Delhi High Court
Chartered Financial Analysis ... vs The Institute Of Chartered Financial ... on 5 April, 2010
Author: Manmohan Singh
Bench: Manmohan Singh
..* HIGH COURT OF DELHI : NEW DELHI
+ IA No. 14353/2008, IA No. 14354/2008 and IA No.
1865/2009 in CS (OS) No. 210/2004
Chartered Financial Analysis Institute ...Plaintiff
Through: Mr. Sanjay Jain, Sr. Adv. with
Ms. Ruchi Jain and Mr. Rajender Kumar,
Mr. Ashish Marbinang, Ms. Latha R.
Nair and Mr. Sumit Rajput, Advs.
Versus
The Institute of Chartered Financial Analysts
Of India and Ors. ...Defendants
Through: Mr. Mukul Rohatgi, Sr. Adv., Mr.
Rajiv Nayyar, Sr. Adv. with Ms.
Pratibha M. Singh, Ms. Saya
Chowdhary and Ms. Archana
Sachdeva, Advs for D-1 & 2
Mr. C.S. Vaidyanathan, Sr. Adv. with
Kirtiman Singh, Adv. for D- 4 to 6
Mr. Gaurav Miglani, Adv. for D-3
Judgment decided on : 5th April, 2010
Coram:
HON'BLE MR. JUSTICE MANMOHAN SINGH
1. Whether the Reporters of local papers may
be allowed to see the judgment? Yes
2. To be referred to Reporter or not? Yes
3. Whether the judgment should be reported
in the Digest? Yes
MANMOHAN SINGH, J.
1. This order shall decide three applications being IA No. 14353/2008 and IA No. 14354/2008 filed under Order VII Rule 11 of the Code of Civil Procedure, 1908 (hereinafter referred to as „the CPC) by defendant nos. 4 to 6 and defendant no. 3 respectively for rejection of CS(OS) No.210/2004 Page 1 of 59 the plaint and IA No. 1865/2009 filed by defendant nos. 1 and 2 under Order XXXIX Rule 4 read with Section 151 of the CPC for vacation of the interim injunction granted by this Court vide order dated 04.08.2006.
2. The present suit was filed seeking mandatory injunction restraining the defendants from using the plaintiff‟s trademarks CFA, CHARTERED FINANCIAL ANALYST etc., passing off and rendition of accounts.
3. Vide order dated 04.08.2006, this Court granted an injunction whereby the original defendant nos. 1 and 2 were restrained from using the trade marks/service marks "CFA, Chartered Financial Analysts of India, ICFA and ICFAI". The said injunction was to become operative after the end of the then current academic session. The relevant portion of the interim order dated 04.08.2006 reads as under :
"In view of above, I allow the application under Order XXXIX Rules 1 & 2 CPC and restrain the Defendants, during the pendency of the suit, from using any of the trademarks or service marks CFA, Chartered Financial Analyst, The Institute of Chartered Financial Analysts of India, ICFA and ICFAI or any other name or mark which may be identical or deceptively similar to these marks and from passing off their programmes or business as that of the Plaintiffs. However, this order of injunction will not come into effect till the end of current academic session of the CFA programme run by the Defendants. Nor will anything said herein will mean final expression of opinion of this Court."
4. Subsequent to the passing of the order dated 04.08.2006, an application (IA No.9950/2007) under Order 1 Rule 10 with Order 6 Rule 17 CPC was moved by the plaintiff in order to implead certain Universities (Tripura, Meghalaya, Mizoram and Dehradun) sponsored CS(OS) No.210/2004 Page 2 of 59 by the defendant No.1, as necessary parties to the present suit.
5. The reason given by the plaintiff for the purpose of amendments/impleadment of universities sponsored by the original defendants owes its origin to an application filed by the original defendants filed as IA No. 1589/2005 in which the original defendants in the midst of arguments on the plaintiff‟s application under Order XXXIX Rules 1 and 2 of the CPC being IA No. 11547/2004 claimed that their group had grown with the addition of various institutes including their sponsored universities which have been newly impleaded.
6. The following is the justification given by the plaintiff in para 11 of the amended Plaint for impleadment of defendant nos. 3 to 6:
"Defendant Nos. 3-6 are the universities established, sponsored and controlled by Defendant No.1 and permitted under a purported license of Defendant No.1 to use the impugned trade mark/trade name CFA, ICFAI, INSTITUTE OF CHARTERED FINANCIAL ANALYSTS. In this connection, the Plaintiff wishes to submit that :
a) Defendant No.1 has made an application for the mark "ICFAI UNIVERSITY" as a trade mark before the Registrar of Trade Marks, claiming itself to be the owner of the mark in question.
b) The brochure published by Defendant No.1 for its various programmes contains a disclosure statement to the effect that these universities are sponsored, controlled and established by Defendant No.1 and that their use of the trade mark/trade name in their respective names is under license of the said Defendant.
c) Various statues enacted at the instance of Defendant No.1 for establishment of the proposed respondents as private universities acknowledge the role of Defendant No.1 in creation, administration and management of these proposed respondents.
d) The Defendant No.1 has been operating a website www.icfai.org which features a link to the "ICFAI UNIVERSITY", describing the various universities CS(OS) No.210/2004 Page 3 of 59 sponsored by Defendant No.1, namely Defendant Nos.3-6 to herein.
e) The prospectus for the impugned CFA program offered by the ICFAI University, Tripura (Defendant No.3 herein) in the Section headed "Remittance Information"
advises students to make the payment through credit cards at the respective branch offices of Defendant No.1 and in the Section "Admission Policies" requires the applicants to pay a fee to "ICFAI common fund", a fund managed by and for the benefit of Defendant No.1.
f) The Defendant No.1 and Defendant No.3 have been acting in collusion with each other to the detriment and grave prejudice of the Plaintiff‟s business and activities under its CFA designation.
7. The aforesaid application of the plaintiff was allowed by this Court vide order dated 05.08.2008.
8. In view of the above said, the plaintiff was also allowed to amend the following paras as per the amended plaint :
"42. The Plaintiff further says and submits that it has a cause of action against Defendants No.3-6 because the Statutes whereunder these have been created, the brochure and other materials published by Defendant No.1 and other acts taken by these Defendants in collusion and nexus with Defendant No.1 fully demonstrate that they have been acting at the behest and instigation of Defendant No.1 herein. The cause of action is continuing and will continue till the Defendant Nos.3 to 6 and are injuncted by this Hon‟ble Court from using the impugned marks CFA and CHARTERED FINANCIAL ANALYST as part of their trading style and as the name of their course.
43................................................................................. ..................................................................................... Further, this Hon‟ble Court has the territorial jurisdiction to entertain and try the present suit against the Defendant Nos.3- 6 because :
a) the examination for the impugned CFA Program offered by the Defendant No.3 are held at various test centres in India including one in New Delhi;
b) the advertisement relating to the impugned CFA programme offered by Defendant No.3 have been published and regularly appearing in various newspapers published and circulated in New Delhi;
c) the brochure and other information relating to the Defendants and the various courses offered by them including CS(OS) No.210/2004 Page 4 of 59 the impugned CFA programme are available on the website www.icfai.org operated and owned by Defendant No.1 and these are accessible to and downloadable by the students/candidates in New Delhi;
d) the prospectus for Defendant No.3 under the heading "Remittance Information" provides information for on-line facility for filling in the applications and making payment through the internet by logging on the website www.icai.org. Further, the various branch offices of Defendant No.1 are indicated as the centers available to renders assistance to the students equipped to accept the completed application forms, fee and confirm spot admission, supply all courseware, facilitate downloading admit cards, sale of all publications of Icfai University Press including journals, magazines and books.
45........................................................................... ............................................................................... (aaa) An order of mandatory injunction be granted against the Defendants both jointly and severally, directing them to take all appropriate steps to change their respective names including those of Defendant Nos.3 to 6 by deleting the element "ICFAI" and the expression "Institute of Chartered Financial Analyst" there from and to take all steps to amend the various statues whereunder these Defendants has been created including their nomenclature as to remove all references therein to the trademarks, service marks and/of trade name CFA, C.F.A., CHARTERED FINANCIAL ANALYST, ICFA, INSTITUTE OF CHARTERED FINANCIAL ANAYLYSTS OF INDIA AND ICFAI."
9. The defendants herein preferred appeals being FAO(OS) Nos.415-416/2008 before a Division Bench of this Court. The said appeals were disposed off by the learned Division Bench vide its order dated 17.11.2008 in terms whereof the defendants No. 3 to 6were permitted, inter alia, to raise their objections regarding maintainability of the present suit qua them before the learned Single Judge.
10. Pursuant to the aforesaid order dated 17.11.2008 passed by the learned Division Bench, the defendants No. 3 to 6 moved applications (being IA Nos.14353/2008 and 14354/2008) under Order VII Rule 11 wherein the maintainability of the present suit qua them CS(OS) No.210/2004 Page 5 of 59 was challenged.
11. It is pertinent to mention that while deciding the application under Order VI Rule 17 read with Order I Rule 10, similar submissions of the defendant nos. 3 to 6 were also made and the same were recorded in paras 12, 13 and 18 of the order dated 05.08.2008 passed by this Court.
12. The main contentions as raised by the defendants No.3 to 6 in the aforesaid applications in respect of the maintainability of the present suit are as under :
(i) That a bare reading of the plaint as amended by the plaintiff would reveal that the same does not disclose any cause of action whatsoever qua the defendants and thus the plaint is liable to be rejected. The plaint is also stated to be barred by law and barred by limitation as well.
(ii) That the defendants are creatures of Statutes which have been enacted by their respective competent State Legislatures therefore, the respective States are necessary parties to the suit and due to their non impleadment, the plaint is liable to be rejected.
(iii) That by way of the amended suit, a relief has now been sought for amending the Statutes pursuant to which the defendants have been constituted and such a prayer is not maintainable in light of settled principles of law.
(iv) The allegations that have been made by the plaintiff in the plaint pertains to the alleged collusion between the defendant CS(OS) No.210/2004 Page 6 of 59 No.1 (ICFAI) and defendant Nos.3 to 6, on account of which the concerned Legislations have been enacted and defendant Nos.3 to 6 have been established as Statutory Universities and it is not open to a party to challenge the validity of a statutory enactment on grounds of mala fide and collusion.
(v) The defendants are seeking the rejection of the plaint in its entirety and not in parts as objected by the plaintiff.
(vi) That ICFAI is merely the sponsor of the defendants and is not involved in their day to day functioning. The defendant nos. 3 to 6 are independent Statutory Authorities which are not under the control or supervision of ICFAI.
