Chitali Bottling Limited, Thr. ... vs Brihan Karan Sugar Syndicated ...
2022 Latest Caselaw 4997 Bom

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            IN THE HIGH COURT OF JUDICATURE AT BOMBAY

                     CIVIL APPELLATE JURISDICTION

            APPEAL FROM ORDER (STAMP) NO.3938 OF 2020
                                   WITH
                  INTERIM APPLICATION NO.2694 OF 2020
                                     IN
            APPEAL FROM ORDER (STAMP) NO.3938 OF 2020


Chitali Bottling Limited
[CIN No. U15549PN2010PLC137134]
O/at: D-1/4, Liberty Society, Phase-II,
North Main Road, Koregaon Park,
Pune - 411 001
Through its Authorized Representative
Mr. Mohan Parmanand Chug,
Age 56 years, Occupation : Service,
O/at: D-1/4, Liberty Society, Phase-II,
North Main Road, Koregaon Park,
Pune - 411 001
Email: [email protected]                       ....Appellant
                                                   (Original Plaintiff)
            Vs.

1     Brihan Karan Sugar Syndicate
      Private Limited,
      [CIN No.U15425MH2008PTC178959]
      O/at : B-102, Daffodils, Wing-B,
      Hiranandani Gardens, A. S. Road,
      Powai, Mumbai - 400 076.
      O/at : 2nd Floor, Office No.5, Star Zone Mall,
      E-1 Building, Nashik Pune Highway
      Nashik Road, Nashik - 422 101.
      Email: [email protected]

2     Karan Liquors Private Limited
      [CIN No.U15512MH1999PTC123333]
      R/at : Plot No.-05-A, Opp. Police Force
      Training Centre, Nashik Pune Road,

                                                                           1/41
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      Nashik 422 101.
      Email: [email protected]
      O/at : 2nd Floor, Office No.5, Star Zone Mall,
      E-1 Building, Nashik Pune Highway
      Nashik Road, Nashik - 422 101.
      Email: [email protected]

3     Dharampal Kimatram Kalani,
      Age : Adult, Occupation : Business
      R/at : B-102, Daffodils, Wing-B,
      Hiranandani Gardens, A.S. Road,
      Powai, Mumbai - 400 076.
      Mob. No. 9673005200
      Email: [email protected]

4     Kanyalal Kimatram Kalani,
      Age : Adult, Occupation Business,
      R/at : B-102, Daffodils, Wing-B,
      Hiranandani Gardens, A.S. Road,
      Powai, Mumbai - 400 076.
      Mob. No.9822037420
      Email: [email protected]

5     Hiralal Kimatram Kalani,
      Age: Adult, Occupation : Business,
      R/at : B-102, Daffodils, Wing-B,
      Hiranandani Gardens, A.S. Road,
      Powai, Mumbai - 400 076.                         ....Respondents
                                       (Original Defendant Nos.1 to 5)

Dr. Abhinav D. Chandrachud a/w. Mr. Bernardo Reis a/w. Mr. Lalit
Jhunjhunwala and Mr. P.S. Patil i/b. Triyama Legal for Appellant.

Mr. Sanjeev Gorwadkar, Senior Counsel a/w. Mr. H.W. Kane, Mr. Rohan
Kadam, Mr. Rahul Kadam, Mr. A.H. Kane, Ms. Apurva Gupte, Mr. N. Sharma
Mr. A. Bagwe, Ms. Merin Mathew and Ms. S. Vaze i/b. W.S. Kane & Co. for
Respondent No.1.
                            CORAM          : A.S. GADKARI, J.

                         RESERVED ON       : 30th August, 2021
                        PRONOUNCED ON : 6th JUNE, 2022.

JUDGMENT:-



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1             Appellant, Original Plaintiff, has preferred present Appeal

under Order 43 Rule 1 of the Code of Civil Procedure, 1908 (for short,

`CPC') impugning the Order dated 25th February, 2020 passed by 19th Joint

Civil Judge, Senior Division, Pune, below Exh-5 in Special Civil Suit No.95

of 2020, rejecting the said Application filed under Order 39 Rule 1 and 2 of

CPC by Appellant for temporary injunction.

2 Heard Dr. Abhinav Chandrachud, learned counsel for the

Appellant and Mr. Sanjiv Gorwadkar, learned senior counsel for

Respondents. Perused entire record and Summary of Propositions filed by

learned counsel for the respective parties.

3 Appellant is the original Plaintiff in Special Civil Suit No. 95 of

2020 filed by it for declaration that, the Appellant's company has the right

to manufacture, supply and sale of the three country liquor products i.e. (i)

Sakhu Santra Tango Premium (ii) Tango Punch and (iii) Tango Punch

Santra; a decree of permanent injunction against Respondents thereby

restraining them, either by themselves or through their agents, servants,

assignees, attorneys or any other person acting on behalf of the

Respondents from distributing, interfering with in any manner, the

production, marketing and supply of the said three country liquor products

by the Appellant company; for interim injunction and for other

consequential reliefs as more specifically mentioned in paragraph No.37 of

the plaint.

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4           It is the case of the Appellant that, it is engaged into the

business of manufacturing and trading of liquors in the State of

Maharashtra since 2010. That, the Respondent No.1 is also engaged in the

business of manufacturing of liquor in the State. Respondent Nos.4 and 5

are the Directors of Respondent No.1. Respondent No.2 is also a company

engaged into the business of manufacturing of liquor in the State and

Respondent Nos.3 and 4 are the Directors of Respondent No.2.

It is stated that, the Respondent No.1 is the owner,

manufacturer and promoter of country made liquor by name and style (i)

Sakhu Santra Tango Premium (ii) Tango Punch and (iii) Tango Panch

Santra. That, the Respondents, with a view to expand their business and

promote their products in the District of Pune approached the Appellant in

the beginning of 2014 through Respondent No.4 and proposed a business

arrangement. It was proposed that, the Respondent No.2 would buy

33.34% shares of the Appellant company so as to become part of the

Appellant at a nominal cost and share the profits from the business of the

Appellant company. It is the case of Appellant that, the terms and

conditions, more specifically mentioned in para No.5 of the plaint was an

oral agreement which was concluded at the office of the Appellant at Pune.

That, in furtherance of Oral Agreement between the parties, a 'Share

Purchase And Share Holders Agreement of Chitali Bottling Ltd.' (herein

after referred to as 'Share Purchase Agreement') was executed on 2nd

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August, 2014, by which 33.34% of Appellant Company's shares i.e. 1667

equity shares were sold in favour of the Respondent No.2 at a nominal cost

of Rs.1,66,700/- only, by the shareholders of Appellant company. It is the

further case of Appellant that, the said agreement was given effect limited

to the transfer of shares and other provisions of the said agreement were

neither given effect to, nor enumerated in the Articles of Association of the

Appellant company. That, subsequent to the agreement dated 2 nd August,

2014, the Appellant company with the express consent and concurrence of

the Respondents, applied for permission to manufacture and sale of

Country Liquor label marks to the Commissioner, State Excise Department,

Government of Maharashtra, for manufacturing and sale of country made

liquor. The Commissioner, State Excise Department, vide its letter dated

18th November, 2014 granted approval to the Country Liquor label marks

alongwith maximum label price for (i) Sakhu Santra Tango Premium (ii)

Tango Punch and (iii) Tango Panch Santra, in the name of Appellant

company. That, after approval of labels, manufacturing and sale of said

three country liquor products was started and continued by the Appellant.

