Calcutta High Court
Yasmin Khalique & Ors vs Mukhtar Alam on 3 October, 2018
Equivalent citations: AIRONLINE 2018 CAL 1285
Author: Ashis Kumar Chakraborty
Bench: Ashis Kumar Chakraborty
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IN THE HIGH COURT AT CALCUTTA
ORIGINAL JURISDICTION
ORIGINAL SIDE
G.A.1331 of 2018
with
A.P. No. 282 of 2018
YASMIN KHALIQUE & ORS.
VS.
MUKHTAR ALAM
BEFORE:
The Hon'ble JUSTICE ASHIS KUMAR CHAKRABORTY
For the petitioners : Mr. Ajay Krishna Chatterjee, Sr. Advocate,
Mr. Shyamal Sarkar, Sr. Advocate,
Mr. Sohail Haque, Advocate,
Mr. M.I.A. Lodhi, Advocate.
For the respondent : Mr. Jishnu Saha, Sr. Advocate,
Mr. Jayjit Ganguly, Advocate,
Mr. Tarique Quasinuddin, Advocate,
Mr. Zainab Rahur, Advocate.
Judgement on: 03.10.2018
Ashis Kumar Chakraborty, J.
This is an application under Section 9 of the Arbitration and Conciliation Act, 1996, as amended by Act No. 3 of 2016 (in short, "the Act of 1996").
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The petitioner nos. 1 and 2 and the sole respondent are the partners of the petitioner no. 3 firm namely, M/S. Md. Musa & Co. (hereinafter referred to as "the petitioner no. 3 firm") which carries on business of manufacturing and dealing in tobacco gul under the brand name, "Musa Ka Gul". The petitioner no. 1 is the mother of the petitioner no. 2 and the respondent is the brother- in- law (husband's brother) of the petitioner no. 1. Until March 31, 1992 the respondent had been carrying on the business of manufacturing and dealing in tobacco gul , under the name and style of Md. Musa & Co as the sole proprietor thereof. By a deed of partnership dated April 1, 1992 entered into between the petitioner no. 1 and the respondent, the petitioner no. 3 firm was constituted which took over the proprietorship business of the respondent. Under the said partnership deed dated April 01, 1992 each of the parties therein had 50% share in the profit and loss of the petitioner no.3 firm. Subsequently, there was a reconstitution of the petitioner no. 3 firm and by a deed of partnership dated April 01, 2006, the petitioner no. 2 was inducted as a partner of the petitioner no.3 firm. As per the said deed of partnership dated April 01, 2006 (hereinafter referred to as "the deed of partnership") the petitioner nos. 1 and 2 each has 25% share and the respondent has 50% share in the profit and loss of the business of the petitioner no.3 firm. Clause 12 of the deed of partnership provides that each partner shall be just and faithful to the other partners in all the transactions relating to the partnership and shall at all times be responsible to give the other partners a just and faithful account of the partnership's affairs. As per clause 15 of the deed of partnership, all matters of differences relating to the affairs of the partnership shall be referred to arbitration according and subject to the provisions of the Arbitration Act in force, for the time being. Clause 16 of the deed of partnership contemplates that matters for which no provision has been made, shall be controlled and governed by the Indian Partnership Act and/or any statutory modification thereto. According to the petitioners, the petitioner no. 3 firm is the owner of the trade 3 mark "Musa Ka Gul" duly registered by the Registrar of Trade Marks. A copy of the registration certificate issued by the Trade Marks Registry, as disclosed by the petitioner reflects that the registration of the said trade mark "MUSA KA GUL" in favour of the petitioner no. 3 firm is valid up to April 19, 2019. By consent of all partners, by three royalty agreements dated April 01, 2011, April 01, 2012 and August 01, 2012 the petitioner no. 3 granted licence in favour of the three organisations namely, M.M. Industries, J.S. Industries and M.M.I. Tobacco, respectively to use its said trade mark upon payment of royalty. The said royalty agreements were signed by the respondent on behalf of the partners of the petitioner no. 3 firm. According to the petitioners, during the year 2017 they noticed sudden fall in the sale of the product of the petitioner no. 3 firm and many spurious and/or deceptively similar products have surfaced in the market. In February, 2018 the petitioners received a letter from one of its sales representative at Bareily , in the state of U.P. that one M/S M.S. Industries has been selling 'Gul' with the brand name, "Musa Ka Gul". Upon a complaint being lodged with the Police Authorities at Bareily the said sales representative of the petitioner received a tax invoice issued by one M/s. M.S. Industries of 53, Phears Lane, Kolkata - 700 012 selling huge quantities on "Musa Ka Gul" to the dealer of Bareily, U.P. He also got a circular issued by the respondent, in the letter head of the petitioner no. 3 firm, alleging himself to be the owner of "Musa Ka Gul Super" and that M/s. M.S. Industries situated at Pakuria, Domjur, Howrah is an associated company of the petitioner no. 3 firm, entitled to manufacture in the brand name of "Musa Ka Gul Super". It was further alleged that the product manufactured by M/s. M.S. Industries was absolutely genuine and requested all the customers not to lend their ears to false rumor. Thereafter, the petitioner no. 1 and 2 became suspicious and upon enquiries, came to know that huge quantities of spurious "Musa Ka Gul" being manufactured and sold by M/s. M.S. Industries who has its factory at Domjur, Distric: Howrah. They further came to learn that the said 4 M/s. Industries is owned by Shaheena Mukter, the wife of the respondent who has got herself registered with the Goods and Service Tax Authorities as well as the Central Excise Authorities and that the respondent and her said wife had opened a bank account in their name with Vijaya Bank, C.R. Avenue, Kolkata by furnishing the address of the petitioner no. 3 firm. Apart from the allegations that the respondent, with his wife Shaheena Muktar have committed various acts of fraud upon them, the petitioners have claimed that as a partner of the petitioner no. 3 firm the respondent is legally liable and obliged not to indulge in or run any parallel business like that of the petitioner no.3 firm or compete with the business of the latter. It is asserted that as a partner of the petitioner no. 3 firm the respondent has an obligation to be faithful and trustworthy to the petitioner nos. 1 and 2 but by reason of his parallel business through M/S M.S. Industries, the respondent is clandestinely diverting the business of the petitioner no.3 firm. The petitioners further claim that the said brand name "Musa Ka Gul" and the products are the property of the petitioner no.3 firm and each of the partners of the petitioner no. 3 firm has contractual, as also legal obligation to secure such property and not to do any such act or deed which would in any way cause harm to or loss of the said property vis-à-vis the partnership firm. The petitioners have also raised a claim of Rs. 1, 77,41,960/- against the respondent on account of fall of sales turn over and loss or damage suffered by them due to illegal diversion of the business in favour of M.S. Industries.