13. For the foregoing reasons, it is alleged by the defendants that the plaint is liable to be rejected since it does not disclose any „cause of action‟ against the defendants on the following points:
(i) That the failure of the plaintiff to even make the necessary pleadings in the plaint qua the Statutes under which the defendants have been constituted clearly disentitles the plaintiff for the consideration of any relief.
(ii) The plaintiff‟s failure to make even the necessary averments against the defendants clearly establishes that there exists no "cause of action" in favour of the plaintiff.
(iii) The Courts have held time and again that if on a meaningful reading of the plaint it is manifestly clear that the suit is meritless it can be dismissed under the provisions of Order VII Rule 11. ("T. Arivandandam Vs. CS(OS) No.210/2004 Page 7 of 59 T.V. Satyapal & Anr." (1997) 4 SCC 467 at para 5 and "Azhar Hussain v. Rajiv Gandhi" 1986 (Suppl) SCC 315 at para 12.)
14. It is also submitted by Sh. Vaidyanathan, learned Senior Counsel for Defendant Nos. 4 to 6 that the plaintiff has failed to implead the respective States as necessary parties in view of the fact that the defendants are creatures of Statutes which have been enacted by competent State Legislatures. Admittedly, the defendants in their own capacity have no jurisdiction, authority or competence to amend in any manner whatsoever the Statutes/Acts by which they have been established. The jurisdiction of the Courts extends only to determination of the validity of a statute.
15. The defendants have brought to the notice of this Court that by way of the present suit a relief has now been sought by the plaintiff for amending the statutes pursuant to which the defendants have been constituted.
16. The defendants have argued that it is not within the domain of the Courts to either direct the Legislature to make a law or to amend any existing law (Suresh Seth Vs. Commr. Indore Municipal Corporation and Ors., (2005) 13 SCC 287 and Municipal Committee Patiala Vs. Model Town Resident Association & Ors., (2007) 8 SCC
669).
17. It is submitted by the defendants that the process for establishment of the Universities had started much prior to the CS(OS) No.210/2004 Page 8 of 59 injunction order and some of the Universities were in fact already in existence even when the order dated 04.08.2006 was passed. The Courts have time and again held that the grounds on which a Statute may be impugned are only two namely:
(i) Lack of legislative competence of the Legislature enacting the law.
(ii) Violation of any Fundamental Right guaranteed in Part III of the Constitution or any other constitutional provision.
18. The next submission of the defendants is that a challenge to Legislation on the ground of mala fides is not maintainable and deserves to be rejected at the threshold. The defendants are independent Statutory Authorities that have been duly established by their respective State Legislatures. ICFAI is merely the sponsor of the said universities and is not involved in the day to day functioning and administration of the same. ICFAI does not enjoy any control or supervisory power over the defendants.
19. The original defendants have been created for setting up of autonomous bodies in order to run and control the working of the defendants No.3 to 6. Further, no license agreement was ever executed between defendant no. 1 and the defendant nos. 3 to 6. Courts have time and again held that the question of repugnancy under Article 254 arises only when a law made by the Parliament and a law made by the State Legislature occupy the same field with respect to one of the matters enumerated in the Concurrent List.
CS(OS) No.210/2004 Page 9 of 59
20. In its reply to both the applications for rejection of plaint, the plaintiff has submitted that it has a valid cause of action against defendant nos. 3 to 6 and that its plaint is not barred by any law. The said defendants are linked inextricably to defendant no. 1 insofar as they are using the trademarks injuncted against because defendant no. 1 has licensed them and they are under the sponsorship and control of defendant no. 1 and the right of the plaintiff to seek an injunction against the defendant nos. 3 to 6 cannot be defeated by the defendant No.1‟s sponsoring acts of converting its institutes into universities.
21. Learned counsel for the plaintiff has referred order dated 04.08.2006 wherein it was observed that the right of the plaintiff to seek an injunction against the defendants cannot be defeated by the original defendants‟ sponsoring acts of converting their institutes into universities. The relevant extract from the order is as follows:
"A very interesting feature of the developments that take place subsequent to the withdrawal of the license and during the pendency of the suit is the establishment of certain universities by state legislatures. The ICFAI University Act of 2003 of Uttaranchal in its Preamble says "An Act to establish and incorporate an university I the state, with emphasis on providing high quality and industry relevant education in the areas of Applied Financial Management, General Management, Applied Science & Technology, sponsored by the Institute of Chartered Financial Analysts of India (ICFAI), Hyderabad, Andhra Pradesh and to provide for matters connected therewith or incidental thereto." Similar legislations are passed by the states of Sikkim and Tripura. The Act of Sikkim also acknowledges the role of Institute of Chartered Financial Analysts of India (ICFAI), Hyderabad in sponsoring the legislation. Mr. Sudhir Chandra submits that it is not possible to injunct a legislature from using any particular „term‟ in its legislation or to declare that the name of ICFAI University is not permissible in law. Nonetheless, it is true that all the universities have been created during the CS(OS) No.210/2004 Page 10 of 59 pendency of the suit. The Defendants have been able to go ahead and sponsor the Acts. This will not, however, creates a right in them to violate the trade marks of the Plaintiffs. Their rights to use the trade marks came to an end in 1997. If they have gone ahead to obtain legislative sanctions to their trade marks, they have done so at their own peril. The rights of the Plaintiffs cannot be defeated by the act of the Defendants during the pendency of the suit. For the present, the attention of the court can be confined to the averments in the plaint and the rights claimed by the Plaintiffs against the Defendants. It is for the Plaintiffs to decide if and when the Plaintiffs could seek redressal of their grievance against those legislations. The Plaintiffs have been able to establish that they are entitled to an injunction. This right cannot be defeated by the Defendants sponsoring Acts to convert their institute into universities."
22. In support of his submissions Mr. Sanjay Jain, learned Senior counsel for the plaintiff has referred replies, documents and various provisions of statutes pertaining to the Universities/ defendant Nos. 3 to
6. The details of the same are given in paras 26 to 31 of this order.
23. It is averred that defendant No.1‟s own brochure states that the universities are the licensees of the marks ICFAI etc. attached hereto and an extract from the said brochure is reproduced hereinbelow :
"the ICFAI University represents the multi state network of universities, sponsored by the Institute of Chartered Financial Analysts of India under specific University Acts in Uttaranchal, Tripura, Sikkim, Meghalaya, Mizoram and Nagaland under respective legislations. The Governments of Rajasthan and Chhattisgarh issued letters of intent to the Institute for the establishment of universities........ .............The Institute, a non-profit society established under the A.P. (Telangana Area) Public Societies, Act 1350 F(Act 1 of 1350), is the sponsor of the University and also the owner of the branch offices, trademarks, service marks and trade names like ICFAI, etc. The University is a licensed user of these trademarks, service marks and names."
24. Mr. Jain has submitted that the defendant no.1 is alleged to have administrative, financial and other control over the newly CS(OS) No.210/2004 Page 11 of 59 impleaded defendants. All the statutes are substantially similar and have been drafted and submitted to the respective state governments on the basis of the original proposals submitted by the original defendant No.1. A copy of one statute pertaining to the defendant No.3, ICFAI University Tripura is filed.
25. Learned counsel has referred the provisions of the said statute showing extensive control and supervision of the original defendant No.1 over the functioning of the said university are reproduced as follows:
i) S. 2(1) "Sponsor‟ means the Institute of Chartered Financial Analysts of India which is registered as a Society under the Andhra Pradesh (Telangana Area) Public Societies Act, 1350 Fasli (Act 1 of 1350) at Hyderabad, Andhra Pradesh (Registration No. 1602 dated 20th October 1984)
ii) S. 2(1)(xxiv) „Statues‟ means the Statues of the University
iii) S. 2(1) (xxvii):- "The CFA Charter and Designation" means the Chartered Financial Analyst Charter and Designation, conferred by the University or by an agency duly authorized upon the successful candidates of the Chartered Financial Analyst (CFA) Program administered by the University or by an agency duly authorized by the University.
iv) S. 2(1)(xxix):- "The Council for Chartered Financial Analysts" means the Society which is registered under the Andhra Pradesh (Telangana Area) Public Societies Registration act, 1350 ... at Hyderabad, Andhra Pradesh.
v) S.3 (1) The Sponsor shall have the right to establish the University in accordance with the provisions of this Act.
vi) (2) An application containing the proposal to establish a University shall be made to the State Government by the Sponsor The proposal may contain the following particulars, namely:
(a) The objects of the University along with the details of the Sponsor CS(OS) No.210/2004 Page 12 of 59 .............
(k) The years of experience and expertise in the concerned discipline at the command of the Sponsor as well as the financial resources
vii) S.4 (1):- Where the State Government, after such inquiry as it may deem necessary is satisfied that the Sponsor has fulfilled the conditions specified in sub-section (2) of Section 3, it may direct the Sponsor to establish an Endowment Fund
viii) S. 7 :- The objectives for which the University is established as follows:
(a) To provide instruction, teaching, training and research in specialized fields of Finance and Management including Financial Analysis (leading to the CFA Charter and Designation), .........
..........
(e) To collaborate with .........including the Council of Chartered Financial Analysts in India or abroad...
ix) S.8:- Subject to other provisions of this Act the statutes or rules made there under or any other relevant laws for the time being in force or any other relevant laws for the time being in force, the University shall have the following powers, namely....
(c) To confer degrees, diplomas, charters, certificates or other academic distinctions and professional designations including CFA Charter or designation .... In the manner and conditions laid down in the statutes.
x) S.13 (1):- The Sponsor shall, with the prior approval of the Visitor appoint a person suitable to be appointed as the Chancellor of the University
xi) S.20 (1):- The Board of Governors shall consist of the following:
(a) The Chancellor
(b) The Vice-Chancellor
(c) Three persons nominated by the Sponsor
(d) .......
xii) S.21 (1):- The Board of Management shall consist of :
(a) The Vice-Chancellor
(b) The Registrar
CS(OS) No.210/2004 Page 13 of 59
(c) Three persons nominated by the
Sponsor
xiii) S.27 (1):- The first Statutes framed by the Board
of Governors shall be submitted to the State
Government for its approval, which may, within 3 months from the date of receipt of the Statutes give its approval with or without modifications.
xiv) S.27(2):- Where the State Government fails to take any decision with respect to the approval of the Statutes within the period specified under sub-
section (1) it shall be deemed to have been approved by the State Government.
xv) S.28 :- The Board of Governors may with prior approval of the state government make new or additional statutes or amend or repeal the statutes xvi) S.40:- The Sponsor/ University shall establish an Endowment Fund of at least Rupees Fifty Lakhs xvii) S.41(1):- The University shall establish a general fund to which the following amount shall be credited, namely ............
(c) all contributions made by the Sponsor xviii) S.42 (1):- The University shall also establish a Development Fund to which the following funds shall be credited, namely, ......