That, at the time of legal due diligence by the legal experts of the entire

structuring of the business of the Appellant, a question arose, as to the

exploitation of the labels of the above stated three brands of Respondent

No.1 which were permitted to be used in the name of the Appellant

company by the State Excise Department. To avoid any hassles with the

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various Government Departments and as per the advice of the Legal

Experts, a License Agreement was executed on 6 th December, 2014. That, in

view of the execution of the Share Purchase Agreement for actual business

arrangement, the said License Agreement was never intended to be acted

upon nor was acted upon, as the yearly license fees of Rs.1 Lakh was never

paid under the said agreement, neither it was signed by all the parties nor

even by the Directors of Respondent No.1. That, the said License

Agreement was never acted upon, as the said License was for a period of 2

years from the date of its execution, however it was never renewed and yet

the Appellant with active participation of Respondents continued to

manufacture and market products till the date of filing of the suit. That,

the profits made out of business under the oral agreement reached between

the Appellant and Respondents, was to be distributed and disbursed to the

shareholders of the Appellant company in the ratio of their share-holding.

However, the disbursement was never done according to the share holding.

It is alleged by the Appellant that, the Respondents on one or the other

pretext kept on withdrawing large sums of money from the Appellant

company. That, the Respondents collectively withdrew a sum of

Rs.7,33,43,562/-, which amounts to 78.33% of the total withdrawals from

the Appellant company as against shareholding of 33.34% of the

Respondents. That, after starting operations of business in the year 2014,

the Appellant company started to make profits in the year 2016. Due to

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efforts put in by the Directors of the Appellant the sale of products

manufactured by Appellant company grew by 350% between 2013-2014

and 2016-2017 and later on it reduced. That, as per the suggestion of

Respondent No.4, his son Mr. Rahul Kalani was released Rs.5 Lakhs per

month as salary from the Appellant company and Respondent No.4

Kanayalal Kalani was released a monthly payment of Rs.10 Lakhs towards

profit distribution so as to structure the taxes application to the business of

the Applicant. The total withdrawals by Rahul Kalani and Respondent No.4

Kanayalal Kalani up to 30th September, 2019 were the said amount as noted

above. It is stated that, at the end of financial year 2017-18, the

Respondents called for a meeting with Mr. Mohan Chug and asked for

increase in the money being paid to the Respondents out of the business

profits of the Appellant. Appellant resisted the said suggestion and told

Respondents that, it was not justified for them to ask for increase in the

share of profit of the company as the Respondents have already withdrawn

about 78.33% of total profits in the last 5 years. This proposition by

Appellant did not get well with the Respondents and to its utter shock and

surprise, on 3rd May 2018, the Respondent No.1 sent a letter stating that,

the License Agreement dated 6 th December, 2014 stood expired by efflux of

time and the Appellant should not further manufacture the said three

products. That, due to timely intervention of leading businessmen from the

liquor industry, the dispute came to be resolved and the production of said

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three country made liquor brands was never stopped by the Appellant.

That, by letter dated 30th November, 2018, Respondent No.1 extended the

agreement for three years i.e. between 1 st December, 2019 to 30th

November, 2021. It is stated that till 15 th October, 2019, the functioning of

the Appellant was being conducted smoothly however the Commissioner of

Excise, State of Maharashtra claimed a sum of Rs.57,09,990/- from the

Appellant which was paid by it and asked the Respondents to reimburse the

same. The money paid to the State Excise which was attributable to the

Respondents did not get well with the Respondents and by their letter dated

3rd November, 2019 once again, Respondent No.1 called upon the Appellant

to suspend production and dispatch of country liquor products for which

the Appellant has perpetual right to manufacture and distribute. It is the

case of the Appellant that, the said letter/notice was nothing but another

arm-twisting act on the part of the Respondents to force the Appellant to

bear the defendants' share of penalty also. That, the Respondents are part

of a powerful liquor lobby and are competent to tilt the enforcing agencies

to suit the needs of the Respondents. The Appellant apprehended that, the

Respondents would use the Government machinery/non-Governmental

machinery such as physical force and coercion to stop the production of

aforesaid three products and will further try to stop/disrupt the distribution

thereof, by the Appellant company and hence they filed the present suit for

the said cause of action.

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The Appellant also filed an Application below Exh-5 for

temporary injunction.

5 Respondent No.1 filed its reply/say below Exh-15 to the said

Application filed by Appellant below Exh-5. Respondent No.1 raised

objection that, the dispute in the present suit is a `commercial dispute'

within the meaning of Section 2(1)(c) of the Commercial Courts,

Commercial Division and Commercial Appellate Division of High Courts

Act, 2015 and therefore same is liable to be dismissed on that count alone.

It is stated by Respondent No.1 that, License Agreement dated 6 th

December, 2014 and extended by letter dated 30 th November, 2018 was and

is in its nature determinable and therefore the Appellant is not entitled to

file and maintain the present suit for specific performance of the said

License Agreement. That, the Appellant has claimed an alternative relief of

liquidated damages to the tune of Rs.70 Crores and therefore also the

present suit for injunction is not maintainable. Appellant is having equally

efficacious remedy by way of liquidated damages. That, by letter dated 3 rd

November, 2019, Respondents called upon Appellant to suspend the

production and dispatch of country liquor product of the above mentioned

three trade marks and brought the said license for use of the said trade

marks to an end. Respondents denied the case of Appellant that, it is arm-

twisting tactics adopted by them. Assuming that the Respondent No.1 has

wrongfully suspended and/or brought the said License Agreement to an

ssm 10 aost3938.20-Judgment.doc

end, the only relief to which Appellant may be entitled for, is damages and

in any event the Appellant is not entitled to compel the Respondents to

continue with the said License. That, under the License Agreement dated

6th December, 2014, which was extended by letter dated 30 th November,

2018, the Appellant had very limited right to use the trade marks in

question. Under the said license, the Appellant had accepted and

recognized the Respondent No.1's title, statutory and common law rights,

interest and benefit in the subject trade marks as also validity thereof and

has agreed not to do or suffer to do any act or thing which may impair the

rights of the Respondent No.1 to the subject trade marks. Appellant had

agreed that, it shall not have any claim or right title or interest in the

subject trade marks and the said trade marks shall always vest solely and

belong to the Respondent No.1. That, Respondent No.1 having suspended

the said license and having brought it to an end, the Appellant is dis-

entitled to claim a right to continue to use the subject trade marks and in

any event by the said reply Respondent No.1 has brought to an end and/or

terminated it with immediate effect.

