Jayaram Banan vs Gurcharan Singh Chndhok
1994 Latest Caselaw 624 Del

JUDGMENT

Vijender Jain, J.

1. This is an application under Section 106 of the Trade and Merchandise Marks Act, 1958 read with Section 151 and Order 39 Rules 1 and 2 of the Code of Civil Procedure restraining the defendants from using the name 'The Sagar' (South Indian Vegetarian Paradise) and the logo identical which are similar to the plaintiff's logo in respect of defendants' restaurant at 3F, Kamla Nagar and Laxmi Nagar and from using the said logo in relation to any other restaurant which the defendants might open with the name 'The Sagar'.

2. Mr. Rao learned Counsel for the plaintiff has argued that since 1986 the plaintiff is using the trade name 'The Sagar' (South Indian Veg. Paradise) in relation to the restaurant run by him at 18, defense Colony Market, New Delhi. The case of the plaintiff is that initially these premises were taken over on license basis from a restaurant 'Shahnaz' which later on was purchased by the plaintiff. It is the case of the plaintiff that the food articles offered for sale and consumption at the said restaurant are exclusively ethnic and authentic South Indian Vegetarian delicacies. All the items are prepared by expert South Indian cooks. The case of the plaintiff further is that on account of the quality of its serving food the customers were patronizing the restaurant and 'The Sagar' restaurant has established a reputation for itself and the trade name and the logo of the plaintiff on account of its popularity and the user become distinctive in relation to the plaintiff's restaurant and South Indian Vegetarian articles. Mr. Rao has also argued that the plaintiff advertised 'The Sagar' restaurant at 18, defense Colony Market, New Delhi from 1987 onwards. According to him the business with the name 'The Sagar' at 18, defense Colony, New Delhi has been registered by Delhi Sales Tax Department and in relation to this number of notices under the Delhi Sales Tax have been received by the plaintiff. It is further contended by the learned Counsel for the plaintiff that from 6.8.1991 the plaintiff had started another restaurant with the name 'The Sagar Ratna' at Lodhi Hotel which is a unit of the Indian Tourism Development Corporation, and is running the said restaurant on license basis. The plaintiff is only catering to South Indian Vegetarian food. The plaintiff has also opened a restaurant 'The Sagar' in Malviya Nagar. According to plaintiff on 14.5.1989 said premises 3F, Kamla Nagar, Delhi was taken by him along with another person belonging to the defendants to run the restaurant at Kamla Nagar and on 4.11.1989 the premises were surrendered, the premises were handed over to the defendant from whom the premises were taken on lease/license. Mr.Rao has

further argued that in the cancellation agreement which is at page 62 of the documents file of the defendant there was stipulation that the defendants will not commence and run a restaurant business or any other allied business in the said premises for a period of 7 years from the date of the execution of the said agreement. The plaintiff instituted the suit when he came to know through an advertisement on 3.11.1993 that 'The Sagar' (South Indian Vegetarian Paradise) was to be opened at Laxmi Nagar crossing. It was also stated in the said advertisement that shortly it will be opening a similar Restaurant at Town Park, Sector 12, Faridabad also. On enquiry it was revealed that it was the defendant who was going to open the said restaurants. Later on, plaintiff discussed the matter with the defendant he was told that the defendants had been running the restaurant at 3F, Kamla Nagar under the name 'The Sagar'. Mr.Rao has further contended that the partnership pursuant to which premises at Kamla Nagar was taken, between the plaintiff and one Shri Sham Lal Gupta was executed on 1.5.1989. In the said partnership deed it was stipulated that the parties wanted to take a restaurant on lease/license basis to run the same in partnership and parties have approached M/s. Chandhiok Syndicate, defendant herein, owner of restaurant at 3F Kamla Nagar ground floor to give the restaurant on lease/license basis. It was also stated in the said partnership agreement that said M/s. Chandhiok Syndicate in principle had agreed to give the said restaurant at 3F, Kamla Nagar, Delhi on license basis. Clause 3 of the partnership deed reads as under:

"That the business of the firm shall be to run a restaurant at 3F, KanJa Nagar, Delhi"

3. Mr. Rao has contended that once the license obtained to run the restaurant from the defendant was surrendered to the defendants on 4.11.1989 the partnership came to an end by virtue of the provisions of Section 42 of the Partnership Act and thereafter there was no partnership between the plaintiff and the said Sham Lal Gupta. The case of the defendants as set out by them is that after the premises were surrendered by virtue of the partnership deed comprising of plaintiff and Sham Lal Gupta on 14.11.1989 the defendant was to run the restaurant and the firm M/s R.S. Associates was to supply the food. M/s. K.S. Associates was the name of partnership launched by plaintiff and Sham Lal Cupta to run the business of restaurant at 3F, Kamla Nagar after taking the premises on license from the defendants. According to Mr. Bhatia, learned Counsel for the defendants the agreement dated 14.11.1989 was signed by the plaintiff. Plaintiff has denied signing the said agreement. His stand is that signatures are forged on the agreement. Thereafter on the same terms and conditions, the same agreement was executed on 16.11.1989 on stamp paper between defendant and R.S. Associates the partnership concern through its partners the plaintiff and Sham Lal Gupta. This agreement, however, had admittedly not been signed by the plaintiff. It is the case of the defendant that on 26.6.1991 an agreement cancelling the agreement of 16.11.1989 was entered between the defendants and Shri S.L.Gupta who had signed on his behalf as a partner of M/s. R.S. Associates as also on the authority to represent the said partnership concern singularly. In the recital of the said agreement it has been mentioned that due to unforeseen reasons the second party has not been able to supply food to the first party restaurant with effect from 26.5.1991 and, therefore, the agreement entered on 16.11.1989 has to be cancelled.