(d) all contributions made by the Sponsor
(e) all incomes received from the Endowment Fund xix) S.47 (1) Dissolution of University:- (1) If the Sponsor proposes dissolution of the University in accordance with the law governing its constitution or incorporation, it shall give at least three months notice in writing to the State Government.
..........
xx) (3) The manner of winding up of the University would be such as may be prescribed by the State Government in this behalf. Provided that no such action will be initiated without affording a reasonable opportunity to show cause to the Sponsor.
26. He argues that the composition of the officers of the newly added defendants No.3 to 6 is available on the respective websites of the defendant universities. Extracts from these websites have been placed CS(OS) No.210/2004 Page 14 of 59 on record by the plaintiff. A perusal of the details of the officers shows that Mr. Subhash Sarnikar, the Chairman of the Board of Governors of defendant No.1 is himself the Chancellor of these Universities. The fact that the Chancellor appointed by defendant No.1 to serve these defendant universities is none other than the Chairman of its own Board of Governors shows the extent of the administrative control exercised by the defendant No.1 over the affairs of the defendant Universities.
27. Further he relied upon a copy of the Annual report of the newly impleaded defendant No.6 downloaded from the internet which shows that the defendant No.1 has spent a huge sum of money to purchase land for defendant No.6. The defendant No.1 continues to sponsor new universities and in connection therewith, acquire land for such purpose.
28. According to Mr. Jain, the UGC approval granted to the defendant No.3 clearly states that defendant No.1 is the sponsor of this university and that there shall be no funding from the state government.
29. In order to buttress his submission, Mr. Jain has referred the case of DDA Vs. Skipper Construction Company, AIR 1996 SC 2005 wherein the Supreme Court held that the fact that an individual and members of his family have created several corporate bodies would not prevent the court from treating all of them as one entity belonging to and controlled by that individual and from finding that these corporate bodies are merely cloaks behind which lurks that individual and/or members of his family and that the device of incorporation was really a ploy adopted for committing illegalities and/or to defraud people. CS(OS) No.210/2004 Page 15 of 59
30. Mr. Jain has argued that in a similar fashion the defendant No.1 is the creator, originator and founder of the newly impleaded defendant universities and these universities are the brain behind the defendant No.1. It has also been brought to my notice that contempt actions filed in Gauhati by the employees of the defendant No.1 on behalf of one of the newly impleaded defendants, namely, the ICFAI University Tripura, and the same were withdrawn by defendant no. 3 after the plaintiff showed the nexus between these employees and the defendant No.3 by way of its counter affidavit in the said contempt petitions.
31. Lastly he referred the contempt proceedings initiated by the plaintiff against the defendant No.1 in the United States of America, the Virginia Court was pleased to allow these proceedings on 30th March, 2009. The following observations from the judgment are noteworthy in that they demonstrate a judicial determination on the control exercised by defendant No.1 over the universities. These read as under:
"Defendant‟s arguments are unpersuasive. To begin for the reasons discussed......., the unequivocal language of the 1998 order did not limit itself to Defendant‟s CFA program. Next, although Defendant claims it exerts no control over ICFAI University, Defendant lists ICFAI University as one of its "constituent units" - units Defendant refers to interchangeably in its prospectus. Moreover, ICFAI University has the same physical address as Defendant.... ICFAI University officials have the same email address suffix as Defendant‟s employees, Defendant filed the application with the PTO for the mark "ICFAI University", Defendant contacted IANT in order to provide exams I the US for ICFAI University students, Defendant paid IANT for conducting exams on behalf of ICFAI University, and ICFAI University students sign an enrolment agreement directly with Defendant. This evidence belies any notion that Defendant exerts no control over - or, at the very least, CS(OS) No.210/2004 Page 16 of 59 has not acted in concert with - ICFAI University as this provision of the injunction was repeatedly violated."
32. In rejoinder submissions, Sh. Vaidyanathan, learned Senior Counsel for the Defendant Nos. 4 to 6 has further submitted that there is a fundamental distinction between an authority such as the Registrar of Companies and the Registrar of Trademarks and the Legislature of a State. The actions of such authorities can be challenged on numerous grounds whereas the actions of the Legislature can be challenged on very restricted and special grounds.
33. It is further argued by the defendants that admittedly the Trade Marks Act, 1999 has been enacted by the Parliament under Entry 49 of List I whereas the Statutes under which the defendants have been enacted by the respective State Legislatures are under Entry 32 of List II and Entry 25 of List III.
34. It is submitted by the defendants that the principle that a special Statute will prevail over a general Statute has no application in the present case in as much as whereas the Trade Marks Act deals with trademarks/service marks (i.e. intellectual property), the Statutes under which the defendants have been constituted deal with the constitution and incorporation of Universities (i.e. education). Thus, there is no question of any conflict between the two or as regards prevalence of one Statute over the other.
35. Learned counsel for the defendants referred to Common Causes Vs. Union of India & Ors., JT 2008 (4) SC 317 wherein the Supreme Court held that it cannot give directions of a legislative or CS(OS) No.210/2004 Page 17 of 59 executive nature as it would not be proper for the judiciary to encroach upon such matters which lie outside its domain.
36. While contending that there are only two grounds on the basis of which a statute may be impugned/ interfered with and there may not be any third ground warranting such action, learned counsel for the defendants has referred to State of A.P. Vs. McDowell & Co., (1996) 3 SCC 709, the relevant portion whereof is reproduced as under :
"43. .....The power of Parliament or for that matter, the State Legislatures is restricted in two ways. A law made by Parliament or the legislature can be struck down by courts on two grounds and two grounds alone, viz., (1) lack of legislative competence and (2) violation of any of the fundamental rights guaranteed in Part III of the Constitution or of any other constitutional provision. There is no third ground. ................ An enactment cannot be struck down on the ground that court thinks it unjustified. Parliament and the legislatures, composed as they are of the representatives of the people, are supposed to know and be aware of the needs of the people and what is good and bad for them. The court cannot sit in judgment over their wisdom. In this connection, it should be remembered that even in the case of administrative action, the scope of judicial review is limited to three grounds, viz., (i) unreasonableness, which can more appropriately be called irrationality, (ii) illegality and (iii) procedural impropriety...."
37. Challenge to the validity of a statute must be pleaded and clearly laid out in the grounds of the pleadings and if not, the same must be rejected in limine. Counsel referred to State of Haryana Vs. State of Punjab,(2004) 12 SCC 673 wherein it was observed as under :
"82. It is well established that constitutional invalidity (presumably that is what Punjab means when it uses the word "unsustainable") of a statutory provision can be made either on the basis of legislative incompetence or because the statute is otherwise violative of the provisions of the Constitution. .... Furthermore, merely saying that a CS(OS) No.210/2004 Page 18 of 59 particular provision is legislatively incompetent [ground
(ii)] or discriminatory [ground (iii)] will not do. At least prima facie acceptable grounds in support have to be pleaded to sustain the challenge. In the absence of any such pleading the challenge to the constitutional validity of a statute or statutory provision is liable to be rejected in limine."
Various other decisions have been referred by the learned counsel for the defendant nos. 3 to 6 which are on the same principle.
38. I have gone through the rival contentions of the parties on the aspect of maintainability of the suit against Defendant no. 3 to 6. It is pertinent to mention that the grievance of the plaintiff against the defendants is to restrain them from using the trade marks in question and the plaintiff is not per se impugning any piece of legislation either passed by the Central Government or any State Government. The prayer made in the suit is thus consequential in nature in as much as that once the defendants are restrained from using the marks, they shall also be directed to take the necessary steps seeking amendments in the relevant statutes. The corollary drawn by the defendants that it will tantamount to directing the Legislature to make or amend laws would be enlarging the dispute which the court is not concerned with.
39. No doubt, it is a settled law that the court may not direct the Legislature to amend the laws. But, in this case, the situation contemplated by the defendants does not arise. There is no challenge as such to the legislations under which these universities are passed. The defendants by stating that they are helpless to seek any steps for change of name as the university is formed by an act of the State Legislature is CS(OS) No.210/2004 Page 19 of 59 trying to shift the burden on the State and attempting to be sheltered by it in order to misuse the trade mark. The States have at best recognized the universities by forming the Acts. It is the defendant nos. 1 and 2 who are the mastermind and the sponsors of the universities. The mark ICFAI has of course been permitted to be used by the defendants to the said universities.
40. No circumstances can give rise to an anomalous situation where the court will become powerless and remain a silent spectator only because some statutorily recognized university is formed and is misusing the trade mark which was earlier being misused privately. The said situation will not make any difference and will not give any immunity to the said university from the court.
41. Section 153 of the Trade Marks Act has a binding effect on the Government. Thus, even the Government is no exclusion when it comes to misuse of trade marks. This makes the contention of the defendants meritless. Again, the dispute is pertaining to the trade marks in the present matter (which were earlier used by the defendant no. 1 and 2 and thereafter extended later on to the defendant no. 3 to 6) and not the legislation per se. Thus, the question of impleadment of States as parties to the proceedings does not arise.
42. The contention of the plaintiff that the special law shall prevail over general law is equally apposite. The preamble of the trade mark law reads as under :
"An Act to amend and consolidate the law relating to trade marks, to provide for registration and better protection of trade marks for goods and services and for CS(OS) No.210/2004 Page 20 of 59 the prevention of the use of fraudulent marks. Moreover in view of developments in trading and commercial practices, increasing globalization of trade and industry, the need to encourage investment flows and transfer of technology and the need to simplify and harmonize trade mark management systems, it has been considered necessary to bring out a comprehensive legislation on the subject."
The trade mark law is a special act meant to protect trade marks from misuse and confusion and deception. The action taken in the special Act and remedies sought which are mentioned therein which otherwise are not in derogation to the general law are thus not barred unless the general law expressly or impliedly excludes the applicability of the said law. Thus, the trade mark dispute under the Trade Marks Act cannot be rendered redundant only because of the existence of State Acts recognizing the universities.
43. If the interpretation being advanced by the newly impleaded defendants was accepted, it would arm all private Universities created under State Acts with a claim of immunity from the Trade Marks Act, 1999 concerned with the protection of trademarks and trade names. Further, defendant No. 1 was aware of the pendency of the present suit at the time of sponsoring/ advancing the trade name/trade marks under dispute to the Universities and the state governments concerned and even some of the States, the defendant no. 1 has sponsored the trade mark and name after passing of the interim order.