On May 04, 2018 the petitioners filed the application, A.P. No. 282 of 2018, under Section 9 of the Act of 1996, praying for, inter alia, an order of injunction restraining the respondent whether by himself or his wife or servants or agents or otherwise howsoever from running a parallel business of manufacturing or dealing with or selling "Musa Ka Gul" or "Tobacco Gul" by the name of M/s. M.S. Industries or in any manner whatsoever and for appointment of a special officer to inspect the office, factory and sales office of M/s. M.S. Industries at 53, Phears Lane, 5 Kolkata and at Pakuria, Lakshmanpur, Howrah, to make an inventory and submit a report before this Court. The petitioners also prayed for an order directing the special officer to take custody of the books, accounts, ledgers, documents and stock of Gul relating to M/s. M.S. Industries. Upon the application being moved, on May 11, 2018 a learned Single Judge of this Court passed an order appointing an advocate of this Court as the special officer to inspect the office, factory or wherever the respondent is operating from or manufacturing, selling or circulating products under the name/mark "Musa Ka Gul" manufactured by M/s. M.S. Industries or under any other name or entity under which the respondent may be operating at any given point of time. The special officer was further directed to make an inventory and submit a report to this Court. In terms of the said order dated May 11, 2018 the special officer filed his report before this Court stating that the office address of M/s. M.S. Industries at 53,Phears Lane, Kolkata - 700 012 is in fact the residential accommodation of one Mehfooz Alam and no business is being carried on therein. In his report the special officer further stated that when he visited the factory of M/S M.S. Industries at Domjur, huge quantities of tobacco gul manufactured for sale, in filled containers and packed in cartoons were lying thereat. He also found huge quantities of raw materials for manufacture of tobacco gul lying at the said factory premises. As per the report of the special officer, during his visit to the said factory of M/S M.S. Industries the durwan of the factory connected him, over mobile phone, to the respondent who expressed his inability to be present at the said factory After filing of the above report by the special officer, on June 13, 2018 the petitioners filed an application, G.A. No. 1331 of 2018 praying for, inter alia, an order of injunction restraining the respondent from taking any step prejudicial to the interest of the petitioner no. 3 firm or making false allegation or writing frivolous letters to the statutory authorities. In the said application, the petitioners have alleged that by misusing the stationary of the petitioner no. 3, the respondent has 6 been issuing false circulars to the agents and distributors of the petitioner no. 3 firm alleging that the petitioner no. 3 has cancelled the trade mark user licence of M/s. M.M. Industries and M/s. M.M.I. Tobacco Pvt. Ltd. and doing other mischief hampering the business of the respondent no. 3 firm. On June 14, 2018 this Court directed the parties to file their respective affidavits in both the applications.
The respondent filed its affidavits-in-opposition to the application, A.P.282 of 2018 and the application G.A. No.1331 of 2018, respectively. The respondent has alleged that the business M/s. M.S. Industries is owned by his wife, Shaheena Muktar who is not party to the arbitration agreement invoked by the petitioners in this application and, as such, the petitioner is not entitled to obtain any order in respect of the business carried on by M/s. Industries. He has further alleged that the business of 'Gul' and/or 'Tobacco' based tooth powder was initiated by Md. Musa, the grandfather of himself and Md. Khalique, the husband of the petitioner no. 1. After the death of Md. Musa in January, 1972, his business was continued by his son Md. Subedar and his brother Md. Islam under the name of style of Md. Musa & Sons with its business address at Khardha, 24- Parganas (North). The said Md. Musa & Sons used to deal in 'Gul' under the brand name 'Ghora Marka Musa Ka Gul'. Based on an application on July 15, 1982 the said mark 'Ghora Marka Musa Ka Gul' was registered by Md. Musa & Sons. It was further alleged that the phrase "Musa Ka Gul"
with synonymous of Late. Md. Musa and the family he left behind. The registration of the mark "Ghora Marka Musa Ka Gul" was renewed from time to time by M/s. Md. Musa & Sons and that on February 28, 1983 a separate mark with bust photo of Md. Musa with the word "Ghora Marka Musa Ka Gul" was applied for. According to the respondent, , by a deed of assignment dated November 01, 1991 all the rights of the said mark namely, "Ghora Marka Musa Ka Gul" of the bust photo of Md. Musa was assigned to him by the then partner of Md. Musa & Sons. In the meantime, 7 in 1989-1990 he started a separate business in the name and style of Md. Musa & Co. a proprietorship firm which used to carry on business of Gul under the trade mark "Musa Ka Gul Super". Since the respondent wanted the family to prosper in its entirety and not just his branch, by the first partnership deed dated April 01, 1992 he formed the partnership firm of the respondent no.3 which took over the business of the proprietorship firm M/s. Md. Musa & Co. Thereafter, with effect from April 01, 2006 the petitioner no. 3 was reconstituted and the petitioner no.2, being the son of said Md. Khalique and the petitioner no. 1, was inducted as a partner. The respondent has further alleged that although, the trade mark "Musa Ka Gul Super" with the bust of Md. Subedar is the registered trade mark of the partnership firm, but since the original business was started by Md. Musa, the late grandfather of himself, Md. Khalique, Iftekhar Alam and Imtiaz Alam it was clearly understood between the four brothers and the respective branches of the family that everybody in the family would be entitled to the said business in the same manner, albeit under licence from the petitioner no.3 firm, as permitted users of the said trade mark. On the basis of such understanding, the petitioner no. 3 firm entered into the said licence agreements dated April 01, 2011, April 01, 2012 and August 01, 2012 with the said M/s. M.M. Industries, M/s. M.M.I. Tobacco Pvt. Ltd. and M/s. J.S. Industries, respectively.
