. Such MoU also stipulated that the Plaintiff should facilitate the transfer of such business to a “New Company” to be formed by the fourth Defendant. The communication of 20.08.2015 should be seen from this perspective. While the said communication read with the earlier 'no objection' letter to the Registrar of Companies, Kolkata, clearly evidences consent insofar as the third Defendant is concerned, it does not evidence acquiescence as regards the first or second Defendants. When the entire evidence on this issue is examined, there is adequate evidence of laches but not of acquiescence. Therefore, Issue No.3 is also decided in favour of the Plaintiff and against the Defendant.
Issue No.4
20. Issue No.4 relates to the reliefs that the parties to the suit are entitled to. The Plaintiff has prayed not only for injunctive relief but also for surrender of infringing materials and for rendition of accounts and damages. _____________ https://www.mhc.tn.gov.in/judis Page No.22 of 28 C.S.No.828 of 2016 No evidence has been adduced by the Plaintiff with regard to the claim of liquidated damages of Rs.1,00,000/-. Therefore, the Plaintiff is not entitled to such remedy. Although the Plaintiff has prayed for rendition of accounts and a decree for profits on such basis, the Plaintiff has clearly approached the court after considerable delay. The first Defendant was incorporated on 03.09.2007 and such incorporation was discovered by the Plaintiff in 2008. While delay and laches do not amount to acquiescence and, therefore, do not preclude a person from claiming non-discretionary relief from a court, delay is clearly a factor in deciding whether to consider a claim for damages because Section 73 of the Indian Contract Act, 1872, imposes an obligation on a party claiming damages to mitigate loss. To put it differently, the evidence on record clearly establishes that the Plaintiff was aware about the incorporation of the first Defendant as of 01.08.2008 and of the second Defendant in July 2014. In spite of being aware of the incorporation of these Defendants, the Plaintiff did not take measures to prevent the said Defendants from continuing operations until the suit was filed in November 2016. Thus, the Plaintiff has completely failed to mitigate loss by approaching this Court for injunctive and other relief earlier. Hence, the Plaintiff is not entitled to either rendition of accounts or a decree for profits. _____________ https://www.mhc.tn.gov.in/judis Page No.23 of 28 C.S.No.828 of 2016
21. As regards the claim for a perpetual injunction, although such relief is discretionary and delay is a material factor, it was concluded in relation to Issue No.2 that the use of the corporate name Beardsell by the Defendants would certainly deceive consumers of goods/services produced/provided by the first or second Defendant or any other entity formed by the Defendants as regards their origin. As regards the second Defendant, in reply to question 20 in course of the cross-examination of D.W.1, it was stated that the company is non-operational. There is evidence on record that the second Defendant was struck off from the register of companies(Ex.P9). Therefore, the risk is practically remote as regards the second Defendant but substantial as regards the first Defendant. At the same time, it is clear that the first Defendant is functioning under this corporate name for a considerable period of time. The change of a corporate name involves corporate actions such as the passing of resolutions at the board of directors and shareholder levels and the initiation of action with regulatory authorities, including the jurisdictional Registrar of Companies. The first Defendant should be provided reasonable time to undertake and complete such actions. For such purpose, the order of perpetual injunction will come _____________ https://www.mhc.tn.gov.in/judis Page No.24 of 28 C.S.No.828 of 2016 into operation 120 days after the date of receipt of a copy of the decree. During such time, the Defendants are also permitted to clear the existing inventory of stock bearing the infringing mark.
22.Accordingly, the suit is decreed on the following terms:
(i) Except the third Defendant, all the other Defendants are perpetually restrained from passing off their goods and services as that of the Plaintiff by carrying on business under the corporate name Beardsell or any other name deceptively similar thereto and from manufacturing or marketing goods or providing services bearing the mark Beardsell or any mark deceptively similar thereto.
(ii) The above injunction shall come into force as regards the first Defendant 120 days after the date of receipt of a copy of the decree.
(iii) Except the third Defendant, all the Defendants shall hand over for destruction all infringing materials bearing the mark Beardsell to the Plaintiff on the expiry of the said 120 days.
(iv) The Defendants shall pay costs assessed in a sum of Rs.2,00,000/- to the Plaintiff. The said sum shall include court fees, _____________ https://www.mhc.tn.gov.in/judis Page No.25 of 28 C.S.No.828 of 2016 lawyer's fees and other expenses. Consequently, connected original application is closed.
05.04.2022 Index : Yes Internet : Yes rrg Plaintiff's witness:
1.Mr.M.S.Rangarajan : P.W.1 Defendants' witness:
1.Mr.Ajaykumar Mohta : D.W.1 Documents exhibited by the Plaintiff:
Sl.N Exhibit Date Particulars of Documents
o s
1. Ex.P1 13.02.201 Copy of Board Resolution
9
2. Ex.P2 01.10.198 Incorporation certificate of the Plaintiff
3 Company.
3. Ex.P3 18.10.201 Chartered account certificate 6
4. Ex.P4 29.04.200 Memorandum of Understanding. 3
_____________ https://www.mhc.tn.gov.in/judis Page No.26 of 28 C.S.No.828 of 2016 Sl.N Exhibit Date Particulars of Documents o s
5. Ex.P5 02.05.200 No objection certificate issued by the Plaintiff 3
6. Ex.P6 25.06.200 Board of Resolution 3
7. Ex.P7 07.07.201 Cease and Desist notice issued by the Plaintiff 4
8. Ex.P8 09.12.201 Reply to the notice 4
9. Ex.P9 25.04.201 Print out of the company master date of second 9 Defendant taken from the website of Ministry of Corporate Affairs.
10. Ex.P10 25.04.201 3 pages of the print out taken from the website 9 www.beardsellpolymers.in.
11. Ex.P11 -
Copy of the company master data of the first Defendant taken from the website of Ministry of Corporate Affairs.
Documents exhibited by the Defendants:
Sl. Exhibits Date Particulars of Documents
No.
1. Ex.D1 01.08.2008 Copy of letter from the Plaintiff regarding the
first Defendant.
2. Ex.D2 07.07.2014 Notice by Plaintiff
3. Ex.D3 20.08.2015 No objection Letter
4. Ex.D4 08.03.2016 Certificate of change of ownership of boiler
5. Ex.D5 - Extract from Plaintiff's website showing date of
incorporation of Plaintiff.
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SKRJ
SENTHILKUMAR RAMAMOORTHY, J.
rrg
Pre-Delivery Judgment
C.S.No.828 of 2016
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