44. Learned counsel for the plaintiff in support of his submission has referred various judicial precedents and submitted that the nomenclature of the application/petition is immaterial and only the substance of the same is to be seen. He further submits that in case the CS(OS) No.210/2004 Page 21 of 59 interim order is granted against defendants No.3 to 6, there would be no inconvenience or bar to the States as only directions are to be given to the Universities to change their respective names. He has referred various case laws in this regard which read as under :
(i) State of West Bengal Vs. Kesoram Industries Ltd. & Ors., (2004) 10 SCC 201 "31(5). Where the legislative competence of the legislature of any State is questioned on the ground that it encroaches upon the legislative competence of Parliament to enact a law, the question where the legislative competence of the legislature of any State is questioned on the ground that it encroaches upon the legislative competence of Parliament to enact a law, the question one has to ask is whether the legislation relates to any of the entries in List I or III. If it does, no further question need be asked and Parliament‟s legislative competence must be upheld. Where there are three lists containing a large number of entries, there is bound to be some overlapping among them. In such a situation the doctrine of pith and substance has to be applied to determine as to which entry does a given piece of legislation relate. Once it is so determined, any incidental trenching on the field reserved to the other legislature is of no consequence. The court has to look at the substance of the matter. The doctrine of pith and substance is sometimes expressed in terms of ascertaining the true character of legislation. The name given by the legislature to the legislation is immaterial. Regard must be had to the enactment as a whole, to its main objects and to the scope and effect of its provisions. Incidental and superficial encroachments are to be disregarded."
(ii) State of A.P. & Ors. Vs. McDowell & Co. & Ors., (1996) 3 SCC 709 "17. Part XI of the Constitution deals with relations between the Union and the States. Chapter I in this part bears the heading "Legislative Relations: Distribution of Legislative Powers". Clause (1) of Article 245 declares that "Subject to the provisions of this Constitution, Parliament may make laws for the whole or any part of the territory of Indian, and the Legislature CS(OS) No.210/2004 Page 22 of 59 of a State may make laws for the whole or any part of the State."
Clause (1) of Article 246 declares that "Notwithstanding anything contained in clauses (2) and (3), Parliament has exclusive power to make laws with respect to any of the matters enumerated in List I in the Seventh Schedule (in this Constitution referred to as the „Union List‟)."
Clause (2) of Article 246 declares that "Notwithstanding anything in clause (3), Parliament, and, subject to clause (1), the Legislature of any State also, have power to make laws with respect to any of the matters enumerated in List III in the Seventh Schedule (in this Constitution referred to as the „Concurrent List‟)."
Clause (3) of Article 246 then declars that "Subject to clauses (1) and (2), the Legislature of any State has exclusive power to make laws for such State or any part thereof with respect to any of the matters enumerated in List II in the Seventh Schedule (in this Constitution referred to as the „State List‟)."
Clause (4) says that "Parliament has power to make laws with respect to any matter for any part of the territory of India not included in a State notwithstanding that such matter is a matter enumerated in the State List."
Article 248 vests the residuary legislative power in the Union. Article 249 empowers Parliament to legislate with respect to a matter in the State List in national interest while Article 250 empowers Parliament to legislate with respect to any matter in the State List if a proclamation of emergency is in operation. Article 251 says that the provisions of Articles 249 and 250 do not restrict the power of the legislature to make any law which it is competent to make but if such law is repugnant to any of the provisions of the law made by parliament under the said articles, the law made by Parliament shall prevail so long only as the law made by Parliament continues to have effect. Article 252 empowers Parliament to legislate for two or more States by their consent. It also provides for adoption of such CS(OS) No.210/2004 Page 23 of 59 legislation by other States. Article 254 declares that if any provision of law made by the legislature of a State with respect to matters enumerated in the Concurrent List is inconsistent with the provisions of any law made by Parliament, whether made earlier to the State enactment of later, the State enactment shall to the extent of repugnancy be void. If, however, the State enactment is reserved for an receives the assent of the President, such law will prevail in that State notwithstanding its repugnancy with a Parliamentary enactment.
18. After considering the aforesaid provisions and the scheme of the Constitution, a nine-Judge Bench of this Court in S.R. Bommai v. Union of India has opined that within the sphere allotted to States, they are supreme.
19. It has been repeatedly pointed out by this Court and the Federal Court (dealing with a similar distribution of legislative powers among the Centre and the provinces under the Government of India Act, 1935) that the several entries in the three Lists in the Seventh Schedule are mere legislative heads and that it is quite likely that very often they overlap. Wherever such a situation arises, it is held, the issue must be solved by applying the rule of pith and substance. As explained by T.L. Venkatarama Ayyar, J. in A.S. Krishna v. State of Madras.
"............it must be remembered that we are construing a federal Constitution. It is of the a\essence of such a Constitution that there should be a distribution of the legislative powers of the Federation between the Centre and the Provinces. The scheme of distribution has varied with different Constitutions, but even when the Constitution enumerates elaborately the topics on which the Centre and the States could legislate, some overlapping of the fields of legislation is inevitable. The British North America Act, 1867, which established a federal Constitution for Canada, enumerated in Sections 91 and 92 the topics on which the Dominion and the Provinces could respectively legislate. Notwithstanding that the lists were framed so as to be fairly full and comprehensive, it was not long before it was found that the topics enumerated in the two sections overlapped, and the Privy Council had time and again to pass on the constitutionally of laws made by the Dominion and Provincial legislatures. It was in this situation that the Privy Council evolved the doctrine, that for deciding whether an impugned legislation was intra vires, regard must be had to its pith and substance. That is to say, if a statute is found in substance to relate to a topic within the competence of the legislature, it should be held to be intra vires, even though it might incidentally trench on topics not within its legislative competence. The extent of the encroachment on matters CS(OS) No.210/2004 Page 24 of 59 beyond its competence may be an element in determining whether the legislation is colourable, that is, whether in the guise of making a law on a matter within its competence, the legislature is, in truth, making a law on a subject beyond its competence. But where that is not the position, then the fact of encroachment does not affect the vires of the law even as regards the area of encroachment. Vide Citizens Insurance Co. of Canada vs. William Parsons; Attorney General for Ontario v. Attorney General for the Dominion of Canada; Attorney General of Ontario v. Attorney General for the Dominion; Union Colliery Co. of British Columbia v. Bryden; Attorney General for Canada v. Attorney General for Ontario; Attorney General for Alberta v. Attorney General for Canada; and Board of Trustees of Lethbridge Northern IrrigationDistt. V. Independent Order of Foresters."
(iii) Living Media India Limited Vs. Jitender V. Jain & Anr., 2002 (25) PTC 61 (Del) "7. The nature of enquiry under the PRB Act is for the purpose of approval of the name of a magazine or publication and as such it cannot have precedence over the provisions of the TMM Act which is a special enactment and was made for the purpose of governing disputes relating to names, titles or trade marks. This conclusion emanates from the comparison of the object of the aforesaid two Acts. The preamble of PRB Act shows that it was made for regulating printing presses and news for preservation of copies of every book and registration of such book, newspapers. Thus, the main concern of the Legislature was to enact a law would help in preservation of the copies of the books and newspapers.
8. The TMM Act was enacted to provide for the registration and better .....of trade marks and for the prevention of the use of fraudulent marks ...chandise."
(iv) KG Khosla Compressors Ltd. Vs. Khosla Extraktions Ltd. & Ors., AIR 2002 SC 117 "32. I cannot accept the argument of Mr. Sanghi that a person is entitled to carry on his business in his own name and that there could not be any restraint on that. This is in fact too general a proposition. Even S. 34 of the Trade and Merchandise Marks Act referred to by Mr. Sanghi protects a person of the bona fide use of his own name. However, this is not the case before me and I would say no more on CS(OS) No.210/2004 Page 25 of 59 this submission of Mr. Sanghi. The point that is at issue is if a person is entitled as of right to have a company registered in a name which happened to be his own name. I would say he has no such right. The right to incorporate a company in a particular name is a statutory right. S. 20 of the Act prescribes that no company shall be registered by a name, which in the opinion of the Central Govt., is undesirable. Sub-s. (2) of S. 20 says that if a name which is identical with or too nearly resembles the name by which a company in existence has been previously registered it may be deemed to be undesirable. I cannot read into S. 20 of the Act that whenever a person applies for registration of a company in his name or in the name of his family members it must be registered. This is not the law and could not be the law."
45. The defendant No.1 in the present case has not denied the fact that somehow defendant no.1 has connections with the Universities and now indirectly the same very defendant No.1 is claiming immunity from the process of the court in order to render redundant the interim order already passed against defendant nos. 1 and 2. These Universities have been sponsored and created by the defendant No.1. The administrative and financial control of these universities is in the hands of the defendant No.1 as per documents placed on record in relation to the following:-
- purchase of land for the campus by the main defendant;
- nominees of the defendant no.1 to sit on the board of governors of the universities;
- the universities being a purely private
university.
The universities are private entities with no participation of the State in their affairs. These are created by Acts of State Legislature CS(OS) No.210/2004 Page 26 of 59 and the same is not unique to the defendant Universities alone.
46. I shall now consider the aforesaid contentions for the purposes of the rejection of the plaint under Order VII Rule 11 CPC. The plaint is liable to be rejected if any of the grounds set out under Order VII Rule 11 are satisfied. The defendants‟ contention that the plaintiff‟s amended suit does not disclose cause of action against defendant no 3 to 6 is rejected. The argument advanced was that because of the existence of the State Acts, the cause of action is not disclosed in the plaint qua the States and hence there is no cause of action against the defendant no. 3 to 6. I am unable to accept the contention of the defendants that the plaint does not disclose any cause of action against the defendant no. 3 to 6. The success or the merit of the matter will not determine whether the plaint disclose a cause of action or not. It is the contention of the defendants that the plaintiff cannot seek such relief because of the intervening the State Acts. The said contention even if accepted does not mean that there is no cause of action in the plaint.
47. It is trite that there is a difference between the plaint not disclosing cause of action and the suit based upon a weak cause of action. At best, the contention of the defendants is that the cause of action of the plaintiff contended in the plaint is weak. However, that is not a ground for rejection of the plaint under Order VII Rule 11 CPC.
48. The next contention is that the suit is barred by law as there are State Acts regulating the defendant no. 3 to 6. It was further submitted that this court cannot direct the Legislature to amend the laws. Thus, the suit is barred by law. The said contention of the defendants CS(OS) No.210/2004 Page 27 of 59 cannot be accepted. There is no express or implied bar in the said Acts for maintaining a civil suit and in the absence of the same, it would not be appropriate to assume that the suit is barred merely by existence of the Acts. The applicability of special law over general law is another reason for arriving at the conclusion that the suit is not barred.