According to the respondent, while M/s. M.M. Industries is the partnership firm of Md. Khalique (father of the petitioner no. 2 and husband of the petitioner no. 1) and his two sons, Md. Danish and Md. Nazish, the said M/s. J. S. Industries is the partnership firm of Iftekhar Alam and Imtiaz Alam (both are the brothers of the respondent and Md. Khalique) and the share holders of M.M.I. Tobacco Pvt. Ltd. are Md. Khalique and his two sons Md. Danish and Md. Nazish. The business of the petitioner no. 3 firm, therefore, includes earning of royalty by allowing the other branches of the family to act as bona fide permitted users of the registered trade mark "Musa Ka 8 Gul Super". It has been alleged that when the businesses carried on by the said Md. Khalique with his two other sons Md. Danish and Md. Nazish through the said M.M. Industries and M.M.I. Tobacco Pvt. Ltd. on the basis of the said royalty agreements dated April 01, 2011 and August 01, 2012, respectively as well as that of Iftekhar Alam and Imtiaz Alam (the two brothers of the respondent and Md. Khalique) through their partnership firm J.S. Industries on the basis of the royalty agreement dated April 01, 2012 by using the registered trade mark of the petitioner no. 3 "Musa Ka Gul Super" are not treated as competing with the business of the petitioner no. 3 firm, the petitioners cannot claim the business carried on by Shaheena Muktar, under the name and style of M/s. M.S. Industries, to be competing with the business of the petitioner no. 3 firm. The respondent further alleged that in the petition, the petitioners have suppressed the fact that with consent of all the partners of the firm, on April 01, 2017 the petitioner no. 3 also executed a fourth licence agreement in favour of Shaheena Muktar, with conditions identical to the said three licence agreements dated April 01, 2011, April 01, 2012 and August 01, 2012 executed in favour of M.M. Industries, M.M.I. Tobacco Pvt. Ltd. and J.S. Industries. According to the respondent, in spite of being fully aware of the said agreement dated April 01, 2017 entered into with his wife, Shaheena Muktar and having readily consented thereto, the petitioner nos. 1 and 2 are presently feigning ignorance of the said agreement. It has been further alleged that pursuant to the said licence agreement dated April 01, 2017 the M/s. M.S. Industries deposited Rs. 3,677/- in the bank account of the petitioner no. 3 as royalty, paid at the rate of .05% of its yearly turnover but the petitioners while moving the application A.P.No.282 of 2018 suppressed the said fact from the Court and after passing of the interim order dated May 11, 2018 they reversed the entry of deposit of Rs. 3,677/- on legal advice. In its affidavit the respondent has asserted that inasmuch as, M/s. M.S. Industries is an independent business started by his wife, with a valid licence the allegations made by the 9 petitioners that he is running as parallel business is false. It has been further alleged that the said licence was granted by the petitioner no. 3 in favour of the wife of the respondent in accordance with the understanding among the members of the larger family that anyone of the family may manufacture and sale products under the brand name "Musa Ka Gul Super" and such manufacture and sale shall be considered a bona fide permitted user of the trade mark. According to the respondent, it is only when he started opposing the action on the part of the Md. Khalique in illegally changing the design of the container and applying for deceptively similar trade marks for registration, the present application has been filed by suppressing the material facts and on the basis of a concocted stories which are far from truth. The respondent has further claimed that by their conduct, the petitioner nos. 1 and 2 are precluded from objecting to the business of M/s. M.S. Industries. In the affidavit, the respondent disclosed a copy of the applications filed by M/s. M.M. Industries before the Registrar of Trade Marks of Kolkata, for registration of two trade marks in the name ,"Kaptain Marka Musa Ka Gul" under Trade mark No. 1034115 and another under the name, "Ghora Marka Musa Ka Gul" under Trade mark No. 347592, both under clause 34 and alleged that both the said marks are deceptively similar to the mark for protection of which the petitioners have filed the present application. Further, both M/s. M.M. Industries and M/s. M.M.I. Tobacco Pvt. Ltd. had been acting in breach of their respective licence agreements dated April 01, 2011 and August 01, 2012 by not disclosing in the boxes/containers that they are selling their products as the mere licence user granted by the petitioner no. 3.
