M/S Sos Oil Seals Private Limited vs M/S Super Seals India Limited
2013 Latest Caselaw 2672 Del

*      IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                              Order Reserved on: March 06, 2013
                                               Order Pronounced on: July 01, 2013

+                      I.A. Nos.9820/2008 & 14658/2008
                       in CS (OS) No.2232/2006

       M/S SOS OIL SEALS PRIVATE LIMITED              ..... Plaintiff
                      Through  Mr.C.Mukund, Adv. with Mr.Gaurav
                               Kumar Singh, Adv.

                             versus

       M/S SUPER SEALS INDIA LIMITED                 ..... Defendant
                     Through   Ms.Anju Jain, Adv. with Mr. Hitesh
                               Sachar, Adv.

       CORAM:
       HON'BLE MR. JUSTICE MANMOHAN SINGH

MANMOHAN SINGH, J.

1. By this order, I propose to dispose of two applications under Order VI, Rule 17 read with Section 151 CPC; one filed by the plaintiff being I.A.No.14658/2008 for amendment of plaint, and second filed by the defendant being I.A.No.9820/2008 for amendment of written statement.

2. The plaintiff has filed the abovementioned suit seeking permanent injunction restraining infringement of trademark "SS" logo, passing off, rendition of accounts and damages against the defendant.

3. Firstly, I shall take up the application filed by the defendant being I.A.No.9820/2008 for amendment of written statement which was filed on 12th August, 2008 in which it is stated that the defendant has been using the trade mark "SSIL" since 1997. However, inadvertently, the defendant failed

to mention in the written statement that the trademark "SSIL" has been registered in the name of the defendant Company since 3 rd June, 1997. Hence, by means of this application, the defendant is seeking amendment of the written statement by adding para 3A in the written statement. The said para reads as under:-

"3A. That the trade mark "SSIL" has been registered in the name of Super Seals India Limited that is the defendant company from 3.06.1997 and the copy of the form O-2 issued by the trade mark registry, Mumbai evidencing the same is annexed herewith as ANNEXURE-D1.

The defendant company has been using their trade mark "SSIL" since 1997 uninterruptedly, whereas the alleged assignor of the logo "SS" to the plaintiff has been filed for fresh registration only in the year 2004. That the present suit is not maintainable under the provisions of section 29 of the Trade Marks Act, 1999."

4. The application is opposed by the plaintiff, inter-alia, on the ground that the use of the trademark "SSIL" since 1997 in respect of the seals business is contrary to the family settlement dated 27 th March, 1997. It is also stated that the amendment should not be allowed in the written statement, mainly, on the ground that the defendant Company first time disclosed in 2008 that the trademark "SSIL" is obtained by the defendant.

5. It is settled law that at the time of considering the application for amendment of the pleadings, the Court has not to go into the merit of the case. It is yet to be examined as to whether the use of the trademark "SSIL" by the defendant or to obtain the registration thereof is contrary to the family settlement or not. As far as the amendment of the written statement is concerned, the Court has to take a liberal view than the amendment of the

plaint. The defendant is merely seeking the amendment by placing the fact that it had obtained the registration of the trademark "SSIL" on record. The validity of the trademark will have to be examined as to whether it is similar to the trademark "SS" or not.

6. The Division Bench of this Court in the case of Usha International and another vs. Usha Television Limited, reported in 2002(25) PTC 184 (Del) (DB) has dealt with the similar aspect of the matter whereby the amendment was allowed by incorporating the registration obtained by a party. Paras 8 to 12 of the said judgment are necessary to be referred to. The same read as under:-

"8. The Court further observed that "it is well settled that the main considerations to be borne in mind in exercising the discretion are that the rules of procedure have no other aim than to facilitate the task of administering justice, that multiplicity of suits should be avoided and that the interest of substantial justice should be advanced."

9. Mr. Pravin Anand, the learned counsel for the appellants, also placed reliance on the judgment of the Madras High Court in A. Abdul Karim Sahib v. A. Shanmugha Mudaliar (1967 MLJ 468). The Court observed that "the statute law relating to infringement of trade mark is based on the same fundamental principles as the general law relating to passing off. Though there may be some procedural differences between the two actions, in substance and in effect an action for passing off can easily be telescoped into an action for infringement of trade mark and vice versa. Hence a suit instituted for an injunction restraining the defendant from marketing certain goods under a mark which is deceptively similar to the plaintiff's mark can be amended into one for infringement of trade mark under the Trade and Merchandise Marks Act, 1958 if the

plaintiff has obtained registration of his mark under the Act after the institution of the suit. Such an amendment will not change the cause of action and would only be in the nature of an alternative relief. In this judgment the Court also observed that by allowing the amendment multiplicity of suits are also avoided.

