Abro Industries Inc. vs K.V. International And Ors.
2004 Latest Caselaw 550 Del

JUDGMENT

Mukundakam Sharma, J.

1. The decree-holder has filed the present execution petition praying for execution of the decree for a sum of Rs. 35 lakhs together with interest thereon at the rate of 18% per annum from November 9, 2002 up to the date of payment and also the cost of taking out the execution.

2. The decree-holder/plaintiff No.1 filed a suit in this court against the judgment debtors/defendants seeking for a decree restraining passing of the goods of the defendants as that of the plaintiff and also for restraining infringement of copyright and also for a decree of rendition of accounts and for payment of damages. The subject-matter of the suit included misuse of the decree-holder's mark `ABRO' by the judgment debtors by use of the marks `ABRO' and `AMBRO'. During the pendency of the aforesaid suit in this court the parties arrived at a settlement out of court. The terms and conditions of settlement between the parties were recorded in a settlement deed executed between the parties. After arriving at the aforesaid settlement which is recorded in the settlement deed, a joint application was filed in this court by the plaintiff and the defendants who are the decree-holder and the judgment debtors, respectively, herein enclosing therewith a copy of the settlement deed. By order dated July 19, 2002, this Court passed a decree in the suit in terms of the settlement deed and also passed an order that the settlement deed would form part of the decree. Since the aforesaid decree based on the settlement deed is sought to be executed through this Court it would be necessary to extract a part of the said settlement deed which was made a part of the decree dated July 19, 2002.

3. Article 1(a) of the said settlement deed stipulated that the judgment debtors (parties of the second part) acknowledges the violation on their part of the rights and entitlements of the Abro Industries Inc./decree-holder and Elegant Industries (parties of the first part) resulting from use by the judgment debtors of the trade names, trademarks, labels and packages identical/deceptively similar to those of Abro Industries Inc. and Elegant Industries or which are imitation thereof, and wrongdoing on their part in representing themselves as connected or concerned with Abro Industries Inc. as agent, licensee or otherwise, which resulted in loss and damage to the business and reputation of Abro Industries Inc. and Elegant Industries and led to the disputes and the litigation. It was also stated in Article 1(b) of the said settlement deed that particulars of disclosure made by the judgment debtors were attached as Annexure `C' and that the said judgment debtors represented and confirmed that they never ever directly/indirectly manufactured, advertised and/or supplied any products with the trade mark ABRO. It was also confirmed by them that on their failure to make full, complete and correct disclosure therein in respect of the trademark AMBRO, and failure of their representation that they had never ever manufactured, advertised and supplied any products with the trademark ABRO would be a material default/breach of the settlement deed and the consequences attributable to such breach/default would immediately follow including execution of money decree as agreed to in the said settlement deed. In Article 4(c) of the settlement deed it was agreed to by the parties, which was also made a part of the decree, that the judgment debtors further jointly and severally agreed that a money decree in the sum of Rs.35 lakhs could be passed in favor of the decree-holder No.1. It was agreed that the execution of the said decree would be in the manner as provided as under:-

" The Parties of the Second Part (judgment debtors) jointly and severally agree to pay AII (Abro Industries Inc/decree holder) without any demur or protest the sum of Rs.35,00,000/- (Rupees Thirty Five Lacs), on the occurrence of a default by any of the Parties of the Second Part of any of the terms of this Deed as determined by AII in its sole discretion. The aforesaid amount of Rs.35,00,000/- (Rupees Thirty Five Lacs) shall be recoverable by AII under this decree on the occurrence of a default by any of the Parties of the Second Part of any of the terms of this Deed as determined by AII in its sole discretion. In such eventuality, before executing the decree through the competent court of law, AII will make a demand upon the Parties of the Second Part or any one or more of them, by serving upon them a notice, requiring them to make the full payment of the aforesaid decreetal amount of Rs.35,00,000/- within a week of the date of the notice. The notice will state that a default has occurred under the Deed (with or without specifying the particulars of the default) and the failure to comply with the said notice, shall entitle AII to execute the decree like any other money decree against the Parties of the Second Part. It is expressly understood between the Parties that the aforesaid money decree for payment of Rs.35,00,000/- on a default under this Deed is not to be understood or construed as a conditional decree in any manner....."