In the affidavit-in-reply, the petitioners have alleged that the purported licence agreement dated April 01, 2017 with M/s. M.S. Industries, disclosed by the respondent in the affidavit-in- opposition, has been unilaterally executed by the respondent behind the back of the petitioner nos. 1 and 2 and both the witnesses of the said purported document have no connection with the 10 petitioner no.3. It has been further alleged that the said licence agreement is antedated and the same has been brought into existence to create evidence only after the petitioners filed the application, A.P. No. 283 of 2018. According to the petitioners, in the recital part of the said purported agreement dated April 01, 2017 it is mentioned that trade mark user of the second part (M/s. M.S. Industries) is also manufacturer of 'Tobacco Gul' but, till March 31,2017 no such business in the domain of 'Tobacco Gul' was run by M/s. M.S. Industries. The said purported agreement dated April 01, 2017 records the office of M/s. M.S. Industries is at 53, Phears Lane, Room No. 9, 1st Floor, Kolkata - 700 012. The special officer appointed by the learned Single Judge of this Court on May 11, 2018 inspected the said Room No. 9, 1st Floor of Premises No. 53, Phears Lane and in the report filed before this Court he has stated the said Room No. 4 of Premises No. 53, Phears Lane to be the residential address of one, Mehfooz Ahmed and his family and no business is being carried on from the said room. Thus, the business address M/s. M.S. Industries as recorded in the said agreement dated April 01, 2017 relied upon by the respondent is a fake address. According to the petitioners, even if it be accepted for the sake of argument that the alleged licence agreement dated April 01, 2017 in favour of M/s. M.S. Industries is a valid document, even then there is no explanation as to why the said M/s. M.S. Industries already being an agreement holder relating to the trade mark "Musa Ka Gul Super" filed an application, bearing No. 3689439 on November 28, 2017 for a new trade mark of 'Geeo Gul', a copy whereof has been disclosed in the affidavit-in- reply. The petitioners have also denied the allegation made by the respondent about the concept of a larger family or its members being entitled to avail of the trade mark licences. According to the petitioners, the licence to use the trade mark "Musa Ka Gul Super" was always given to those who are actually eligible for the same and because of the need of the petitioner no. 3 firm to expand the business for which royalty was charged from the said licensed trade mark users. Such arrangement 11 has been continuing since 1992 and accepted by all concerned. The business continued by the petitioner nos. 1 and 2 and the respondent through the petitioner no. 3 firm has nothing to do with Md. Subedar except that his bust photo was used out of respect and affection. According to the petitioners, since the respondent unilaterally and behind their back executed the alleged agreement dated April 01, 2017 in favour of the M/s. M.S. Industries, the same is void and not binding upon them. The petitioners have further alleged that the Shaheena Muktar is a front and alter ego of the respondent and in fact the business of M/s. M.S. Industries belongs to the respondent. Therefore, Shaheena Muktar is not a necessary party to be added in this application. With regard to the payment of Rs. 3,677/- by M/s. M.S. Industries to the petitioner no. 3, the petitioners claimed that from the bank statement of account of M/s. M.S. Industries, it is evident that the said amount was debited only on May 14, 2018 and not on March 12, 2018. Further, the said back statement shows the name of the respondent, "Muktar Alam' as the nominee in the account of M/s. M.S. Industries. Since the said M/s. M.S Industries mala fide deposited the said amount of Rs. 3,677 in the bank of the petitioner no. 3, on the basis of a complaint made by the petitioner nos. 1 and 2, the said transaction of Rs. 3,677 was reversed by the bank of the petitioner no. 3 on May 17, 2018.
Mr. Ajay Krishna Chatterjee, learned Senior Advocate appearing in support of the application of the petitioner submitted that as is evident from the deed of partnership dated April 01, 1992, being Annexure-"A" to the petition that the respondent was carrying on the business under the name and style of M/s. Md. Musa & Co. as the sole proprietor thereof and being in need of financial help he approached the petitioner no. 1 who had sufficient fund for investment to become a partner. Thus, in order to meet his financial requirement the respondent converted his sole proprietorship business into a partnership firm, that is, the petitioner no.3 by taking the petitioner no. 1 as a partner thereof. Subsequently, the petitioner no.3 firm was reconstituted and 12 the petitioner no. 2 was also inducted as a partner of the firm. He further submitted that it is evident from the certificate issued by the Trade marks Registry - Kolkata, being Annexure-"B" to petition that it was the petitioner no.3 firm which obtained the registration of the trade mark "Musa Ka Gul". It was emphasised that the petitioner no.3 firm, with consent of all partners granted the trade mark user licences to the said M/s. M.M. Industries, M/s. J.S. Industries and M/s. M.M.I. Tobaco Pvt. Ltd.. Therefore, when the said royalty agreements/user licences were entered into with M/s. M.M. Industries, M/s. J.S. Industries and M/s. M.M.I. Tobaco Pvt. Ltd., respectively by the petitioner no. 3 firm with consent of all the partners, the mere fact that the same were signed by the respondent on behalf of the petitioner no. 3 firm cannot be construed to confer any right on the respondent to enter into any further agreement for the user of the trade mark "Musa Ka Gul"