49. Further, the question of whether a plaint is barred by any law or is not maintainable due to want of cause of action can only be determined on the basis of a meaningful and close reading of the plaint. The defence of the defendants is not to be looked into at this stage (Mayar (H.K.) Ltd. Vs. Owners & Parties, Vessel M.V. Fortune Express, (2006) 3 SCC 100 and Manmohan Singhy Chawla Vs. Rajesh Berry & Anr., 2009 (3) AD (Delhi) 259).
50. The next submission of the defendants is that the plaint discloses no cause of action against the defendant nos. 3 to 6 and the Court has the power to reject the entire plaint against all defendants and not against a portion of them. Learned counsel for the defendants has referred the case of Mt. Phool Sundari Vs. Gurbans Singh & Ors., AIR 1957 Raj 97 wherein it has been held as under:
"9. We have given our earnest consideration to this matter and we do not see why where a plaint discloses no cause of action against some of the Defendants it cannot be rejected against those Defendants. We can understand that a plaint has to be rejected in toto in the sense that a Court cannot reject one part of the plaint against all the Defendants and carry on with the rest of the plaint against them, but we cannot understand why the Court cannot reject the entire plaint against a particular Defendant and carry on with the entire plaint against others.
In such a case, there is a total rejection of the plaint so far as a particular Defendant is concerned. There CS(OS) No.210/2004 Page 28 of 59 being such a total rejection of the plaint so far as the particular Defendant is concerned, we are of opinion that such an order would be open to appeal as a decree.
10. Assuming, however, that this is not so and that the plaint has to be rejected in toto in the sense that it must be rejected against all the Defendants and there remains nothing before the Court the rejection of the plaint against some Defendants would not be an order under Order 7, Rule 11 (a)."
51. Learned counsel for the plaintiff has, in turn, referred to various judgments as well. In Popat and Kotecha Property v. State Bank of India Staff Assn.,(2005) 7 SCC 510, the Court held as under :
"10. Clause (d) of Order 7 Rule 7 speaks of suit, as appears from the statement in the plaint to be barred by any law. Disputed questions cannot be decided at the time of considering an application filed under Order 7 Rule 11 CPC. Clause (d) of Rule 11 of Order 7 applies in those cases only where the statement made by the Plaintiff in the plaint, without any doubt or dispute shows that the suit is barred by any law in force.
19. There cannot be any compartmentalisation, dissection, segregation and inversions of the language of various paragraphs in the plaint. If such a course is adopted it would run counter to the cardinal canon of interpretation according to which a pleading has to be read as a whole to ascertain its true import. It is not permissible to cull out a sentence or a passage and to read it out of the context in isolation. Although it is the substance and not merely the form that has to be looked into, the pleading has to be construed as it stands without addition or subtraction of words or change of its apparent grammatical sense. The intention of the party concerned is to be gathered primarily from the tenor and terms of his pleadings taken as a whole. At the same time it should be borne in mind that no pedantic approach should be adopted to defeat justice on hair-splitting technicalities."
52. While discussing the effect of misjoinder of parties with regard to rejection of the plaint under Order VII Rule 11 of the CPC, the Supreme Court in Prem Lala Nahata v. Chandi Prasad Sikaria,(2007) 2 SCC 551 observed as follows :
CS(OS) No.210/2004 Page 29 of 59
"17. Thus, when one considers Order 7 Rule 11 of the Code with particular reference to clause (d), it is difficult to say that a suit which is bad for misjoinder of parties or misjoinder of causes of action, is a suit barred by any law. A procedural objection to the impleading of parties or to the joinder of causes of action or the frame of the suit, could be successfully urged only as a procedural objection which may enable the court either to permit the continuance of the suit as it is or to direct the Plaintiff or Plaintiffs to elect to proceed with a part of the suit or even to try the causes of action joined in the suit as separate suits.
18. ...... If there is power in the court to consolidate different suits on the basis that it should be desirable to make an order consolidating them or on the basis that some common questions of law or fact arise for decision in them, it cannot certainly be postulated that the trying of a suit defective for misjoinder of parties or causes of action is something that is barred by law. The power to consolidate recognised in the court obviously gives rise to the position that mere misjoinder of parties or causes of action is not something that creates an obstruction even at the threshold for the entertaining of the suit.
21. The legal position in an identical situation as ours has been considered by a learned Judge of that Court in Assembly of God Church v. Ivan Kapper. The learned Judge has held that a defect of misjoinder of parties and causes of action is a defect that can be waived and it is not such a one as to lead to the rejection of the plaint under Order 7 Rule 11(d) of the Code. As we see it, the said decision reflects the correct legal position."
53. There is no force in the submissions of the defendants that the plaint is barred by limitation. It is not stated in the application for rejection as to how the plaint is barred by limitation as it is the admitted case of the parties that some of the Universities are sponsored by the defendant no. 1 even after passing of the interim order, hence, the submission of the defendants is totally meritless and is rejected. In the absence of valid reason, it is settled law that the question of limitation is a mixed question of law and fact.
CS(OS) No.210/2004 Page 30 of 59
54. In C. Natrajan v. Ashim Bai,(2007) 14 SCC 183 it was held as under :
"8. An application for rejection of the plaint can be filed if the allegations made in the plaint even if given face value and taken to be correct in their entirety appear to be barred by any law. The question as to whether a suit is barred by limitation or not would, therefore, depend upon the facts and circumstances of each case. For the said purpose, only the averments made in the plaint are relevant. At this stage, the court would not be entitled to consider the case of the defence. (See Popat and Kotecha Property v. SBI Staff Assn.)"
55. There is also no merit in the submission of the defendants that the States are necessary parties and there are no pleadings against the defendants. When the amended plaint, particularly paragraph 11, is read carefully, there are clear pleadings against the defendants. As regards the objection as to whether the States are necessary parties or not, the issues in the matter are yet to be framed and the same cannot be determined at this stage.
56. In the present case, the defendant No.1 itself has filed trademark applications for the marks "ICFAI UNIVERSITY" and "ICFAI UNIVERSITY PRESS". The ownership of the trademark is claimed by the defendant No.1 and lent by it to all the entities created and established by it including the newly impleaded defendants.
57. Defendant No.1‟s own brochure states that the universities are the licensees of the marks in so far as the brochure of defendant No.1 (ICFAI) mentions that "the ICFAI University represents the multi state network of universities, sponsored by the Institute of Chartered CS(OS) No.210/2004 Page 31 of 59 Financial Analysts of India under specific University Acts in Uttaranchal, Tripura, Sikkim, Meghalaya, Mizoram, and Nagaland under respective legislations. The Governments of Rajasthan and Chhattisgarh issued letters of intent to the Institute for the establishment of universities...............
..................The Institute, a non-profit society established under the A.P. (Telangana Area) Public Societies, Act 1350 F (Act 1 of 1350 F), is the sponsor of the University and also the owner of the branch offices, trademarks, service marks and trade names like ICFAI, etc. The University is a licensed user of these trademarks, service marks and trade names."
58. It appears prima facie that defendant no.1 has administrative, financial and supervisory control over the newly impleaded defendants. All the statutes under which defendant Nos. 3 to 6 have been created are substantially similar and have been drafted on the basis of the original proposals submitted by the defendant No.1.
59. The submission of Mr. Sanjay Jain, learned Senior counsel is correct that even before filing of the present suit, the defendant No.1 had been aware of the trademark rights of the plaintiff in the disputed marks and, pending hearing and final disposal of the suit, while sponsoring the name „ICFAI‟ for its Universities, apart from taking risk at its own peril even after passing of the interim order, the defendant No.1 misled the State governments and as such cannot claim shelter under the University Acts for perpetuating its wrongful acts and claiming immunity.
60. Mr. Jain is right in his submission that the ambit of Order VII CS(OS) No.210/2004 Page 32 of 59 Rule 11 (d) contemplates a bar enacted by law. In fact, the University Acts relied upon by the newly impleaded defendants do provide for their respective boards of governors vested with powers to amend these Acts under various provisions.
61. Having considered all the aspects of the matter and keeping in mind the law on the subject and the circumstances of the present case, the applications for rejection of plaint cannot be allowed as a reading of the plaint shows that cause of action does subsist against the defendant nos. 3 to 6. Both the applications are false and frivolous and the same are dismissed.
62. No costs.
I.A. No. 1865/2009
63. I shall now proceed to discuss the contentions of the parties as regards IA No. 1865/2009 i.e. application for vacation of interim order dated 04.08.2006 due to development of subsequent events which have brought about a change in the circumstances and situation of the parties.
64. A perusal of the record indicates that the Defendant nos.1 and 2 filed an appeal being FAO(OS) No. 517/06 against the order dated 04.08.2006 passed in Plaintiff‟s application under Order XXXIX Rule 1&2. The appeals were admitted for regular hearing. As regards the interim stay is concerned the prayer as made in CM No. 10798/08 was rejected by the Division Bench of this Court on 25.08.2008.
65. Another CM No. 1050/09 for stay was filed by the Defendant Nos. 1 and 2 in FAO(OS) No. 517/06 which was also CS(OS) No.210/2004 Page 33 of 59 dismissed by the Division Bench vide order dated 23.01.2009 with the direction that it would be appropriate for the Defendants to move the learned Single Judge under Order XXXIX Rule 4 rather to move an application before this Court. The said application was withdrawn by the Defendant Nos. 1 and 2 with liberty to move the same before the Learned Single Judge.