In Article 5 of the said settlement deed it was stipulated that the judgment debtors confirm that after the seizure of the infringed material from their factory by the local commissioner they did not have any more offending products, labels, cartons, blocks, literature, stationery or any other offending articles and material in their stock or possession for purpose of destruction/erasure by the Parties of the First Part. In Article 7 it was also stipulated that the judgment debtors agree and undertake that failure on the part of the judgment debtors or any of them to disclose full and correct particulars in any matter or making any misrepresentation or misstatement by the judgment debtors or any of them would be a default/breach of the settlement deed on the part of the judgment debtors and the consequences attributable to such breach/default would immediately follow including execution of money decree as agreed.

4. It is stated in the petition that the decree-holder came across a dispatch register of the judgment debtors and from the said register it was apparent that the judgment debtors were dealing and marketing also in products under the trademark ABRO. It was also pointed out that the judgment debtors have manipulated the said records and have given a wrong picture to the decree-holder. It is, therefore, contended that as the judgment debtors manipulated the records and did not disclose full and correct particulars and as they made a misrepresentation or misstatement which resulted in default/breach of the settlement deed, therefore, the decree-holder is entitled to get a decree of Rs.35,00,000/- in terms of the stipulation in the settlement deed. In support of the said contention the decree-holder has placed on record a copy of the dispatch register the original of which was produced before the Local Commissioner and which was signed by him and a copy of which was obtained by the decree-holder. On the prayer of the decree-holder the original dispatch register was called for by this court which was, however, no produced. However, during the course of arguments counsel appearing for the judgment debtors produced the original dispatch register which was received. My attention is drawn to page 2 of the said register. There appears a clear erasure of the word `ABRO' on the said page 2, whereas at page 3 there is a clear overwriting in the second entry. There was either a word `ABRO' or `AMBRO' on the said page which was erased and over it some other brand/trade name is written. Similarly, at page 5, `ABRO' brand is erased and in its place `QSS' brand is written by way of misstatement which is apparent on the face of the records and is indicated from the same, whereas at the bottom there is an entry `Ambro Brand' as against the total boxes 204. At page 23 also, in the third entry thereof showing packing of 192/box and total packages being 60 boxes, there is again erasure of either `ABRO' brand or `AMBRO' brand.

5. The aforesaid erasures and overwritings have been done by the judgment debtors by way of misrepresentation and misstatement and, therefore, it is held that the judgment debtors failed to disclose fully and correctly all particulars to the decree-holder and in view of the same the decree-holder becomes entitled to a decree for an amount of Rs. 35,00,000/- in terms of the stipulations in the settlement deed. It was a categorical statement coming from the judgment debtors, which is recorded in the settlement deed, that the judgment debtors had never ever directly/indirectly manufactured, advertised and/or supplied any products with the trademark `ABRO'. The said statement stands belied by the entries made in the aforesaid dispatch register of the judgment debtors. Therefore, to that extent also there is misrepresentation and misstatement by the judgment debtors and since they have failed to make full, complete and correct disclosures in respect of marks `ABRO' and `AMBRO', there is a material default and breach of the settlement deed which entitles the decree-holder to get a decree for an amount of Rs. 35,00,000/-.

6. In terms of the aforesaid discussions and observations, I accordingly hold that the decree-holder is entitled to a decree of Rs. 35,00,000/-.   In terms of the stipulations in the settlement deed, the said decree is executable by filing an execution petition in terms of which this execution petition is filed.    Accordingly, the judgment debtors are directed to file an affidavit in this court disclosing their assets to this court within eight weeks.   The decree-holder is also directed to submit a list of immovable/movable properties of the judgment debtors.
 

7. Renotify on 12th August, 2004.