without the consent of the petitioner nos. 1 and 2. It was further submitted that the facts of the petitioner discovering the tax invoice of M/s. M.S. Industries carrying on business dealing in tobacco gul, similar to the products of the petitioner no. 3 firm and the circular issued by the respondent, in the letter head of the petitioner no. 3 firm, alleging that he is the owner of "Musa Ka Gul Super" and that M/s. M.S. Industries is an associate company of the petitioner no. 3 entitled to manufacture in the brand name of "Musa Ka Gul Super" is absolutely genuine. According to the petitioner, the G.S.T. and Central Excise registrations and the bank account opened for M.S. Industries, in the joint names of the respondent and his wife giving the same address of the petitioner no. 3 firm at 25B, Zakaria Street, Kolkata go to show that the respondent is carrying on competing business to the detriment of the petitioner no. 3 firm and for his personal gain. Under the circumstances, disputes having arisen between the parties, the petitioner has been constrained to invoke the arbitration agreement contained in the deed of partnership and file the application, A.P. 282 of 2018 praying for various reliefs against the respondent. It was submitted by the petitioner 13 that by the said order dated May 11, 2018 a learned Single Judge of this Court has held that the respondent is connected with M/s. M.S. Industries and such finding of fact has not been challenged by the respondent before the appellate Court. In the present case, even from the report filed by the special officer before this Court it is evident that the office address mentioned by M/s. M.S. Industries at 53, Phears Lane is the residential address of one Mehfooz Ahmed and no business is carried thereat. The report of the special officer further discloses that the factory of M/s. M.S. Industries at Domjur, Howrah, is controlled, run and managed by the respondent and, as such, when the special officer visited the said factory the durwan contacted the respondent over mobile phone who spoke with the special officer and expressed his inability to come to the factory. The special officer's report further discloses that huge quantities of tobacco gul is manufactured for sale by M/s. M.S. Industries, filled up containers and packed cartoons and further huge quantities of raw materials for production of tobacco gul were lying at the said factory. Mr. Chatterjee submitted that the respondent has not taken exception to the report of the special officer, nor has his wife Shaheena Muktar approached this Court complaining against the visit of the special officer at the said factory of M/s. M.S. Industries at Howrah. All these, according to Mr. Chatterjee, establish that it is the respondent who is running the competing business of manufacturing gul through M/s. M.S. Industries. It was further submitted by the petitioner that after the passing of the said order dated May 11, 2018 and the special officers visited at the factory of the M/s. M.S. Industries, Howrah, the respondent started issuing circulars on the stolen letter heads of the petitioner no. 3 firm to the distributors and agents alleging that the good sold by the said two licence holders namely, M/s. M.M. Industries and M/s. M.M.I. Tobacco Pvt. Ltd. are spurious with an intention to damage of goodwill of the petitioner no. 3. Thus, the petitioners were further constrained to file an application, G.A. 1331 of 2018 against the respondent praying for, inter alia, an order of injunction 14 restraining the respondent from taking any step prejudicial to the interest of the petitioner no. 3 firm or from harassing the licensed usurers, distributors, agents or making false allegations or writing frivolous letters to the statutory authorities against the petitioners in any manner whatsoever. Mr. Chatterjee urged that the arbitration agreement contained in clause 15 of the deed of partnership providing for adjudication of all disputes and differences between the partners of the petitioner no. 3 firm through arbitration is not in dispute. He referred to clause 12 of the deed of partnership and submitted that as the partner of the firm, the respondent has an obligation to the petitioner nos. 1 and 2 to be just and faithful in all transactions relating to the partnership and remain responsible to give a just and faithful account of the partnership affairs to the petitioner nos. 1 and 2. It was emphasised that as per clause 16 of the deed of partnership, all other matters for which no provision has been made shall be controlled and governed by the Indian Partnership Act, 1932 and/or any statutory modification thereto. Learned Senior Counsel for the petitioner also relied on the provisions contained in Sections 4, 9, 14, and 16 of the Indian Partnership Act, 1932 (hereinafter referred to as "the Act of 1932"). He submitted that the term "partnership" as defined in Section 4 of the Act of 1932 is the relation between persons who have agreed to share the profit of a business carried on, by all or any of them acting for all. It was stressed that under Section 9 of the Act of 1932, the respondent as the partner of the petitioner no. 3 firm is not only bound to carry on the business of the petitioner no. 3 firm to the greatest common advantage, but he is also liable to be just and faithful to the petitioner nos. 1 and 2 partners and to render true accounts and full information of all things affecting the firm to the petitioner nos. 1 and 2. It was further contended that in terms of Sections 14 and 15 of the Act of 1932 the registered trade mark of the petitioner no. 3 firm, namely, 'Musa Ka Gul' is the property of the petitioner no. 3 firm and in the absence of any agreement between the partners of the petitioner no. 3 firm, the respondent cannot use the said trade 15 mark to carry on any business of his own. Learned counsel for the petitioner cited the decision of the Division Bench of the Bombay High Court in the case of Girish Mulchand Meheta & Anr. -vs- Mahesh S. Mehata & Anr., reported in 2009 SCC OnLine Bom 2067. He further relied on a Single Bench decision of the Allahabad High Court in the case of Mumtaz Ali-vs-Kasim Ali reported in 1913 SCC OnLine All 229 : (1913) 11 All LJ 423 and submitted that one partner can restrain another from carrying on business in rivalry and even if the petitioner may recover profits or compensation an injunction is necessary to prevent multiplicity of the judicial proceedings. It was urged that even in the absence of any negative covenant in the partnership deed, no partner is entitled to do competing business or any other rival business and the Court may grant injunction at the instance of a partner to restrain any other partner from acting contrary to the obligations imposed upon him and when the acts are in breach of good faith which is the implied duty of every partner.