The Respondent No.1 is the present registered proprietor as

also proprietor under common law of the subject trade marks. The

Respondent No.1 has in detail narrated, how it acquired/owned the said

trade marks and copyrights for the labels of the said trade marks and their

exclusive ownership over it. It is the case of Respondent No.1 that, some

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time prior to September, 2014, the Appellant was desirous of manufacturing

and trading in country liquor under the Respondents' abovementioned trade

mark labels and requested Respondent No.1 to grant to the Appellant,

license/permission to use the same. That, after having initial agreement in

principle to grant to Appellant, the license to use the said trade marks/

labels, the Appellant on 17th September, 2014 made Application to the

Commissioner, State Excise, Maharashtra State, for approval of the said

labels for use by the Appellant and by its letters dated 13 th October, 2014

and 18th November, 2014, the Commissioner, State Excise approved the use

of the said labels subject to certain terms and conditions which have been

particularly mentioned in the said two letters. That, the Commissioner,

State Excise, had made it clear to the Appellant that, approval of the said

labels was/is subject to the Appellant's obtaining appropriate

permissions/licenses to use the said labels from Respondent No.1. It is

contended by the Respondents that, the Appellant was/is fully aware and

conscious of the fact that before the Appellant could use subject trademark

labels it ought to obtain permission/license from Respondent No.1 to use

the said labels. That, after settling terms and conditions in the case to use

the said trade mark labels by a License Agreement dated 6 th December,

2014, Respondent No.1 granted permission to the Appellant for non-

exclusive license to use the subject trade mark labels on the terms and

conditions more particularly mentioned in the said agreement dated 6 th

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December, 2014. That, as per the License Agreement, the Appellant failed

and neglected to pay license fee of Rs.1 Lakh per annum to the

Respondents. It is specifically contended that, the Appellant also failed and

neglected to maintain quality of country made liquor sold under the subject

trade mark labels resulting into complaints from the office of the

Commissioner, State Excise. That, though the License Agreement came to

an end on 5th December 2016, Appellant continued to use said labels

without seeking extension of earlier right from the Respondent No.1.

Respondents therefore by letter dated 3 rd May, 2016, called upon the

Appellant to immediately cease and desist the use of the subject trademark

labels in respect of its country liquor. That, accordingly, the Appellant

discontinued and ceased to use Respondent No.1's said trade mark labels.

The said situation continued from May 2018 till November 2018. The

Appellant in the meantime, requested Respondent No.1 to renew the

License Agreement dated 6th December, 2014 and assured the Respondent

No.1 that, it will maintain the superior quality goods as per its directions

and would fulfill all other terms and conditions of the said License

Agreement. The Respondent No.1 therefore renewed the said license for the

period from 1st December, 2018 to 30th November, 2021 on the same terms

and conditions as contained in the License Agreement dated 6 th December,

2014. Appellant, pursuant to the extension of License Agreement in or

about December 2018, started manufacturing and selling country liquor

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under the Respondent No.1's said trade mark labels. However, the

Appellant's country liquor sold under the Respondent No.1's trade mark

labels was found to be of inferior quality. The Respondent No.1 by various

e-mails drew attention of the Appellant to the complaints/deficiencies in

the product sold by Appellant under the Respondent No.1's trademark

labels and called upon the Appellant to attend said complaints. As it

appeared to Respondent No.1 that, the Appellant was unable to maintain

quality of country liquor sold under the subject trade marks and taking

strict note of the said complaints, the Respondent No.1 asked Appellant

either to improve quality of the country liquor manufactured and sold by it

under the subject trade mark labels or stop using the same. Respondent

No.1 by its letter/notice dated 3 rd November, 2019 also called upon the

Appellant to suspend production and dispatch of country liquor bearing

Respondent No.1's trade mark labels. Since then, the Appellant

discontinued production and dispatch of country liquor being Respondent

No.1's trade mark labels. That, by the said notice dated 3 rd November,

2019, the License Agreement dated 6 th December, 2014 and extended by

letter dated 30th November, 2018 has been brought to an end by the

Respondent No.1. Respondent No.1 has categorically denied that, the

Appellant would suffer any loss much less loss of money or loss or

disruption of supply or disruption of its distribution network or the alleged

disruption will have everlasting impact on the business of the Appellant.

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Respondent No.1 denied that, it will not suffer any loss for reasons alleged

or at all. Respondent No.1 contended that, on the contrary if the injunction

sought by the Appellant is granted, the Appellant may sell inferior quality

country liquor under Respondent No.1's trade mark labels resulting into

permanent damage to the reputation and goodwill of the trade mark labels

of Respondent No.1. Respondent No.1 therefore contended that, no prima

facie case, balance of convenience or irreparable loss tilts in favour of the

Appellant and prayed that, the said Application may be dismissed with

costs.

6 As noted earlier, the Trial Court by its impugned Order dated

25th February, 2020 passed below Exh-5 has rejected the said Application

filed by the Appellant.

7 Dr. Chandrachud, learned counsel for the Appellant submitted

that, there is no dispute that Respondents are the owners of aforestated

three trade marks. He submitted that, the question is whether the

Appellant is entitled to use the said trade marks for perpetuity in pursuance

of Share Purchase Agreement dated 2nd August, 2014 and the conduct of

the parties. He submitted that, the License Agreement dated 6 th December,

2014 which is at page No.208 was signed by the Appellant only and not by

the Respondent No.2. That, however with a letter/notice dated 3 rd

November, 2019 for termination of license, the said License Agreement

dated 6th December, 2014 signed by both the parties was annexed and it

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was for the first time the Appellant realized that, there is a duly signed

Agreement by both the parties is in existence, annexed at page No.233. He

submitted that, except a letter issued by the State Excise Department to the

Superintendent of Excise stating that, the product manufactured by the

Appellant is of inferior quality, annexed at page No.256 to the plaint in the

Commercial IP Suit No.309 of 2020 filed by the Respondent No.1, there is

no other material on record to show that the Appellant's product was in fact

of inferior quality.

By placing reliance on para No.9 in the case of Surat Goods

Transport P. Ltd. & Ors. Vs. Total Logistics India Pvt. Ltd. & Ors. reported in

(2011) 5 Mh. LJ 53, he submitted that, the Trial Court has failed to

appreciate that, while 'verbal assignment' of trade marks is not permissible,

the 'verbal license' of trade marks is certainly permissible. He submitted

that, in view of the amended Section 14 of the Specific Relief Act, 1963

interim relief cannot be denied if monitory compensation has been claimed.

He submitted that, the Trial Court has erred in rejecting the Appellant's

Application on the ground that, there is an 'equally efficacious remedy for

claiming damages' as has been observed by it in paragraph Nos.9 and 12 of

the impugned Order. That, the said view is contrary to the 2018

amendment to the Specific Relief Act, 1963, by virtue of which Section 14

of the said Act was amended. That, prior to the amendment under Section

14(1)(a) of the said Act, specific performance of a contract could be refused

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for 'a contract for the non-performance of which compensation in terms of

money is an adequate relief.' However, after the 2018 amendment to the

said Act, this is no longer a ground to refuse specific performance of a

contract. The mere fact that, the Appellant has a remedy in damages does

not mean that, the Appellant is not entitled for an injunction restraining the

Respondents from interfering with the Appellant's lawful use of the trade

marks.