10. The Full Bench of the Madras High Court in Subramaniam v. Sundaram, (1963) 1 MLJ 113 considered the propriety of a Court taking note of subsequent events. It is no doubt true that a suit has to be decided on the facts and circumstances existing on the date of its institution, but circumstances do warrant a Court taking into consideration supervening events as well provided the justice of the case requires. The Full Bench observed that "the discretion of the Court, under its inherent powers, to adjust the parties on the basis of events happening after the starting of the action, is well recognised and accepted as a rule of justice, equity and good conscience. In some case, it is almost the duty of the Court to advert to the subsequent events brought to its notice lest it should fail to do substantial justice between the parties." The Full Bench considered the propriety of a Court taking note of subsequent events. It is no doubt true that a suit has to be decided on the facts and circumstances existing on the date of its institution, but circumstances do warrant a Court taking into consideration supervening events as well provided the justice of the case require.

11. In another case Lydia Margaret Santhanam and Anr. v. David Thamburaj and Anr., (1966) 1 MLJ 408 the Madras High Court held that "the test for allowing applications for amendment of plaints would be, not merely whether a new cause of action is introduced but whether if it is allowed, thereby the defense would in any way be prejudiced, either by deprivation of the plea of limitation or any other plea ... A new cause of action can well be allowed to be taken by way of an amendment provided it is an alternative plea."

12. In Nichhalbhai v. Jaswantlal, AIR 1966 SC 997 their Lordships of the Supreme Court observed that "if the amendment is refused the plaintiff may have to bring another suit and the object of the rule for allowing amendments to the plaint is to avoid multiplicity of suits."

7. In view of the above, the amendment application filed by the defendant is allowed.

8. With regard to the second application being I.A.No.14658/2008 filed by the plaintiff for amendment of the plaint, it is necessary to place the facts stated in the plaint as well as in the application. The same read as under:-

(i) It is submitted that a family settlement was executed and put into writing on 27th March, 1997. The effect and purport of the family settlement was to the effect that Kamal & Deepak Groups and/or their nominee(s), by virtue of the family settlement, have given up all right, title and interest in the Trade Mark "SS" absolutely and forever for use on products, packaging, advertising, marketing, stationery etc., and for which purpose, it has been agreed that Anil Group shall pay a total sum of `15 lacs as full and final consideration to Kamal & Deepak Groups. The deed of family settlement, more particularly Clause (5.1) read with Clause (5.2) clearly covenant that Kamal & Deepak Groups along with SSIL shall have no right, title or interest in the Trade Mark "SS" and to completely effectuate this understanding between the parties so as to confer complete rights qua the Trade Mark "SS" upon Anil Group, it was agreed in Clause (5.2) that Kamal & Deepak Groups as also SSIL may continue to use the Trade Mark "SS" on products until one year after the effective date, within which period SSIL shall delete the logo from the moulds. Clause (5.3) to Clause (5.7) of the deed of family settlement dated 27 th March, 1997 set out the modalities on which payment is to be made by Anil Group to Kamal & Deepak Groups, pursuant whereafter, Anil Group would have all right, title and interest in

the Trade Mark "SS" absolutely and without any interference from Kamal & Deepak Groups, in whatsoever manner.

(ii) The deed of family settlement dated 27th March, 1997 came to be approved by this Court in a Scheme of Arrangement between Deepak - Kamal Group and Anil Group namely SSIL and SSHL and recorded the same vide its order dated 21 st May, 1997 after what was stated by the parties under Sections 391 and 394 of the Companies Act, 1956 in C.P. No.67/1997. The Seals Division of SSIL stood transferred to SSHL (Anil Group) and by virtue of which transfer, the entire properties, assets, investments, claims, authorities etc. as well as the entire undertaking of the Seals Division stood vested with SSHL. Relevant extract of the order dated 21st May, 1997 is reproduced herein under:

"It is stated that a scheme of arrangement has been propounded whereunder the Seals Division of M/s. Super Seals India Limited (Transferor Company) will stand transferred to M/s. Super Seals Hydraulics Limited, and by which the entire properties, assets, investments, claims, authorities etc., as well as the entire undertaking of the Seals Division of the transferor company would vest with the transferee company. It has been propounded that all employees of the Seals Division of the transferor company will also become employees of the transferee company without any break or interruption in the service. The effective date is given as......."