However, Mr. Jishnu Saha, learned Senior Counsel appearing for the respondent first raised objection with regard to the maintainability of the present application. He also argued that even on merit the petitioners are not entitled to obtain any order in this application. It was first argued that the application under Section 9 of the Act of 1996 has been affirmed by the petitioner no. 2 not only for himself but also on behalf of the petitioner nos. 1 and 3. It was submitted that the petitioner no. 2 affirmed the petition on behalf of the petitioner nos. 1 and 3 on the basis of a general power of attorney executed by the petitioner no. 2 alone. According to Mr. Saha, the petitioner no. 1 does not have any authority to unilaterally grant a power of attorney to the petitioner no. 2 to act on behalf of the petitioner no. 3 firm. He further contended that it is the case of the petitioners in their application that the respondent is carrying on a competing business with that of the petitioner no. 3 firm through M/s. M.S. Industries, which is owned by Shaheena Muktar. According to Mr. Saha, 16 while it is accepted that orders may be passed against third party in an application filed under Section 9 of the Act of 1996 but it cannot be so done, unless the third party is made a party to the application and the latter is given a right to contest the application by filing an affidavit. Therefore, according to the respondent, in the absence of Shaheena Muktar the application filed by the petitioners under Section 9 of the Act of 1996 essentially seeking relief against her firm M/s. M.S. Industries cannot be maintained. It was further submitted by the respondent that as stated in his affidavit-in-opposition, the petitioner's application suffers from deliberate suppression and misrepresentation of material facts. Although the petitioners have disclosed the three royalty agreements entered into by the petitioner no. 3 firm on April 01, 2011, April 01, 2012 and August 01, 2012 the petitioners have deliberately withheld from this Court the nature of ownership and control of the said M/S. M.M. Industries, M/s. J.S. Industries and M/S/ M.M.I. Tobacco Pvt. Ltd. Based on the case made out by the respondent in his affidavit-in-opposition. Mr. Saha further submitted that the business of 'Musa Ka Gul' was started by one Md. Musa who also conceived of the Trade mark 'Musa Ka Gul' and during his lifetime the said Md. Musa carried on business of 'Musa Ka Gul' along with his son and some of his grandsons. After the death of Md. Musa one of his two sons Md. Islam relinquished all his rights and interests of the business of the 'Musa Ka Gul' which was thereafter carried on by his brother Md. Subedarr and his sons namely, Md. Khalique, the respondent Md. Muktar Alam, one Md. Iftekhar Alam and one Md. Imtiaz Alam. As mentioned by the respondent in his affidavit-in-opposition Md. Khalique has three sons namely, Md. Saheed (the petitioner no. 2) and Md. Danish and Md. Nazish. It was all along the agreed between Md. Subedar and his sons of the said trade mark "Musa Ka Gul" conceived and made popular by Md. Musa could be used by all of them and, as such, after the registration of the trade mark "Musa Ka Gul" the partners of the petitioner no. 3 firm Md. Musa and Co. allowed /granted 17 the permissive user of the said trade mark M/s. M.M. Industries, Ms. J.S. Industries and M/s. M.M.I. Tobacco Pvt. Ltd. which are the business units belonging to Md. Khalique and his sons. Learned counsel for the respondent further submitted that in their affidavit-in-reply the petitioners have admitted that an application for registration of the trade mark 'Ghora Marka Musa Ka Gul' was made on October 22, 1979 and since the essential feature of the trade mark is clearly the mark 'Musa Ka Gul' it is evident that the said mark has been in use at least since 1979, much prior to the constitution of the petitioner no. 3 firm. Even the respondent as a grandson of Md. Musa and a son of Md. Subedar, without any objection from any of his brothers, started using the mark 'Musa Ka Gul' and it was only subsequent to the formation of the petitioner no. 3 firm, the said trade mark 'Musa Ka Gul' was registered in the name of the firm. According to the respondent even the said partnership deed dated April 01, 1992 entered into between himself and the petitioner no. 1 goes to show that up to March 31, 1992, he alone as the proprietor of Md. Musa & Co. was carrying on the business of manufacturing and selling of tobacco gul. As Md. Musa & Co. was at all material times engaged in the manufacture of tobacco gul under the brand name 'Musa Ka Gul', it is evident that the respondent was the prior user of the trade mark 'Musa Ka Gul' at least in so far as the petitioner nos. 1 and 2 and the petitioner no. 3 firm are concerned.
By placing reliance on the decisions of the Supreme Court in the cases of Toyota Jidosha Kabushiki Kaisha - vs- Prius Auto Industries Ltd. & Ors. reported in (2018) 2 SCC 1 (paras 26 &
27) and S. Syed Mohideen -vs- P. Sulochana Bai reported in (2016) 2 SCC 683 (para 30), Mr. Saha argued that since the respondent is the prior user of the trade mark 'Musa Ka Gul' he has the right superior to that of the petitioner no. 3 firm the registered user of the same. It was further argued that in view of the implied contract between the heirs of Md. Subedar that any member can use the Trade mark 'Musa Ka Gul' the said licence agreements dated April 01, 2011, April 01, 2012 and 18 August 01, 2012 were executed in favour of M/s. M.M. Industries, M/s. M.M.I. Tobacco Pvt. Ltd. and M/s. J.S. Industries controlled by business of units belonging to Md. Khalique, his sons Iftakhar Alam and Imtiaz Alam. Pursuant to such implied contract the petitioner no. 3 firm has granted the said licence dated April 01, 2017 to the name of M/s. M.S. Industries owned by his wife, being a family member of the said Md. Subedarr. The said licence agreement dated April 01, 2017 was acted upon and on March 12, 2018 a sum of Rs. 3677/- was deposited in the account of the petitioner no. 3 firm as the royalty under the said agreement even before filing of the application, A.P. No. 282 of 2018. The petitioner no. 3 firm having allowed other members of the family to manufacture and sell 'Musa Ka Gul' cannot object to the respondent carrying on the same competing business. It was further argued for the respondent that on February 13, 2017 and May 11, 2017 the husband and sons of the petitioner no. 1 have applied for registration of deceptively similar trade marks in the name of "Kaptain Marka Musa Ka Gul" and "Ghora Marka Musa Ka Gul" which is not objected to the petitioners, but it is the respondent who has raised objection to the registration of the said trademarks. It was strenuously argued for the respondent that admittedly the partnership is at will and only upon a notice being issued by the respondent for dissolution, the firm will stand dissolved and any order of injunction either passed in favour of the petitioner no. 3 or against the respondent will become infructuous. According to the respondent in any event, this Court will not pass any order of injunction as prayed for by the petitioner which will become infructuous once the respondent issues a notice for dissolution of the petitioner no. 3 firm. In support of such contention, reliance was placed by the petitioner on the decision of the Court of Appeal in the case of Fletcher & Anr. -vs- Royal Automobile Club reported in (2000) 1 BCLC 331 as well as the decisions of the Supreme Court in the cases of Loknath Padhan- vs. - Birendra Kumar Sahu, reported in (1974) 1 SCC 526 and Ashok Kumar Sonkar - vs- Union of India & Ors. 19 reported in (2007) 4 SCC 54. It was further emphasised that even in order to obtain an order of injunction in an application filed under Section 9 of the Act of 1996 an applicant has to meet the test of prima facie case, balance of convenience and irreparable injury. In this regard, counsel for the respondent relied on the decision of the Supreme Court in the case of Adhunik Steels Ltd. -vs- Orissa Manganese & Minerals (P) Ltd. reported in (2007) 7 SCC 125. According to the respondent, in any event, when the petitioners have already quantified the loss and damage suffered by the firm by reason of the so called competing businesses carried on by the respondent they are not entitled to the relief sought for in this application.