Dr. Chandrachud submitted that, the Trial Court has erred in

not properly appreciating true nature of the Share Purchase Agreement

dated 2nd August, 2014 between the parties. By the said Agreement, the

parties herein had entered into a partnership on 2 nd August, 2014. That,

under the Share Purchase Agreement, the Respondent No.2 purchased

33.34 % of the shares of the Appellant and in return thereof, the Appellant

cannot hold a board meeting or shareholders meeting without the presence

of Respondent No.2 nor can it acquire any trade mark from a third party in

order to sell the goods of some third party. That, the Respondent No.2 was

given the right to participate in day-to-day management of the Appellant

Company and to appoint two Directors in it. That, the Shareholders

Agreement has no fixed term and was meant for perpetual partnership

between the parties. That, the parties entered into a Shareholders

Agreement only for the purpose of jointly manufacturing and selling

country liquor using the Respondents' trade mark. That, if the Appellant

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loses the right to use the Respondents' trade mark, the entire purpose of

Shareholders Agreement would be defeated and the Appellant would

become a defunct company. He submitted that, the Shareholders

Agreement is co-terminus with manufacture of goods and the use of the

said three trade marks. The Trial Court failed to appreciate that, the

License Agreement dated 6th December, 2014 was a 'sham document' which

was only drawn up to be kept in the records of the Respondents for

bureaucratic reasons i.e. in case the Excise Department ever requested a

copy of the said Agreement and was never acted upon or meant to be acted

upon. He submitted that, the said Agreement purportedly expired by efflux

of time in December, 2016. However, the Appellant admittedly continued

using the three trade marks of the Respondents even thereafter. That, it

was only by a letter dated 3rd May, 2018, i.e. around a year and a half later

the Respondent No.1 for the first time suggested that, the said Agreement

was expired by efflux of time. He submitted that, it is highly unlikely that

the Respondent No.1 would part with the right to use its said three trade

marks for the negligible sum of Rs.1 lakh, while the Appellant Company

was earning several crores of rupees in revenue by using the Respondents'

trade marks. He submitted that, in reality, between the year 2015 to 2019,

the Respondents withdrew a sum of about Rs.9 crores from the Appellant

company towards salary, interest and other amounts which revenue was

earned by the Appellant from using the trade marks of the Respondents.

ssm 18 aost3938.20-Judgment.doc

He submitted that, in the case of Roop Kumar Vs. Mohan

Thedani reported in (2003) 6 SCC 595, the Hon'ble Supreme Court has

held that, under Section 92 of the Indian Evidence Act 1872, oral evidence

is admissible to show that, a document executed was never intended to

operate as an Agreement but that some other Agreement altogether, not

recorded in the document, was entered into between the parties. That, in

the said provision, it is admissible for a party to a deed to contend that the

deed was not intended to be acted upon, but was only a 'sham document'.

He submitted that, in the instant case, the License Agreement dated 6 th

December, 2014 was a 'sham document' as it was never acted upon or

meant to be acted upon and was only to be kept in the records of the

Respondents, in the event it was required for any official reasons. He

submitted that, though the License Agreement was entered into with

Respondent No.1 and the Shareholders Agreement was entered with

Respondent No.2, both the Respondent Nos.1 and 2 are group companies

under the control and Management of Kalani family and are in that sense

alter-egos of each other. Dr. Chandrachud submitted that, the

Sharesholders Agreement dated 2 nd August, 2014 and the 'Oral License' of

the Respondents trade marks in favour of the Appellant was not

determinable and therefore, the Trial Court has erred in rejecting the

Appellant's Application filed below Exh-5 on the ground that, the said

License Agreement dated 6th December, 2014 is a determinable. He,

ssm 19 aost3938.20-Judgment.doc

however fairly conceded to the legal proposition that, under Section 14 (d)

of the Specific Reliefs Act, specific performance of a contract which is

'determinable' must be refused. He submitted that, the Shareholders

Agreement in clause 9.1, 9.2 thereof clearly does not give any party the

right to terminate the contract at Will. He submitted that, therefore, the

true agreement/understanding of the parties was not in its nature

determinable.

He submitted that, the Trial Court in paragraph No.13 of the

impugned Order erred in holding that, the goods manufactured by the

Appellant are of inferior quality and that there is therefore an element of

public interest in rejecting the Appellant's Application below Exh-5. That,

in the reply filed by the Respondent No.1 to the Application below Exh-5 of

the Appellant, the Respondent No.1 has stated that, the reason it

terminated the License Agreement on 3 rd November, 2019 was because of

allegations that the Appellant's products were of inferior quality. It shows

that the purported termination of the License Agreement itself was

wrongful.

In support of his various contentions, he relied on the following

decisions.

i) Roop Kumar Vs. Mohan Thedani, reported in (2003) 6 SCC 595;

ii) Surat Goods Transport P. Ltd. & Ors. Vs. Total Logistics India Pvt. Ltd.

& Ors. reported in (2011) 5 Mh. LJ 53;

ssm 20 aost3938.20-Judgment.doc

iii) Vidyut Metallics Limited Vs. Malhotra International Private Limited & Another in Appeal No.888 of 1997 (sic 883 of 1997) in Notice of Motion No.1337 of 1997 in Suit No.1084 of 1997, dated 10 th October, 1997 and 27th April, 1998, by the Division Bench of this Court;

iv) Indian Shaving Products Ltd. & Anr. Vs. Gift Pack & Anr. reported in 1998 SCC OnLine Del 829;

v) Ram Sarup Gupta (Dead) by LRs Vs. Bishun Narain Inter College & Ors. reported in (1987) 2 SCC 555;

vi) S.B. Noronah Vs. Prem Kumari Khanna reported in (1980) 1 SCC 52;

vii) Shankarlal Narayandas Mundade Vs. New Mofussil Company Ltd. (In Liquidation) & Ors. reported in (1946) Indian Law Reports 694 (Bom.) Privy Council and;

viii) Union of India & Anr. Vs. Meghmani Organics Ltd. & Ors. reported in (2016) 10 SCC 28.

He therefore, prayed that impugned Order dated 25 th February,

2020 may be set aside and the Appeal may be allowed.

8 Mr. Gorwadkar, learned senior counsel for the Respondents

submitted that, the right to use trade marks of the Respondents and as per

the pleadings of the Appellant itself emanates from paragraph 5(e) thereof

only. It is the case of 'vesting of non-exclusive right to use trade marks' of

Respondents by the Appellant and not 'Oral License' as per the submissions

advanced by the learned counsel for the Appellant. He submitted that, in

para 6 of the plaint, no material particulars are given by the Appellant

about alleged 'Oral License' as claimed by the Appellant. That, the plaint as

submitted before the Trial Court is as vague as possible and what is pleaded

ssm 21 aost3938.20-Judgment.doc

in the plaint is totally contrary than what has been argued before this Court

in the present Appeal. He submitted that, there is no whisper about the

use/vesting/Oral License to use the said three trade marks of the

Respondents in the Share Purchase Agreement dated 2 nd August, 2014.

That, the case of 'Oral License' is pleaded orally only for the first time

before this Court and has not been pleaded in the plaint and/or in the

memo of Appeal.