4. The case of the defendant is that after cancelling the agreement a deed of assignment of Trade name 'Sagar' was executed on the same day by M/s. R.S. Associates and the defendant. Mr. Bhatia invited the attention of this Court to the deed of assignment of business purported to have been signed by the plaintiff and said Shri S.L. Gupta in favor of the defendants. According to the said assignment deed which is dated 26.6.1991 a sum of Rs. 2 lakhs was paid by the defendants to said M/s. R.S. Associates, the detail thereof is given in the said deed of assignment and all rights, title and interest in the running business of the restaurant 'The Sagar' at 3F Kamla Nagar, Delhi, good-will of business, trade name with logo, kitchen know-how (South Indian) and establishment were transferred to the Assignee to hold the same absolutely. Mr. Bhatia has argued that in view of deeds of assignment even if the defendant is using the trade name his user by the defendant is of an honest concurrent user of the trade name and logo 'The Sagar' (South Indian Paradise). He has further contended that in any case the plaintiff has acquiesced to the running of the restaurant 'The Sagar' by the defendants. Mr. Bhatia has further argued that the suit is not maintainable as no suit can be filed in relation to an unregistered trade mark particularly when the defendant is an honest and concurrent user of the said trade name. Mr. Bhatia has also stated that in pursuance of the agreement dated 16.11.1989 payments were made to the firm M/s. R.S. Associates of which the plaintiff was a partner. According to him by the instrument of surrender dated 4.11.1989 the license premises were surrendered to the defendants but he had no notice of the dissolution of the firm R.S. Associates. In alternative he has argued that even if it is assumed that there was no partnership between the plaintiff and said S.L.Gupta, still the trade mark or the trade name 'The Sagar' was the property of both the partners and said S.L.Gupta had authority to deal with the said trade name. Mr. Bhatia has cited in his support Sohan Lal and Ors. v. Amin Chand and Sons and Ors., , Bhikusa Yamasa Kshatriya Pvt. Ltd. v. Jagannath Bhikusa Kshatriya and Ors., and Habib Bank Limited v. Habib Bank A.G. Zurich (Supra) dealt with a case where trade mark was the property of the partnership firm and Supreme Court was dealing with the rights of legal heirs of the deceased partners. while deciding the application regarding the bar of Civil Court on the finding of the Court below that the Civil Court has no jurisdiction to entertain the suit set aside the order keeping in view that the defendants were resiling from the agreement which was in vogue for 20 years. Both these authorities do not help the case of the defendants. Mr. Bhatia has also stated that the plaintiff has not complied with the requirements of Order 39 Rule 3 CPC. Any expression of opinion at this stage by me would affect the merit of the case set up by the parties. This Court has to find out the intent and purpose of firm M/s. R.S. Associates from the partnership deed on record to come to a prima facie opinion for confirming or vacating reversing the injunction order. The partnership deed dated 1.5.1989 is between the plaintiff and S.L. Gupta. From the contents and tenor of the partnership deed it is apparent that what the partners intended was to take restaurant on lease/license basis and to run the same in partnership. The partnership deed specifically mentions that in this connection they had met the defendant who was prepared to give the restaurant at 3F, Kamla Nagar, Delhi on lease/license basis as noted earlier. In paragraph 3 the object and purport of the partnership business has been stated to be to run the restaurant at 3F

Kamla Nagar, Delhi. Although paragraph 4 of the partnership deed further provides that the partnership business shall be carried on at Delhi and/or such places as the parties may mutually agree upon from time to time. But what is important which has not been highlighted before me by either Counsel of the parties is Clause 13 of the partnership deed which, inter alia, reads as under:--

"That the duration of above partnership shall be till the duration of license agreement at 3F Kamla Nagar, Delhi."

5. That being the case when the parties voluntarily had agreed that the partnership shall be in vogue till the license agreement is in force at 3F Kamla Nagar, Delhi, Section 42 of the Partnership Act comes into play after lease/license was surrendered on 4.11.1989. That being the case any assignment deed executed by the said S.L.Gupta which according to the defendants has been signed by the plaintiff or agreement dated 14.11.1989 (though vehemently denied by the Counsel for the plaintiff) or any agreement dated 16.11.1989 after surrendering the premises at 3F Kamla Nagar of which the defendant had the notice is not of much use to the defendant. Mr. Rao has contended that the Assignment deed cannot be looked into by this Court and as a matter of fact the same should be impounded in terms of the provisions of the Stamp Act being insufficiently stamped. Even the agreement dated 14.11.89 and signing thereof by the plaintiff has been denied. In view of the fact that lease/license of premises at Kamla Nagar was surrendered on 4.11.89 by M/s. R.S. Associates thereby ending partnership between plaintiff and Sham Lal Gupta, the documents filed by the defendants do not inspire much confidence. The statement of bank accounts shown in the Court by the learned Counsel for the defendants showing payments to R.S. Associates is also not of much help to the defendants after 14.11.1989 when premises were surrendered in terms of the Surrender Deed and at that stage Clause 13 of the Partnership Deed came into play and partnership stood dissolved from that date. Even otherwise the possibility of connivance between defendants and said Sham Lal Gupta cannot be ruled out to the exclusion of the plaintiff.

6. In view of the observations made above, I confirm the injunction granted vide order dated 20th May, 1994. Nothing said above shall be an expression of opinion on the merit of the case. This application stands disposed of in terms of aforesaid order.

IA 7149/94

To be listed on 8th December, 1994.

S/1147/94

List this matter before JR on 14.12.1994 for admission and/or denial of documents.