In his reply, learned counsel for the petitioners submitted that although on the first date of hearing it was contended by the respondent that M/s. M.S. Industries is owned by his wife and no injunction can be granted against her being a stranger to the partnership, but at the subsequent stage of hearing the respondent gave up such point. It was submitted that even in the order dated May 11, 2018 the learned Single Judge of this Court held that the respondent is connected with M/s. M.S. Industries and such fact has not been denied by the counsel appearing for the respondent. According to the petitioners, when the respondent accepted the said order dated May 11, 2018 and did not prefer any appeal therefrom there is no merit in the said contention that the petitioner cannot obtain any order of injunction as prayed for any application. It was further submitted that from the passbook of the bank account maintained by Ms. Shaheena Muktar, relating to the business of M/s. M.S. Industries it is clear that the same is the joint bank account in the name of the respondent and his wife and the address is that of the petitioner no. 3 firm, namely C/o Md. Musa & Co., 25B Zakaria Street, Kolkata. Further, in support of the claim that the firm Md. Musa & Co. has its office at 53, Phears Lane, Kolkata - 700 012 the respondent has disclosed a rent receipt, appearing at page 193 of the affidavit-in-opposition, reflecting himself to be the tenant in respect of 20 the said room. Even the trade licence issued by the Domjur Panchayat Samity disclosed by the respondent at page 189 of his affidavit-in-opposition that the same was issued in his own name, which was subsequently scored through and his name of his wife included. It was stressed by the petitioners that such striking off the name of the respondent and the interpolation suggest that the same was done subsequent to the original licence issued in the name of the respondent and obviously, after initiation of the present proceeding. By referring to the said licence agreement dated April 01, 2017 disclosed by the respondent it is pointed out by the petitioners that the said document mentions about two licenses being issued by the petitioner no. 3 in favour of M/s. M.S. Industries on the same date as April 01, 2017.
In the present case, the respondent was carrying on the business, dealing in tobacco gul with the mark 'Musa Ka Gul', as the sole proprietor of the firm Md. Musa & Co. However, by virtue of the said deed of partnership entered into with the petitioner no. 1 the respondent converted the sole proprietorship firm into the partnership firm. The deed of partnership dated April 01, 1992 records the business of the firm Md. Musa & Co. shall be the same of manufacturing and dealing in tobacco gul earlier carried on by the respondent as the sole proprietor of the firm and that the respondent had approached the petitioner no. 1 for financial help for extension of the business and the latter agreed to become a partner of the by investing money. It was the partnership firm, Md. Musa & Co. who applied for and obtained the registration of the trade mark 'Musa Ka Gul' on April, 1999 which was renewed on April, 2009. Subsequently, on April 01, 2006 the partnership firm Md. Musa & Co. was reconstituted and the petitioner no. 2 was also inducted as a partner of the firm. Clause 12 of the deed of partnership dated April 1,2006 stipulates that each partner shall be just and faithful to the other partners in all the transactions relating to the partnership and shall at all times be responsible to give the other partners a just and faithful account of the partnership's 21 affairs. Undisputedly, by the royalty agreements dated April 01, 2011, April 01, 2012 and August 01, 2012 the petitioner no. 3 firm granted licence and user of the said trade mark 'Musa Ka Gul' in favour of the said M/s. M.M. Industries, M/s. J.S. Industries and M/s. M.M.I. Tobacco Pvt. Ltd. against the payment of annual royalty. The consent of the petitioner nos. 1 and 2 as well as the respondent for entering into the said three royalty agreements by the petitioner no. 3 firm is not in dispute. In fact, till the year 2017 there was no dispute between the parties with regard to the management and affairs of the petitioner no. 3 firm. According to the petitioners, it was only in February, 2018, after receipt of the copies of the tax invoice and the circular issued of the respondent in the letter head of the petitioner no. 3 firm alleging himself to be the owner of the 'Musa Ka Gul Super' and that M/s. M.S. Industries is an associate company of the petitioner no. 3 firm, they made enquiries and came to know about the business of manufacturing and selling of 'Musa Ka Gul' carried on by the respondent in the name of M/s. M.S. Industries for the wrongful gain of himself and to the detriment of the petitioner no. 3 firm. In the application, it is the case of the petitioners that the respondent has actively concealed the fact of opening the business of M/s. M.S. Industries through his wife manufacturing and dealing in Tobacco Gul with the brand name, 'Musa Ka Gul Super' which is a parallel business as that of the petitioner no. 3 firm. It is argued that the petitioner nos. 1 and 2 had no knowledge of the said licence agreement dated April 01, 2017 signed by the respondent as the partner of the petitioner no. 3 firm thereby granting licence to the said M/s. M.S. Industries to use the trade mark 'Musa Ka Gul Super' to manufacture and deal in Tobacco Gul and the said agreement is not binding upon them and the petitioner no. 3 firm. The petitioners have also claimed to have returned the wrongful deposit of Rs. 3677/- in the bank account by M/s. M.S. Industries, to the bank account of the latter.