He submitted that, before execution of 'License Agreement'

dated 9th December, 2014, the Appellant Company and Respondent No.1

Company had passed necessary resolutions in that behalf and therefore the

contention of Appellant that, the Trade marks were permitted to be used by

the Appellant under an 'Oral Agreement' is a sham and moonshine defence

adopted by it. He submitted that, by notice dated 3 rd May, 2018, the

Respondents had called upon the Appellant to cease and desist from using

the trade marks of Respondents. That, the said notice in fact was the notice

of termination of 'License Agreement' dated 6 th December, 2014 executed

between the parties. That, the Appellant neither replied to the said notice

nor denied the case of the Respondents. That, in response to the said

notice, the Appellant did not raise the contention of 'Oral Agreement' at

first instance. That, it is the specific case of the Respondents that, despite

termination of notice, the Appellant continued to use its trade marks. That,

the Respondents in their reply filed below Exh-15 to the Application below

ssm 22 aost3938.20-Judgment.doc

Exh-5 has categorically contended the same. He submitted that, the

Supreme Court in the case of Maria Margarida Sequeira Fernandes & Ors.

Vs. Erasmo Jack De Sequeira (Dead) through Lrs. reported in (2012) 5 SCC

370 has held that, pleadings are the foundation of litigation and in

pleadings, only the necessary and relevant material must be included and

unnecessary and irrelevant material must be excluded. He submitted that,

a license to use a trade mark in common law can only be granted subject to

certain limitations which are akin to the requirements for an agreement for

registered user under the Act. He placed reliance on the decision of the

Supreme Court in the case of Gujarat Bottling Co. Ltd. & Ors. Vs. Coca Cola

Co. & Ors. reported in (1995) 5 SCC 545 to buttress his contentions. He

submitted that, Section 2(b) of the Trade Marks Act defines "assignment"

and "verbal assignment" as contended by the Appellant, has not been

reckoned by the Act. That, Section 25 of the Trade Marks Act postulates

that, the registration of a trade mark shall be for a period of ten years, but

may be renewed from time to time in accordance with the provisions of the

said Section. He submitted that, there cannot be any perpetual license or

assignment or vesting of a trade mark. That, the thing which under the law

the Respondent No1 cannot have, it cannot give it to the Appellant.

Mr. Gorwadkar submitted that, Section 14(d) of the Specific

Relief Act prescribes that, a contract which is in its nature determinable

cannot be specifically enforced. That, Section 41 of the Specific Relief Act

ssm 23 aost3938.20-Judgment.doc

provides when injunction can be refused and Section 41(e) prescribes that,

to prevent the breach of a contract, the performance of which would not be

specifically enforced, injunction can be refused. He submitted that, the

Trial Court has rightly taken into consideration and applied both the said

sections to the present case while refusing to grant injunction in favour of

the Appellant. He submitted that, if now injunction is granted, the

determinable contract would be revived, which is not permissible under the

law. That, clause No. 19 of the License Agreement provides for termination

of the said License Agreement. He submitted that, a license cannot be

equated with a lease and a license can any time be terminated by following

necessary procedure. That, Clause No. 18 of the License Agreement would

not amount to waiver of contract to permit the use of trade marks. That,

not availing royalty would not amount to waiver of contract by Respondent

No.1. He submitted that, the finding of the Trial Court in para No.9 of the

impugned Order is correct and no interference of this Court is therefore

necessary.

He submitted that, an interim relief can be granted only in aid

of and as ancillary to the main relief which may be available to the parties

on final determination of its rights in a suit or proceedings. That, in the

matter of company affairs, the Directors act as a body and collectively as

Board. Any Director acting individually has no power to act on behalf of

the company in respect of any matter except to the extent to which any

ssm 24 aost3938.20-Judgment.doc

power or powers of the Board have been delegated to him by the Board

within the limit permitted by the Companies Act or any other law. He

submitted that, 'Oral Agreement' of company is not permissible. At the cost

of repetition he submitted that, before executing the License Agreement

dated 6th December, 2014, the Appellant and Respondent company had

passed necessary resolutions (page 773 and 775 to the Appeal) and

therefore, contention of the Appellant that there was an 'Oral License' for

perpetuity to use trade marks of Respondent is contrary to the provisions of

law and therefore, the plea of 'Oral Agreement' in the present case cannot

be accepted.

He submitted that, in the present case, the 'License Agreement'

dated 6th December, 2014 between the parties, was a written agreement

and therefore, the parties are bound by the terms and conditions of the said

agreement. That, once a contract is reduced to writing by operation of

Section 91 of the Evidence Act, it is not open to any of the parties to seek to

prove the terms of the contract with reference to some 'oral or other'

documentary evidence to find out the intention of the parties. He placed

reliance on para No.7 of the decision of Hon'ble Supreme Court in the case

of Tamil Nadu Electricity Board & Anr. Vs. N. Raju Reddiar & Anr. reported

in (1996) 4 SCC 551 and; in support of his contention.

He submitted that, this Court in the case of Malhotra

International Pvt. Ltd. & Anr. Vs. Vidyut Metallics Ltd. reported in 1998(1)

ssm 25 aost3938.20-Judgment.doc

Bom.C.R.351 has held that, there can be no perpetual user license. That,

owner of the trade mark must keep control over the trade mark with regard

to quality and misuse. In view of above, he prayed that, no injunction be

granted in favour of the Appellant and the Appeal may be dismissed.

Mr. Gorwadkar, learned counsel for the Respondent No.1 in

support of his submissions relied on the following decisions-

i) Maria Margarida Sequeira Fernandes & Ors. Vs. Erasmo Jack De Sequeira (Dead) through LRs. reported in (2012) 5 SCC 370;

ii) Gujarat Bottling Co. Ltd. & Ors. Vs. Coca Cola Co. & Ors. reported in (1995) 5 SCC 545;

iii) Spice Digital Ltd. Vs. Vistaas Digital Media Pvt. Ltd., reported in 2012 SCC OnLine Bom 1536: (2012) 114 (6) Bom LR 3696;

iv) Indian Oil Corporation Ltd. Vs. Amritsar Gas Service & Ors. reported in (1991) 1 SCC 533;

v) Cotton Corporation of India Ltd. Vs. United Industrial Bank Limited & Ors. reported in (1983) 4 SCC 625;

vi) Shubh Shanti Services Ltd. Vs. Manjula S. Agarwalla & Ors., reported in (2005) 5 SCC 30;

vii) Tamil Nadu Electricity Board & Anr. Vs. N. Raju Reddiar & Anr.

reported in (1996) 4 SCC 551;

viii) Malhotra International Pvt. Ltd. & Anr. Vs. Vidyut Metallics Ltd.

reported in 1998(1) Bom.C.R.351 9 In rejoinder to the arguments advanced by the learned counsel

for the Respondent, Dr. Chandrachud, learned counsel for the Appellant

submitted that, in the case of Ram Sarup Gupta (Dead) by LRs Vs. Bishun

Narain Inter College & Ors. (Supra) , the Supreme Court has held that, the

ssm 26 aost3938.20-Judgment.doc

pleadings should receive a liberal construction and no pedantic approach

should be adopted to defeat justice on hair splitting technicalities.