66. In view of the said order, the present application being I.A. No. 1865/2009 has been filed by the Defendants under Order XXXIX Rule 4 of Code of Civil Procedure for vacation of the interim order on the basis of subsequent developments. The details of the subsequent developments enumerated in the application are given as under:
1. Issuance of Trademark Certificates in favour of ICFAI, Hyderabad in India.
2. Cancellation of the Trademark Certificate issued in favour of the Plaintiff in India.
3. Issuance of Trademark Certificates in favour of ICFAI, Hyderabad outside India.
4. Rejection of the Plaintiff‟s application for registration of „Chartered Financial Analyst‟ as a trademark in the United Kingdom/
5. Refusal of grant of ad interim injunction in favour of the Plaintiff by the High Court of Colombo.CS(OS) No.210/2004 Page 34 of 59
6. Evidence given by the Plaintiff‟s own witnesses in proceedings before the Courts in Virginia, USA.
7. Minutes of Meeting not valid License Agreement.
67. The Plaintiff opposed the application filed by the Defendant No.1 and 2 on various grounds. It is argued that the ground made in the application cannot be considered as a subsequent event as almost all the events were available with the Court when the Plaintiff‟s application under Order XXXIX Rule 1 and 2 was decided on merit after hearing the parties. The submission of the Plaintiff is that there is not any change of circumstances, therefore, the application is not maintainable, and is liable to be dismissed. The next contention of the Plaintiff is that a party seeking the vacation of interim injunction must show bona fides, good faith and honest conduct while approaching the court. Further contention of the Plaintiff is that the Defendant No.1 has deliberately and intentionally taken a number of steps to bypass and evade the effect of interim order dated 04.08.2006. The Plaintiff has given various instances to prove its point, details whereof are given as under:
a) the Defendant No.1 after passing off the interim order dated 04.08.2006 has been filing trademark applications on its own or through its affiliated entities, asserting ownership right in the CFA marks on deceptive variations thereof despite of interim injunction Order dated 04.08.2006.CS(OS) No.210/2004 Page 35 of 59
b) the Defendant No.1 continues to lend its injuncted name ICFAI and the CFA marks to universities sponsored and created by the Defendant No.1.
c) In January, 2007, the Defendant No.1 through its sponsored University in Tripura issued an advertisement in number of leading newspapers under the name „The ICFAI University, Tripura, offering admissions to the CFA program. The Plaintiffs thereafter issued the caution notice in this respect informing the public at large that the Defendant No.1 and its affiliates are no longer authorized to offer CFA programme.
d) In March, 2007, the Defendant No.1 and 3 filed a writ in Gauhati, seeking a direction to the All India Council for Technical Education to take action against the Plaintiff.
e) In April, 2007, the Defendant No.1 filed a Criminal Defamation case at Kolkata against the officers of the Plaintiff and its member society in India on the ground that its caution notice of February 12, 2007 had defamed the Defendant No.1. The contempt proceedings in Gauhati High Court initiated by the Defendant No.1 and 3 against the Plaintiff.
f) In August, 2007 another Criminal Defamation case was filed by the Defendant No.1 in Banglore against officers of the Plaintiff and its member society in India.
68. As per Plaintiff, facing with the said situation the Plaintiff in August, 2007 filed CCP No. 40/2007 in this Court for disobedience of CS(OS) No.210/2004 Page 36 of 59 order dated 04.08.2006 by Defendant No.2. The Plaintiff has also alleged that on February 6, 2008, the Division Bench hearing the appeal filed by Defendant Nos. 1 and 2 passed direction to Defendants to seek an adjournment in Criminal Defamation case in Calcutta however, the Defendants pressed for fresh summons against the Plaintiff‟s principal officers when the defamation case was taken up by the Magistrate in Calcutta in February, 2008. On May 7, 2009, internet news stated that the Defendant No. 1 was to invest Rs. 150 crores to set up a university in the State of Orissa. The said news item stated that the said Defendant had identified 30 acres of land in Orissa for its university project.
69. It is settled law that the application under Order XXXIX Rule 4 for vacation of order is only maintainable in case subsequent events have taken place during the pendency of the application otherwise normally, where the court has granted an interim order after hearing both the parties, the order cannot be vacated/varied in the same proceeding except when necessitated by change in circumstances or by undue hardship to a party. In the present case, this Court has to examine the above-mentioned issue as to whether the Defendant No.1 and 2 are able to make out a case of change in circumstances or not.
70. Now I shall deal with the subsequent developments as mentioned in the application filed by defendant nos.1 and 2 number wise:
(i) Issuance of Trademark Certificates in favour of ICFAI, Hyderabad in India.
It is submitted by defendant no.1 that he had CS(OS) No.210/2004 Page 37 of 59 applied for registration of trade marks „CFA logo‟, „CFA Programme‟ and „ ICFAI‟ under Class 16 in 1990. These trade marks were opposed by the Plaintiff. However, by order dated 22.09.2008, the Registrar of Trade Marks rejected these oppositions thereby making Defendant no. 1 the registered proprietor of the above-stated trade marks in Class 16 under Nos. 523513, 523515 and 523516.
Defendant no. 1 had also applied for registration of the trade mark „CFA‟ in Class 9 on 10.08.2004 and the same was granted in July 2006 vide registration No. 1301678. The order sought to be set aside i.e. order dated 04.08.2006 was reserved by the learned Single Judge on 26.04.2006 and the development of registration of the mark „CFA‟ in Class 9 therefore, is a subsequent one which could not have been brought to the Court‟s notice at that time.
71. The Plaintiff‟s contention is that once the injunction order was passed, the Defendants ought to have ceased filing new applications and also all activity as regards the pending applications. The Defendants cannot take advantage of their failure to act as per law and the goings-on in the Trademarks Registry. The issuance of the trademark certificate does not in any way merit the vacation of order dated 04.08.2006 as per the law laid down by the Supreme Court at various points in time, the said law being that (a) in a suit for passing off action, registration of trademark is irrelevant and the issue to be determined is who the prior user of the trademark is (Whirlpool case) and (b) non-user of the CS(OS) No.210/2004 Page 38 of 59 trademark in the territory of India is irrelevant if the user is the first in the world (Milmet case). It is also contended that registration had been mala fidely sought in 1990 by Defendant no. 1 as there was a subsisting relationship/ licensing agreement between the parties at that time. Further, the unbecoming conduct of Defendant no. 1 and the Trademarks Registry has been elucidated upon on pages 18-20 of the Plaintiff‟s submissions dated 17.06.2009.
72. No doubt the Defendant No. 1 has been able to obtain the registration of the trademarks bearing no. 523513, 523515 and 523516 from the Trademark Registry on the basis of the order passed on 22.09.2008 in opposition Nos. MAS-52359-60 and MAS-51762 filed by the Plaintiff. The orders were admittedly passed in the three oppositions filed by the plaintiff to the defendant no.1‟s application by the Deputy Registrar of Trademarks on 22.09.2008 and the registration certificates were issued on 30.09.2008. It is pertinent to mention that the Deputy Registrar of Trademarks while passing the order has given the specific finding in favour of the Defendant no.1 that (a) there is no dishonest intention or bad faith on the Defendant No.1‟s side in adopting the mark in question; (b) there is no likelihood of confusion/deception amongst the general public; (c) that the trademark applied by the Defendant No.1 CFA and CFA Programme is nowhere identical to the Plaintiff mark ICFA and the mark cannot be refused registration because the use of the marks have to be prevented under the law of passing off action; (d) that the Plaintiffs are not entitled to operate their CFA Programme in India as the USA company has no outlets or branches in India. Therefore, the CS(OS) No.210/2004 Page 39 of 59 question of passing off does not arise. (e) that Defendant No.1 is the lawful proprietor of the trademark CFA, CFA monogram and they are entitled for registration.
73. All these findings given by the Deputy Registrar of Trademark are totally contrary to the findings given by this Court in order dated 04.08.2006 while deciding the application of the Plaintiff under Order XXXIX Rules 1 and 2 after hearing the parties. It is pertinent to mention that while deciding the application for injunction this court has come to the following conclusion :
a) There is no dispute that the Plaintiff is the first user of the mark CFA and the Defendants are using the mark only after they entered into a kind of collaboration with the Plaintiff.
b) That the genesis of ICFAI lay in the license granted by the Plaintiff.
c) As far as the Defendants work under the license, there is no question of any acquiescence and it cannot be said that the Plaintiff had acquiesced to the use of the name and the marks by the Defendants.
d) If the Defendants are allowed to use the mark the Plaintiff will lose the exclusive right to use the marks and its valuable rights in the marks will be lost or substantially damaged.
e) The Defendants were restrained from passing off their programmes of business as that of the Plaintiff.CS(OS) No.210/2004 Page 40 of 59
74. It is also a matter of great surprise that the impugned order was passed on 22.09.2008 and the registration certificate in all the three trademarks was issued on 30.09.2008 in favour of defendant no.1 by the Trade Marks Registry. In normal course, it has been seen that the certificates are not issued in such a great haste. Admittedly, there is a limitation period of three months to challenge the orders passed by the Registrar/Deputy Registrar of Trademarks in opposition proceedings.
75. Even otherwise if issuance of the registration certificates constitutes a subsequent event, the same is irrelevant to a passing off suit wherein statutory rights are secondary to prior rights acquired through use. Section 27(2) of the Trade Marks Act, 1999 preserves the passing off remedy and is to the following effect:
"Nothing in this Act shall be deemed to affect rights of action against any person for passing off goods or services as the gods of another person or as services provided by another person, or the remedies in respect thereof."
76. In N.R. Dongre and Ors. Vs. Whirlpool Corporation and Ors. AIR 1995 Delhi 30, it is laid down that prior registration cannot defeat the rights of a Plaintiff in a passing off action. Similarly in case of Austin Nichols and Company and Anr. Vs. Arvind Bahl and Anr. (Blenders Pride) reported in 2006 (32) PTC 133 an injunction was issued against the Defendants despite of obtaining registration. Further, the case law relating to first use in India lays down that the mere fact that a Plaintiff "has not been using the mark in India would be irrelevant if it was first in the world market" (the Supreme Court of CS(OS) No.210/2004 Page 41 of 59 India in the Milment case). The test laid down by the Supreme Court is that "merely being first past the post in India is not enough. The Plaintiffs were first past the post worldwide and this is of crucial importance". In any event, the fact remains that even in India the use of the disputed trade marks by the Plaintiff is prior to that of Defendants. The Plaintiff has filed a copy of its newsletter dated August 1981 in these proceedings to demonstrate that its first CFA examination in India was conducted in the year 1981, much prior to the license granted by the Plaintiff to the Defendant No.1 in 1985.
77. For the aforesaid reason this Court is of the view that the registration certificates obtained by the Defendant No.1 do not help the case of Defendant No.1 for vacation of interim order as this court has already held in its order dated 04.08.2006 that the Plaintiff is the prior user of the trademark in question. Further, these applications were filed prior to the filing of the Suit. The plaintiff has filed the passing off actions, even if the certificates are taken into consideration as subsequent development, the Suit of the Plaintiff would remain the Suit for passing off. So I am of the considered view that the said ground is not a valid ground for the purpose of vacating the interim order already granted by this court.
(ii) Cancellation of Plaintiff's trade mark in India
78. It is alleged by the defendant no.1 that the predecessor of the Plaintiff AIMR was the registered proprietor of the mark „CFA‟ bearing registration No. 399072 however, by order dated 25.07.2007, the Deputy Registrar of Trademarks cancelled the said registration. The CS(OS) No.210/2004 Page 42 of 59 trademark application vis-à-vis the said mark has been re-advertised by the Plaintiff in the trade mark journal and the same has been duly opposed by Defendant no. 1.
79. The plaintiff has mentioned the fact that it was only at the instance of the Defendant No.1 that the Deputy Registrar of Trademarks initiated proceedings under Section 57(4) of the Trade Marks Act, 1999 to rectify the said registration. It is clearly mentioned in the order dated 25.07.2007 that the Defendant No.1 wrote a letter to the Trade Mark Office on 26.11.2006 after passing the interim order stating that: (a) the entry made in the register in respect of the said application was wrongly made and ought to be removed; (b) the said application was advertised before acceptance under Section 20(1) of the Trade Marks Act; (c) the advertisement erroneously published the name and address of the Defendant No.1 and hence the Defendant genuinely believed that it was its own application.