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The principal defence set up by the respondent is that M/s. M.S. Industries is the business of his wife Shaheena Muktar and on the strength of the said licence agreement dated April 01, 2017 entered into between the petitioner no. 3 firm and Shaheena Muktar, the latter is carrying on the business of manufacture and sell of Tobacco Gul under the brand name of 'Musa Ka Gul Super'. The respondent has also asserted that on behalf of the petitioner no. 3 firm he was authorised to and signed the said licence agreement dated April 01, 2017 within the knowledge of the petitioner nos. 1 and 2. In order to substantiate the consent of the petitioner nos. 1 and 2 about the said agreement dated April 01, 2017 the respondent in his affidavit-in-opposition disclosed the bank statement of the petitioner no. 3 firm reflecting deposit of Rs. 3677/- by M/s. M.S. Industries on account of the yearly royalty at the rate of 0.5% of its annual sales. Apart from the deposit of the said amount of Rs. 3677/- in the bank account of the petitioner no. 3 firm on May 14, 2018, the respondent has not disclosed anything else to substantiate that either the petitioner nos. 1 and 2 had consented to the said licence agreement dated April 01, 2017 by the petitioner no. 3 firm in favour of the M/s. M.S. Industries or they had any knowledge thereof. In their affidavit-in-reply the petitioners have categorically asserted not to have consented to the grant of any licence user of the said trade mark 'Musa Ka Gul' in favour of M/s. M.S. Industries and that the bank statement of the M/s. M.S. Industries, as disclosed by the respondent ex-facie shows that the said amount of Rs. 3677/- was deposited in the bank account of the petitioner no. 3 on May 14, 2018, that is, after passing of the said order dated May 11, 2018 by the learned Single Judge of this Court in this application. The petitioners have further substantiated that at their instructions, the bank of the respondent no. 3 reversed the entry of the said figure. The bank statement relied upon by the respondent, being Annexure-"F" to his affidavit-in-opposition further substantiates that not only he had received Rs. 5 lakh from Md. Musa & Co. but he had also deposited Rs. 2 lakh in the said bank account of Md. 23 Musa & Co. The bank account of Md. Musa & Co. also records the address of the latter to be at 25 B, Zakaria Street, Kolkata which is the address of the petitioner no. 3. All these facts render prima facie credence to the claim of the petitioners that the respondent is involved in the business of the said firm, namely Md. Musa & Co. In fact, the argument advanced for the respondent that if an order of injunction is passed by this Court, he may render the same infructuous by issuing a notice of dissolution of the petitioner no. 3 firm goes to show his desperation to continue with the business of the firm Md. Musa & Co. on the strength of the said agreement for royalty dated April 01, 2017 which prima facie appears to have been entered into by him with the said M/s. M.S. Industries without any notice to or knowledge of the petitioner nos. 1 and 2. In the facts of this case, the decisions of the Supreme Court in the cases of Toyota Jidosha Kabushiki Kaisha (supra), S. Syed Mohideen (supra), Loknath Padhan (supra) and Ashok Kumar Sonkar(supra) and the decision of the Court of Appeal in the case of Fletcher & Anr. -vs- Royal Automobile Club (supra) have no application. Clause 16 0f the deed of partnership stipulates that matters for which no provision has been made in the deed shall be governed by the Act of 1932. Since sections239 to 266 of The Contract Act, 1872 , relating to Partnership stands repealed the decision of the learned Single Judge of the Allahabad High Court in the case of Mumtaz Ali ( supra) cannot be applied in the present case. however,, Section 9 of the Act of 1932 lays down that that the partners are bound to carry on the business of the firm to the greatest common advantage, to be just and faithful to each other, and to render true accounts and full information of all things affecting the firm to any partner and his legal representative.
In the facts of the present case already discussed above, it is evident that the respondent is involved in the business of M/S M. S. Industries and he is not carrying on the business of the petitioner no.3 firm to the greatest common advantage nor is he just and faithful to the petitioner 24 nos. 1 and 2, the remaining partners of the petitioner no. 3. The respondent has entered into the said license agreement dated April 1, 2017 on behalf of the petitioner no. 3 with M/S M. S. Industries without the knowledge or consent of the petitioner no. 1 and 2. He is running a business of manufacturing and sale of Gul which is similar to the business of the petitioner no. 3 without obtaining any consent from the respondent nos. 1 and 2 and without their knowledge.
For the reasons as aforesaid, I find that the petitioners have made out a prima facie case and the balance of convenience and inconvenience also lies in their favour for obtaining interim production. The petitioners have fulfilled the tests laid down by the Supreme Court in the case of Adhunik Steels Ltd. (supra). Accordingly, there shall be a order of injunction restraining the respondent whether by himself or through his agents or assignees or nominees or otherwise however from running a parallel business of manufacturing or dealing with or selling " Musa Ka Gul" or "Tobaco Gul", by the name of M/S M. S. Industries or in any manner whatsoever until the publication of the arbitral award. The respondent is also restrained from making any false allegation or writing any frivolous letter to any statutory authority or to any person whosoever affecting the business of the petitioner no. 3 firm, until publication of the arbitral award.
With the above directions, the application, G.A.1331 of 2018 with A.P. No. 282 of 2018 stands disposed of.
Urgent certified website copies of this judgment, if applied for, be made available to the parties subject to compliance with all requisite formalities.
[Ashis Kumar Chakraborty, J.] 25