That some times, pleadings are expressed in words which may not expressly

make out a case in accordance with strict approach of law. He submitted

that, the view adopted by the learned Single Judge in the case of Malhotra

International Pvt. Ltd. & Anr. Vs. Vidyut Metallics Ltd. (Supra) is not a

correct view. He submitted that, in the case of Gujarat Bottling Co. Ltd. &

Ors. Vs.Coca Cola Co. & Ors. (Supra) the Supreme Court has held that,

'Oral License' of trade mark is permissible.

Dr. Chandrachud submitted that, the word 'assignment' or

'vesting' used in the plaint is a mistake by the Appellant and it ought to be

"License". He submitted that, in reply to the Interim Application No.897 of

2020 in Commercial IP Suit No.309 of 2020, a proper plea to that effect

contending that use of trade marks by the Appellant in furtherance of

perpetual 'Oral License' has been adopted. He submitted that, usage of

word 'vesting' in the plaint by Appellant is a mistake in pleading. That, in

the case of S.B. Noronah Vs. Prem Kumari Khanna (Supra) the Hon'ble

Supreme Court has held that, common sense approach should be taken to

technical defects in the pleadings and that, the pleadings are not statutes

and legalism is not verbalism. He submitted that, substantive pleadings in

para Nos.5e, 6 and 7 of the plaint has been taken and no defect in the

pleadings of the Appellant as per the said two Judgments be inferred. He

ssm 27 aost3938.20-Judgment.doc

submitted that, in para Nos. 6, 13A and 13E of the reply to the Interim

Application No.897 of 2020, the plea of 'Oral License' has been properly

taken by the Appellant. He submitted that, Companies can enter into 'Oral

Contract'. He placed reliance on a decision in the case of Shankarlal

Narayandas Mundade Vs. New Mofussil Company Ltd. & Ors. (Supra) in

support of his case. He submitted that, in the present case, the

Respondents' companies are closely held and the Directors and the

companies is one and the same.

While reiterating his contention he submitted that, the License

Agreement dated 6th December, 2014 was and is a sham document, which

was not to be acted upon. He submitted that, if the License Agreement

dated 6th December, 2014 had come to an end in the year 2016 itself, then

why the Respondents waited for more than one and a half year to send a

notice dated 3rd May, 2018 of termination of the said License Agreement.

He submitted that, it therefore can be inferred that the said License

Agreement was executed only to, not to act upon it and not otherwise. He

therefore, prayed that, the present Appeal may be allowed in its entirety.

10 A bare perusal of the Share Purchase Agreement dated 2 nd

August, 2014 executed between the Appellant and Respondent No.2

(Purchaser), by which the Respondents purchased 33.34% shares of

Appellant company and in particular para No.(D) on internal page No.3

thereof would reveal that, the Appellant has admitted that the Respondents

ssm 28 aost3938.20-Judgment.doc

are in the similar business i.e. of manufacturing and bottling of Country

Liquor since 40 years and have expertise in marketing, manufacturing and

management of Country Liquor business all over Maharashtra and also has

multiple units under its operations. That, both the parties therein had

discussion about doing the business together under the running business of

Appellant and in pursuance thereof, the parties who were desirous of

entering into the said Share Purchase Agreement on the terms and

conditions agreed between them and has more elaborately specified

therein.

It is to be noted here that, there is no clause or covenant in the

said entire agreement permitting the Appellant to use the said three trade

marks and copy rights of the said three labels which are admittedly owned

by the Respondents. There is no clause of oral license or even oral

assignment or verbal assignment in the said agreement. It is to be further

noted here that, during the course of his arguments on 11 th August, 2021,

Dr. Chandrachud, learned counsel for the Appellant, in response to the

query by this Court, with his usual fairness at his command, conceded to

the fact that, there is no clause in Share Purchase Agreement to use the

trade marks of Respondent No.1 and it is only by way of License Agreement

dated 6th December, 2014. It is thus an admitted fact on record that, the

Share Purchase Agreement does not give any right to use trade marks

owned and labels owned by Respondents, by the Appellant.

 ssm                                        29           aost3938.20-Judgment.doc

11          The document which had given right to the Appellant to use

the said three trade marks and labels owned by Respondents, is the License

Agreement dated 6th December, 2014 (Page 233). Perusal of the said

Agreement would reveal that, it was for specific period of two years from

the date of execution of it. By the said Agreement, the Respondent No.1

licensor had given 'non-exclusive license' to use the trade marks and labels

in respect of the said goods to the Appellant licensee. That, the licensee

had agreed to accept 'non-exclusive license' to use the said trade marks and

labels in relation to the said goods on the terms and conditions more

specifically agreed by and between the parties and more specifically set out

in the said Agreement. Clause No.17 to the said Agreement categorically

specifies that, the licensee (Appellant) shall not use the said labels/trade

marks/ copyrights after the expiry or the termination of the said

Agreement. Clause No.19 provides that, the licensor may without assigning

reason thereof and without being liable in any way for payment of damages

or other compensation whatsoever, terminate the said Agreement upon

giving not less than thirty days prior notice in writing in that behalf to the

licensee. In Clause No.22 the licensee had agreed that, upon the expiry or

termination of the said Agreement for any reason whatsoever, the licensee

(Appellant) shall discontinue any and every use whatsoever of the said

labels/trade marks/copyrights in connection with the said goods or business

or trade or as a trade mark, corporate name or as a part of trade name or as

ssm 30 aost3938.20-Judgment.doc

also of any other word, name, logo, devise in any alphabet, script or

language which may resemble the said labels so as to cause deception or

adversely affect right, title or interest of the licensor (Respondents) in the

said labels/trade marks/copyrights. Clause No.26 thereof categorically

mentions that, the said Agreement constitutes the entire agreement of the

parties on the subject mentioned therein and supersedes all prior

understanding and instructions on such subject. That, the said agreement

shall not be modified other than by a written instrument duly executed by

the parties herein. It is thus abundantly clear that, the parties herein to the

present Appeal are governed by the said License Agreement dated 6 th

December, 2014 and not otherwise.

12 In this background, it is to be noted here that, by a

notice/letter dated 3rd November, 2019 the Respondent No.1 called upon

the Appellant to suspend the production of the said three products and its

dispatch with immediate effect. It was a cease and desist notice to the

Appellant by the Respondent No.1. It is the said notice/letter dated 3 rd

November, 2019 which gave rise for a cause of action for the Appellant to

file the present suit bearing Special Civil Suit No.95 of 2020. In para

No.5(e) of the plaint, the Appellant has specifically pleaded that, after

acquisition of shares by the Respondents of Appellant company, the labels

will 'vest' non-exclusively with the Appellant along with the Respondent

No.1. In para No.7 of rejoinder affidavit to the reply filed by Respondents

ssm 31 aost3938.20-Judgment.doc

below Exh-5, the Appellant has claimed perpetual right to manufacture and

use the trade marks and labels in question, upon a 'verbal assignment'. In

the Appeal memo before this Court, in ground Nos.(d), (eee) and (fff) a

case of assignment of labels/verbal assignment has been put forth. It is to

be noted here that, no case for 'oral license' is pleaded in the plaint either

before the Trial Court or in Appeal memo before this Court. It clearly

appears that, it is for the first time the case of 'oral license' is pleaded orally

before this Court in this Appeal and in reply to the Interim Application

No.897 of 2020, only to overcome the disability in the pleadings in the

plaint before the Trial Court and in defence to the Suit filed by the

Respondents and to defeat the arguments of Respondents herein and none

else.