80. Even if the cancellation of the Plaintiff‟s registration can be pleaded as a subsequent development as the cancellation was affected due to a clerical error on the part of the Trade Marks Registry in the details of the published application and not as a result of any decision of the rights of the Plaintiff in the marks in question. Thus, it cannot be considered as change in circumstances in the nature and circumstances of the case in any manner.
(iii) Registration of Defendant no. 1's trademarks outside India
81. It is submitted by the defendant no.1 that the Plaintiff‟s CS(OS) No.210/2004 Page 43 of 59 goodwill and repute as regards the trade marks in question is only limited to the United States of America as Defendant no 1 has the mark „ICFAI‟ registered in its favour in two foreign countries being UAE (Classes 41 and 16) and Singapore (Classes 41, 36 and 16) and even in India, the use of the words/marks „ICFAI‟ and „CFA‟ are related to the Defendant no. 1 and not to the Plaintiff.
82. In reply, the Plaintiff has contended that the afore-mentioned registrations obtained by Defendant no. 1 have been adopted in bad faith as at the time of adoption of trademarks and subsequent applications, Defendant no. 1 was a licensee of the Plaintiff. The registration of these trademarks in favour of Defendant no. 1 in foreign countries can in no way obliterate the extensive user/ registrations of the Plaintiff.
83. It is settled law that in case a licensee filed the application for the registration of the same trademark for registration without the consent of the licensor, it amounts to a fraudulent move as during the license period, a party cannot claim the owner of the trademark, even otherwise the foreign registrations, if granted, have no consequence in the matter as no exclusive rights can be claimed by virtue of foreign registrations even if granted by the process of law, hence ground (iii) has no force and the interim injunction cannot be vacated on this ground also.
(iv) Rejection of Plaintiff's application for registration of trademark in United Kingdom
84. It is averred by the defendant no.1 that the Plaintiff filed an application for registration of the trade mark „Chartered Financial CS(OS) No.210/2004 Page 44 of 59 Analyst‟ in Class 36 in the United Kingdom in the year 2000. The said application was opposed by an organization being „The Chartered Insurance Institute‟ and the Registrar of Trade Marks, United Kingdom rejected the Plaintiff‟s said application.
85. The Plaintiff has contended that Defendant no. 1 has suppressed material facts insofar as the said application was rejected due to a law peculiar to the United Kingdom, i.e. the expression „chartered‟ conveys the impression that the mark enjoys an approval equivalent to the Royal Charter, which is not permissible under Section 3 (3) (b) of the UK Trademarks Act. Any application seeking registration of a mark including the word „Charter‟/ „Chartered‟ would face the same opposition and rejection.
86. For the reasons given in Para 78-80 of my order, I do not find any merit in this ground also for vacation of the interim order.
(v)Refusal of High Court of Colombo, Sri Lanka to grant ad interim injunction
87. In this ground the submission of defendant no.1 is that the Plaintiff had filed a suit in the High Court of Colombo, Sri Lanka seeking to restrain the Sri Lankan chapter of Defendant no. 1 from using the trade marks „ICFA‟, „CFA‟ etc. and had also filed an application for temporary injunction in the same regard. The said application was disallowed by a speaking order dated 13.10.2008.
88. Addressing this contention of Defendant no. 1, the Plaintiff has submitted that the said order is being referred to without the necessary details insofar as it has been made to appear as if the said CS(OS) No.210/2004 Page 45 of 59 order has attained finality despite the fact that the Defendant no. 1 is aware that the said order has been appealed against on 27.03.2008 and has been listed thereafter before the Supreme Court of Sri Lanka on seven occasions for hearing/arguments etc.
89. In the present case, this Court had passed the interim order after hearing the rival submissions of the parties and the Court had also come to the conclusion that the Plaintiff is the prior user of the trademark in question and the defendants are passing off their services as that of the Plaintiff. Even if the Plaintiff‟s application for injunction has been refused by the Colombo High Court, that is no reason to vacate the interim order already passed on merit. This Court is not aware under what circumstances the interim orders were not passed, therefore, I find no force in this ground also for vacating the order.
(vi) Admissions made by Plaintiff while giving Evidence in Discovery Proceedings in Virginia, USA
90. It is argued by defendant no.1 that in the „Discovery Proceedings‟ took place in the United States of America pursuant to the orders of the District Court, Eastern District of Virginia, USA in Civil Action No. 3-98CV417 instituted by the Plaintiff against Defendant no.
1. As per the applicant, certain statements have been made by Mr. Jeffrey J. Diermeier, former President and CEO of the Plaintiff, Mr. William P. McKeithan, former General Counsel of the Plaintiff and Mr. Thomas Bowman, erstwhile President of the Plaintiff‟s predecessor AIMR amongst other persons which are admissions regarding the absence of any relationship between the Plaintiff/ its predecessor and CS(OS) No.210/2004 Page 46 of 59 Defendant no. 1 and are to the effect that they negate the contention of the Plaintiff that the Minutes of the Meeting held on 14.08.1985 actually constituted a trade mark licensing agreement between the parties. The details of these admissions have been laid out on pages 14-20 of the present application.
91. The Plaintiff‟s arguments and contentions vis-à-vis this aspect are that Defendant no. 1 has suppressed material facts and presented this contention completely out of context and in bad faith.
92. Admittedly these depositions were made in a contempt action filed by the Plaintiff against the Defendant No.1 and on March 30, 2009 the District Court in Virginia has allowed the said contempt action. Some relevant dates which are available on record are necessary to mention which read as follows:
a) 1995- During the subsistence of its license arrangement with the Plaintiff in India (which was only in respect of the CFA program in India), the Defendant No.1 intended to set up a university called the Transworld University in the United States of America to offer its „CFA Program‟ in the United States of America and Canada. The Plaintiff raised an objection to the same on the basis of its prior registrations and use of the CFA marks in the United States of America. Pursuant to discussions between the parties, a settlement agreement was entered into between them wherein the Defendant No.1 acknowledged and admitted the rights of the Plaintiff I the CFA marks and agreed not to CS(OS) No.210/2004 Page 47 of 59 use the same for the territories of the United States of America and Canada. While forwarding the said settlement agreement to the Defendant, the Plaintiff made it known to the said Defendant that the issue of use of the CFA marks in India was a separate issue being dealt with through negotiations in India.
b) 1998 - Subsequent to signing the 1995 settlement agreement, the Defendant No.1 reneged on its terms, compelling the Plaintiff to seek enforcement of the same before the Virginia Federal District Court. On October 7, 1998, the Virginia Court entered a default judgment in favour of the Plaintiff and against the Defendant No.1.
c) May 2007 - After 9 years of subsistence of the default judgment, the Defendant No.1 filed an application before the District Court, challenging the said default judgment on the ground of lack of personal jurisdiction over the Defendant No.1 when the judgment over the Defendant No.1 when the judgment was passed. At first instance, the District court agreed with the Defendant No.1 and vacated the said default judgment. The Plaintiff preferred a review motion before the same court, citing evidence of facts showing the court‟s personal jurisdiction over the Defendant. The said motion was allowed and the default judgment was reinstated.CS(OS) No.210/2004 Page 48 of 59
d) September 2007 - The Defendant No.1 appealed the reinstatement order to the Virginia Court of appeal.
e) September 2007 - Besides the reinstatement motion, the Plaintiff also filed a contempt petition before the District Court against the Defendant for breach of the default judgment on the ground, inter alia, that in breach and violation of the prohibition on the Defendant No.1‟s use of the Plaintiff‟s marks in the territories of the United States of America and Canada, the said Defendant had been taking steps to use the marks in the United States of America including filing of trademark applications on the basis of use of these marks in commerce in the US and shipping material bearing the CFA marks to candidates in the United States of America.
f) January 2009 - The appeal filed by the Defendant No.1 against the reinstatement order was also dismissed by the Virginia Court of Appeal on January 9, 2009 and the reinstatement order of 2008 was confirmed.
g) March 2009 - On March 30, 2009, the contempt petition filed by the Plaintiff against the Defendant No.1 for stated breaches of the default judgment during the period of its currency was also allowed by the District Court.CS(OS) No.210/2004 Page 49 of 59
93. Extract from the order dated January 9, 2009 marked as Annexure 18 "The District Court, however, agreed with the CFA Institute's Rule 4 (k) (2) contention. In contrast to the extensive findings made in the 1998 opinion, the reinstatement opinion made a more limited assessment of the facts underlying in the court's jurisdictional analysis. By the reinstatement opinion, the court observed that, "the parties, at a minimum, agree" to the following:
As of 1995, ICFAI's then executive director, Subhash Sarnikar: (1) registered a corporation on behalf of ICFAI in California; (2) made the decision to let that registration expire; and (3) had a relationship with Transworld University, a California entity. In addition to these California contacts, (4) an ICFAI representative visited Virginia in 1984, although defendant avers no business was conducted; (5) an ICFAI representative attended a CFA Institute Board meeting in Virginia in 1987; (6) ICFAI corresponded and collaborated with the CFA Institute over an extended period; and (7) the entities are parties to a 1995 settlement agreement."
94. Extract from the order dated March 30, 2009 marked as CS(OS) No.210/2004 Page 50 of 59 Annexure 16 "Finding the language of the injunction is both specific and unequivocal, CFAI needs only to demonstrate clearly and convincingly that Defendant ran afoul of any of the injunction's provisions to satisfy this element of civil contempt. As the following demonstrates CFAI has done so....
Additionally, Defendant filed applications wit the Patent and Trademark Office ("PTO") for several marks prohibited by the injunction. In those applications, Defendant averred under penalty of perjury that it first used "ICFAI" in US commerce as early as August 31, 2000; "ICFAI Business School" as early as March 31, 2002;....... "ICFAI University Press" as early as March 31, 2003;....... "ICFAI University" as early as April 30, 2003. All of these dates follow Defendant's notice of the injunction. ........
Defendant's arguments are unpersuasive. To begin for the reasons discussed......, the unequivocal language of the 1998 order did not limit itself to Defendant's CFA program. Next, although Defendant claims it exerts no control over ICFAI University, Defendant lists ICFAI University as one of its "constituent units" - units Defendant refers to interchangeably in its prospectus. Moreover, ICFAI University has the same physical address CS(OS) No.210/2004 Page 51 of 59 as Defendant... ICFAI University officials have the same email address suffix as Defendant's employees, Defendant filed the application with the PTO for the mark "IFCAI University", Defendant contacted IANT in order to provide exams in the US for ICFAI University students, Defendant paid IANT for conducting exams on behalf of ICFAI University, and ICFAI University students sign a enrolment agreement directly with Defendant. This evidence belies any notion that Defendant exerts no control over - or, at the very least, has not acted in concert with - ICFAI University as this provision of the injunction was repeatedly violated.