13 The Supreme Court in the case of Maria M. Sequeira Fernandes

& Ors. (Supra) has categorically held that, pleadings are the foundation of

litigation. In pleadings, only the necessary and relevant material must be

included and unnecessary and irrelevant material must be excluded.

Pleadings are given utmost importance in similar systems of adjudication,

such as, the United Kingdom and the United States of America. It is further

held that, in civil cases, pleadings are extremely important for ascertaining

the title and possession of the property in question. In the case of Roop

Kumar Vs. Mohan Thedani (Supra) the Hon'ble Supreme Court has held

that, it is likewise a general and most inflexible rule that wherever written

ssm 32 aost3938.20-Judgment.doc

instruments are appointed, either by the requirement of law, or by the

contract of the parties, to be the repositories and memorials of truth, any

other evidence is excluded from being used either as a substitute for such

instruments, or to contradict or alter them. This is a matter both of

principle and policy. It is of principle because such instruments are in their

own nature and origin, entitled to a much higher degree of credit than

parol evidence. It is of policy because it would be attended with great

mischief if those instruments, upon which men's rights depended, were

liable to be impeached by loose collateral evidence.

In the case of Tamil Nadu Electricity Board & Anr. Vs. N. Raju

Reddiar & Anr. (Supra), the Supreme Court in para No.7 has held as under:-

"7. At the outset it must be borne in mind that the agreement between the parties was a written agreement and therefore the parties are bound by the terms and conditions of the agreement. Once a contract is reduced to writing, by operation of Section 91 of the Evidence Act, 1872 it is not open to any of the parties to seek to prove the terms of the contract with reference to some oral or other documentary evidence to find out the intention of the parties. Under Section 92 of the Evidence Act where the written instrument appears to contain the whole terms of the contract then parties to the contract are not entitled to lead any oral evidence to ascertain the terms of the contract. It is only when the written contract does not contain the whole of the agreement between the parties and there is any ambiguity then oral evidence is permissible to

ssm 33 aost3938.20-Judgment.doc

prove the other conditions which also must not be inconsistent with the written contract."

14 In the present case, it is the precise case of the Appellant in

para No.12 of the plaint itself that, at the time of execution of Share

Purchase Agreement and License Agreement, legal due-diligence by the

legal experts of the entire structing of the business of the Appellant was

taken when a question as to the exploitation of the labels of the said three

brands arose. In para No.13, it is specifically pleaded that, as per the advice

of the legal advisors, the present License Agreement came to be prepared in

the month of December 2014. It is thus absolutely clear that, the

documents in question and more particularly the License Agreement has

been drafted after taking necessary legal advice in that behalf. It is to be

further noted here that, plaint of the present suit has been drafted by an

Advocate an expert in the field of intellectual property and not by a layman

and therefore liberal construction of pleadings in the plaint as contended by

the learned counsel for the Appellant cannot be given to it. In view thereof,

the extensive and elaborate arguments about 'oral license' and lack of

pleading to that effect in the plaint and Appeal Memo including the

decisions cited by the learned counsel for the Appellant in cases of Ram

Sarup Gupta Vs. Bishun Narain Inter College & Ors. (Supra) and S.B.

Noronah Vs. Prem Kumari Khanna (Supra) are of no avail to it.

15          Even otherwise, the plea of 'oral license' was not taken and



 ssm                                         34           aost3938.20-Judgment.doc

argued before the Trial Court at the first instance and therefore the Trial

Court did not get an opportunity to test it on the basis of the

documents/material produced before it. Appellant will have to prove the

case of 'oral agreement' by leading cogent evidence at the time of trial. In

the presence of written agreement i.e. License Agreement dated 6 th

December, 2014 duly executed by and between the parties herein, it is very

difficult to even infer such an 'oral agreement'. As noted earlier, except only

the statements/arguments before this Court and in reply to the Interim

Application, the entire record is absolutely silent about existence of any

'oral agreement' between the parties herein. The conduct of parties herein

prima facie shows that, they were acting in furtherance of License

Agreement dated 6th December, 2014. It is important to note here that,

before execution of the License Agreement, the Board of Directors of

Respondent No.1 so also the Appellant had passed necessary resolutions on

3rd December, 2014 for executing the said agreement. The said resolutions

are on record at page Nos.773 and 775 respectively. As noted earlier, in the

present case, the agreement between the parties is reduced in writing and

therefore there is no need to even consider the plea of 'oral license' which

has been adopted at a belated stage only to overcome the disability of the

basic pleadings. According to this Court, the plea of 'oral license' adopted

by Appellant is a totally sham plea, contrary to its basic pleadings.

16           By the said License Agreement dated 6 th December, 2014, the


 ssm                                           35       aost3938.20-Judgment.doc

Appellant was granted a non-exclusive license to use the said labels and

trade marks by the Respondent No.1 for the said goods. The said

agreement was for a period of 2 years from the date of its execution.

Clause No.19 of the said agreement specifically provides for termination of

it at the behest of Respondents without assigning any reasons thereof.

Though as per Clause No.19 of the said License Agreement the Respondent

No.1 was not obliged to give any reason for termination of the said

Agreement, according to this Court perusal of pleadings, would clearly

indicate that, the Respondents have given not only a valid but genuine

reason of production of inferior quality of goods by the Appellant, for

termination of said Agreement. Thus, the said agreement was and is a

determinable contract and therefore Section 14(d) of the Specific Relief Act

is squarely applicable to the present case.

It prima facie appears to this Court that, the License Agreement

dated 6th December, 2014 is not a 'sham document', but a true and genuine

document, under which the right to use trade marks and labels of

Respondents was given to the Appellant. The said Agreement has been

acted upon by the Appellant for production of said goods by using the

trademarks of Respondent No.1. There is no other document, least to say

'Oral Agreement/License' given by the Respondents to the Appellant as

contended by it and the said contention has no legal sanctity at least as of

today.

 ssm                                        36            aost3938.20-Judgment.doc

17          A useful reference at this stage can be made to the decision of

the Hon'ble Supreme Court in the case of Mumbai International Airport

Private Limited Vs. Golden Chariot Airport & Anr., reported in (2010) 10

SCC 422. The Hon'ble Supreme Court while considering an issue that, can

a litigant change and choose its stand to suit its convenience and prolong a

civil litigation on such prevaricated pleas?; Is an action at law a game of

chess?, has held that, the common law doctrine prohibiting approbation

and reprobation is a facet of the law of estoppel and well established in our

jurisprudence also. That, the doctrine of election was discussed by Lord

Blackburn in the decision of the House of Lords in Scarf Vs. Jardine has

been referred too in the said decision. That, the rule of estoppel was

founded on a well-known principle that one cannot approbate and

reprobate. The Supreme Court has referred to a decision of the Division

Bench of Calcutta High Court in Dwijendra Narain Roy v. Joges Chandra De

reported in AIR 1924 Cal. 600, wherein it is held that, it is an elementary

rule that a party litigant cannot be permitted to assume inconsistent

positions in Court, to play fast and loose, to blow hot and cold, to approbate

and reprobate to the detriment of his opponent. This wholesome doctrine,

applies not only to successive stages of the same suit, but also to another

suit than the one in which the position was taken up, provided the second

suit grows out of the judgment in the first.

In paragraph Nos.43, 44, 45, 47, 48, 49, 50 and 54 in the case

ssm 37 aost3938.20-Judgment.doc

of Mumbai International Airport Private Limited (Supra), it is observed and

held by the Supreme Court as under:-

43. Now the question is whether the contesting respondent on a complete volte-face of its previous stand can urge its case of irrevocable licence before the Estate Officer and now before this Court? The answer has to be firmly in the negative.

44. Is an action at law a game of chess? Can a litigant change and choose its stand to suit its convenience and prolong a civil litigation on such prevaricated pleas?

45. The common law doctrine prohibiting approbation and reprobation is a facet of the law of estoppel and well established in our jurisprudence also. The doctrine of election was discussed by Lord Blackburn in the decision of the House of Lords in Scarf v. Jardine (1882) 7 AC 345 : (1881-85), All ER Rep 651 (HL) wherein the learned Lord formulated -

"...a party in his own mind has thought that he would choose one of two remedies, even though he has written it down on a memorandum or has indicated it in some other way, that alone will not bind him; but so soon as he has not only determined to follow one of his remedies but has communicated it to the other side in such a way as to lead the opposite party to believe that he has made that choice, he has completed his election and can go no further; and whether he intended it or not, if he has done an unequivocal act...the fact of his having done that unequivocal act to the knowledge of the persons concerned

ssm 38 aost3938.20-Judgment.doc

is an election."

47. In Clough v. London and North Western Rail Co. (1861-73) All ER Rep 646, the Court referred at All ER p. 651 F to Comyn's Digest, wherein it has been stated:

"If a man once determines his election, it shall be determined forever."

In the said case, the question was whether in a contract of fraud, whether the person on whom the fraud was practiced had elected to avoid the contract or not. The Court held that as long as such party made no election, it retained the right to determine it either way, subject to the fact that an innocent third party must not have acquired an interest in the property while the former party is deliberating. If a third party has acquired such an interest, the party who was deliberating will lose its right to rescind the contract. Once such party makes its election, it is bound to its election forever.

48. In Harrison v. Wells (1967) 1 EB 263 : (1966) 3 WLR 686:

(1966) 3 ALL ER 524 (CA) Salmon L.J., in the Court of Appeal, observed that the rule of estoppel was founded on the well-known principle that one cannot approbate and reprobate. The doctrine was further explained by Salmon, L.J. by holding:

"it is founded also on this consideration, that it would be unjust to allow the man who has taken full advantage of a lease to come forward and seek to evade his obligations under the lease by denying that the purported landlord was the landlord".

49. In Kok Hoong v. Leong Cheong Kweng Mines Ltd. 1964 AC

ssm 39 aost3938.20-Judgment.doc

993, the Privy Council held that:

"...a litigant may be shown to have acted positively in the face of the court, making an election and procuring from it an order affecting others apart from himself, in such circumstances that the court has no option but to hold him to his conduct and refuse to start again on the basis that he has abandoned."

50. Ashutosh Mookerjee, J. speaking for the Division Bench of Calcutta High Court in Dwijendra Narain Roy v. Joges Chandra De, AIR 1924 Cal. 600, held that it is an elementary rule that a party litigant cannot be permitted to assume inconsistent positions in Court, to play fast and loose, to blow hot and cold, to approbate and reprobate to the detriment of his opponent. This wholesome doctrine, the learned Judge held, applies not only to successive stages of the same suit, but also to another suit than the one in which the position was taken up, provided the second suit grows out of the judgment in the first.

54. In New Bihar Biri Leaves Co. v. State of Bihar (1981) 1 SCC 537, this Court observed that it is a fundamental principle of general application that if a person of his own accord, accepts a contract on certain terms and works out the contract, he cannot be allowed to adhere to and abide by some of the terms of the contract which proved advantageous to him and repudiate the other terms of the same contract which might be disadvantageous to him. The maxim, qui approbat non reprobat (one who approbates cannot reprobate), applies in our laws too.

In the present case also, the conduct of the Appellant in view of

ssm 40 aost3938.20-Judgment.doc

its inconsistent pleas before the Trial Court and before this Court is far from

satisfactory. The said pleas are inconsistent, contrary to each other and

detriment of its opponent.

It appears to this Court that, the Appellant is changing stances

convenient to it, by adopting different pleas at different stages of the

litigation and is not consistent with its basic pleading. It is highly

unconscionable that, the Appellant in furtherance of License Agreement

dated 6th December 2014, after using the trademarks/labels of Respondent

No.1 for a substantial period, now at such a belated stage i.e. in present

Appeal has for the first time adopted a spacious plea of 'oral/verbal license'.

According to this Court, the plea of Appellant of 'Oral License', is a palpably

sham plea adopted by it after hearing the Respondents' arguments and as

an afterthought.

18 It is the case of the Appellant that, it has right to manufacture

the said goods by using trade marks of Respondents and its vesting is for

perpetuity. It is inter alia contended that, the Appellant has perpetual rights

to use the said trade marks for the said goods by virtue of 'Oral assignment'.

Section 2(b) of the Trade Marks Act defines "assignment" means an

assignment in writing by act of the parties concerned. Section 25 of the

said Act mentions that, the registration of a trade mark, after the

commencement of the said Act, shall be for a period of ten years, but may

be renewed from time to time in accordance with the provisions of the said

ssm 41 aost3938.20-Judgment.doc

Section. The Trade Marks Act does not provide for any 'oral assignment'

and therefore, there cannot be any perpetual license or assignment/vesting

of the said trade marks with the Appellant. In the presence of written

license agreement dated 6th December, 2014, there cannot be any oral

license even as per the general law. The thing which Respondents and in

particular, Respondent No.1 under the law cannot have, it cannot give to

the Appellant.

19 The aforestated deliberation would lead to draw a clear and

safe conclusion that, the Appellant has no prima facie case in its favour. As

the Appellant has, in the alternative prayed for liquidated

damages/monetary compensation, no irreparable loss would be caused to

it, if injunction is refused in its favour. The balance of convenience does not

tilt in favour of Appellant. The Appellant is therefore not entitled for

temporary injunction.

Perusal of record discloses that, the Trial Court has not

committed any error either on facts or in law, while passing the impugned

Order dated 25th February, 2020.

The Appeal being dehors of merits is accordingly dismissed.

20 In view of dismissal of Appeal from Order itself, nothing

survives in Interim Application No.2694 of 2020 and is also accordingly

disposed off.

                                                               (A.S. GADKARI, J.)
            Digitally signed
            by SANJIV
SANJIV      SHARNAPPA
SHARNAPPA
MASHALKAR
            MASHALKAR
            Date: 2022.06.06

            16:57:24 +0530