........ In sum, the evidence demonstrates clearly and convincingly, and, therefore, the court finds, that Defendant violated numerous provisions of the Injunction issued by this Court in its 198 Order. Specifically, the Court finds that ICFAI has (I) used and promoted the prohibited marks generally, (2) used and promoted the prohibited marks in relation to business transactions, (3) used the prohibited marks in connection with a website accessible in the United States and Canada, and (4) failed to submit the written report required by the 1998 order.
95. As already stated that in the discovery proceedings as per Defendant No.1, certain disclosures are stated to have been made by the representatives of the Plaintiff in the United States of America pursuant CS(OS) No.210/2004 Page 52 of 59 to the orders of the District Court, Eastern District of Virginia, USA. The substance of this ground is linked with the ground (vii) of the application made by the Defendant Nos. 1 and 2. It is pertinent to mention that in the order dated 04.08.2006, learned Judge has already considered the point of License Agreement in Para 14-17 of the order. In the present application the Defendant No.1 has given the details of statement of witnesses/representatives of the Plaintiff and according to the Defendant No.1 the disclosure statement made by the witnesses are good enough to demolish the case of the Plaintiff about the License Agreement. I do not agree with the submission of the Defendant No.1 firstly, on the ground that the learned Judge of this Court who has passed the interim order has clearly come to the prima facie conclusion that the Defendant No.1 is the licensee of the Plaintiff and all the objections raised by the Defendant No.1 have been considered. Secondly, on the ground that the decisions given by the District Court, USA dated 09.01.2009 and 30.03.2009 wherein it is clearly held that the evidence demonstrates clearly and convincingly that the Defendant violated the numerous provisions of the injunction orders. The said order was passed after depositions of the representatives of the Plaintiff. Thirdly, it appears that on the basis of depositions given by the witnesses, the motion has been allowed while rejecting the claim of the Defendant No.1.
96. Further, both the parties are trying to justify their submissions by referring the statement of the witnesses. I am of the view that the present action is an independent action and it has to be decided CS(OS) No.210/2004 Page 53 of 59 as per its own merit as per evidence produced by the parties. Issues in the matter are yet to be framed, therefore, any statement or part of the statement, if recorded in favour of any of the parties, no benefit can be derived as all these contentions are relevant for the purpose of trial. The Defendant No.1 is, therefore, entitled for the relief claimed on this ground for vacation of the interim order.
(vii) Minutes of Meeting not valid License Agreement
97. As per the details set out by Defendant no. 1 in light of the alleged „admissions‟, it is contended that there was no licensing agreement between the parties and since the impugned order is based on the assumption that the Minutes of Meeting dated 14.08.1985 was actually a licensing agreement, the said order is based on an erroneous conclusion. Further, the said Minutes were not construed as a licensing agreement by either of the parties till the institution of a suit by the Plaintiffs in 1997.
98. The Plaintiff‟s submissions in this regard are that the learned Single Judge in order dated 04.08.2006 has dealt with all these facts in painstaking detail and has only then proceeded to make the said order. Further, the alleged „admissions‟ on the basis of which the Defendant no. 1 has stated its last two contentions were part of a contempt motion which had since been allowed in favour of the Plaintiff and in fact, as the documents filed in those proceedings were admitted by the Defendant no. 1, it cannot now resile from the evidence that indicates the existence of the license agreement between the parties.
99. The Plaintiff has produced the evidence of a license CS(OS) No.210/2004 Page 54 of 59 arrangement between the Plaintiff and Defendants. There are specific pleadings in this respect. Some of the documents have been admitted by the Defendant no. 1 at the time of admission/denial of documents.
100. It is not denied by the Defendant no. 1 that Mr. Morley, the then President of the Plaintiff and signatory to the license agreement dated August 14, 1985 was invited by the Defendant No. 1 and served on the Board of Governors of the Defendant. During his tenure, Mr. Morley on behalf of the Plaintiff monitored the Defendant‟s program and co-signed the charters issued to successful candidates of the Defendant‟s CFA program. The CFA Digest was published under license of the Plaintiff, thereby indicating a collaborative relationship between the parties.
101. The most important aspect of the matter is that the Learned Single Judge had considered all these facts while passing the interim injunction order of August 4, 2006 in para 14 to 17 of her order, the same read as under:-
"14. In the present case there is no dispute that the plaintiffs are the first users of the mark `CFA' and the defendants started using the mark only after they entered into a kind of collaboration with the plaintiffs and claimed to be imparting the same kind of education and training as that provided by the plaintiffs. The first defendant has been using the marks `CFA' and `ICFAI' or `Institute of Chartered Financial Analyst of India' now for quite sometime. While the plaintiffs claim that the defendants' user has its origin in a license granted by the plaintiffs, the defendants contend that the plaintiffs have acquiesced in the user of these acronyms and, therefore, are estopped now from seeking an injunction against the defendants. The question of CS(OS) No.210/2004 Page 55 of 59 acquiescence and license are thus related questions. The plaintiffs rely upon a document dated 14.8.1985 as the one by which the plaintiffs expressed their consent to the defendants using the mark. As the facts are disclosed in the plaint, the representatives of the defendants visited plaintiff No.2 at its headquarters at Charlottesville, Virginia, USA sometime in the year 1985 to discuss the establishment of an education and testing programme for investment professionals in India by the first defendant. Shortly thereafter in August 1985 the President of the plaintiff No.2 went to India and met the first defendant's representatives to discuss the project. It was during this visit that plaintiff No.2 and the first defendant reached an agreement which was recorded in the minutes signed by the respective parties on 14.8.1985 which is claimed to be a license agreement.
15. The plaintiffs also rely upon certain other documents regarding the incident of meetings between the parties particularly involving the plaintiffs' representative Mr.Morley. The document dated 14.8.1985 described itself as minutes and is inscribed on the letterhead of Institute of Certified Financial Analysts. It is the claim of the plaintiffs that while the defendants named itself Institute of Certified Financial Analysts or ICFA, it was eying the reputation of the plaintiffs. The minutes are signed by Mr.V.Sankaran of the defendants and Mr.Alfred C.Morley of the plaintiffs. The minutes open with the following words, "These notes summarise and confirm the thoughts and decisions arising out of discussion between and among M/s.Alfred C.Morley, Mr.N.J.Yasaswy, Dr.Besant Raj, Dr.Prasanna Chandra and Mr.V.Sankaran, during the period August 12-14, 1985 in Bombay, Hyderabad and Bagalore, India."
16.The salient features of the minutes are extracted below:
"1. The ICFA (USA), now better understanding and accepting the purpose and mission of the proposed ICFA (INDIA), is willing to assist and encourage in a variety of ways the development and success of ICFA CS(OS) No.210/2004 Page 56 of 59 (INDIA).
2. Assistance and encouragement as identified above is subject to approval of ICFA (USA) Trustees, and it is expected that the Trustees will take action at their September 1985 meeting.
3. Details of assistance and encouragement include, but are not limited to the following:
a) Use of the ICFA and CFA initials by ICFA (INDIA) after it has been determined by the ICFA (US) that the admissions standards, study programme and materials and examination process are and continue to be of the highest calibre relative to conditions and circumstances in India. .......
f) The ICFA (USA) is willing to countersign the CFA certificate awarded by ICFA (INDIA) subject to the conditions outlined in a) above having been met.
4. ICFA (US) has no intention of its collaboration and other involvement with ICFA (INDIA) generating for its unrealistic profits. However, direct cost of assistance and encouragement as defined above will be borne by ICFA (INDIA). Such direct cost would include applicable travel to and food and lodging in India, expense of creating and/or delivering study programme material and related documents for use by ICFA (INDIA), and the like. In addition, to be negotiated is a "Time Cost" of ICFA (US) assistance and encouragement, possibly in the form of a minimum base amount and/or a fee per candidate accepted by ICFA (INDIA).
Whatever is negotiated in this respect will be subject to approval by appropriate governmental authorities in India."
17.The document, unmistakably shows collaboration between the plaintiffs and the first defendant. It also indicates by para 3(a) extracted above that the use of the initial `ICFA' and `CFA' were approved of by the plaintiffs. While permitting the user of the marks the plaintiffs ensured that the marks/acronyms are not devalued in any way and, therefore, they insisted that the standards of the study programmes and material, examination process are of highest calibre CS(OS) No.210/2004 Page 57 of 59 relative to the conditions and circumstances in India. The collaboration actually put the plaintiffs on the top as clause 3(f) extracted above shows that the defendants and the plaintiffs agreed that all CFA certificates awarded by the defendants would be countersigned by ICFA (US). Obviously the defendants were encashing upon the goodwill and reputation of the plaintiffs. The defendants, it appears, persuaded the plaintiffs in entering into this kind of collaboration by undertaking and promising to maintain the highest of the standards in the training to be given to the financial analysts to be trained by their institute or organization. It is true, as pointed out by Mr.Sudhir Chandra, that the document is not drawn up in the legal form of a collaboration agreement. Nonetheless the nature of the document has to be ascertained from the contents and not from the form. The document is clearly indicative of the origin of relationship between the two parties. It shows beyond doubt that defendant No.1 wanting to establish itself as a institute of good standard wanted to, in some way, associate or collaborate with the plaintiffs and persuaded the plaintiffs to give consent to the user of the name in order to project its image in India as a counterpart or the Indian Chapter of the Institute of Chartered Financial Analysts, US."
102. For the aforesaid reasons, it is not possible for this Court at this juncture of considering the application mentioning subsequent events to examine the entire issue again. The Court while disposing off the main application for injunction has already arrived at its finding in favour of the Plaintiff and the same can not be relooked in the present stage of the matter. Hence, the grounds raised in this application are without any force and are rejected. As for the submission of the plaintiff about the steps taken by the defendant no.1 in order to bypass and evade the effect of interim order, the plaintiff‟s CCP in this CS(OS) No.210/2004 Page 58 of 59 respect is already pending, thus the contention raised by the plaintiff cannot be determined in the present application.
103. Having considered the submissions of the parties and material placed on record, I do not find any merit in the application and the same is dismissed with costs of Rs. 50,000/-.
104. All observations made in this order are tentative and shall have no bearing on the final outcome of the Suit.
105. List the matter before Regular Bench on 16th April, 2010 for further proceedings.
MANMOHAN SINGH, J.
APRIL 05, 2010 dp CS(OS) No.210/2004 Page 59 of 59