(iii) Mr.Anil Talwar, pursuant to the absolute right acquired by him in the Seals business, profitably carried on the business activities in SOSIL up to the time of his untimely demise in January, 2001. At this point of time, Mr.Siddharth Talwar son of Late Mr.Anil Talwar shouldered the responsibility of carrying forward Anil Group's Seals business, which however, could not be effectively carried out by him and in the process, the entire business activities of Anil Group/SOSIL, suffered as a whole. Owing to mounting debt and receding capital assets, Mr.Siddharth Talwar passed on "Seals Business" acquired by Anil Group/SOSIL in favour of one M/s SOS Automotive

Components Private Limited (SOSACPL) with full right, title and interest accrued in the Trade Mark "SS". The Trade Mark "SS" indisputably had the reputation and goodwill in common law which coalesced with the business relating to the goods n respect of which the Trade Mark "SS" had been used and registered.

(iv) Thereafter, M/s SOS Automotive Components Private Limited upon becoming the owner of "Seals Business" and proprietor of the Trade Mark "SS" LOGO (which registration had earlier expired) instead applied for a fresh registration in the year 2004 in the name and style of "SS" LOGO under Application No.1310753. It is submitted that the application bearing No.1310753 for "SS" LOGO came to be registered with the Trade Mark Registry w.e.f. 2nd December, 2005.

(v) M/s SOS Automative Components Private Limited further assigned its Trade Mark "SS" Logo in favour of M/s SOS Oil Seals Private Limited, vide Deed of Assignment dated 20th January, 2006 along with full right, title and interest in the said Trade Mark which invariably coalesced with the business for which the Trade Mark has been used and registered.

(vi) It is submitted that the plaintiff at the time of manufacturing its seals in the year 2006 was shocked to know that the defendant Company too is indulging in seals business without any right, authority and permission from any quarters besides trading in seals in a deceptively similar name and style of "SSIL" if compared with plaintiff's registered Trade Mark "SS".

(vii) It is further submitted that the defendant Company, by virtue of family settlement dated 27th March, 1997 read with the order passed by the Court on 21st May, 1997 in CP No.67 of 1997 is completely estopped from indulging in manufacturing and trading in "Seals Business" and therefore, the seals business being carried out by the defendant Company is unjust enrichment at the cost and expense of the plaintiff Company.

(viii) As would be evident from what has been stated hereinabove, the entire "Seals Division" completely stood vested in the Anil Group/SSHL. The trading in seals business is in clear violation of the rights conferred upon Anil group. Kamal - Deepak

Group having backed out from the arrangement as set out in the deed of family settlement dated 27th March, 1997 is in gross violation of commitments made before the Company Court bearing CP No.67 of 1997 recorded vide order dated 21 st May, 1997.

(ix) It is submitted that no relief was sought to restrain the defendant Company in the suit plaint though substantial averments with respect to deed of family settlement dated 27 th March, 1997 and Company Court's order dated 21 st May, 1997 were made in this suit, besides having categorically pleaded as under:-

Para (3) sub-para (xii) "...the defendant company has no interest whatsoever, least of all any right or title qua the Trade Mark "SS"...."

"As such, the plaintiff at the time of manufacturing its seals, was shocked to know that the defendant company is manufacturing and trading in seals in the name and style of "SSIL" logo......"

Para (3) sub-para (xiii) "The adoption of the mark "SSIL", deceptively similar to mark "SS", by the defendant is completely illegal and unlawful and the fact that the mark has been adopted by the defendant for the purpose of marketing and trading in seals itself establishes that the defendant's intentions are to encash upon the reputation and goodwill of the plaintiff's mark, the same of which the defendant is not permitted to do by virtue of Family Settlement and the order passed by this Hon'ble Court."

Cause of action para (6) "The cause of action thereafter arose on 21.05.1997, when this Hon'ble Court approved the Scheme of Arrangement in C.P. No.67/1997, on which date, the Seals Division of SSIL stood transferred to SSHL (Anil Group) and by virtue of which transfer, the entire properties, assets, investments, claims, authorities

etc. as well as the entire undertaking of the Seals Division stood vested with SSHL."

"The cause of action further arose when the plaintiff company came to know about the seals being manufactured in the name and style of "SSIL" and available in the market when the plaintiff company's new plant at Haridwar, Uttaranchal started manufacturing its products on 2nd October, 2006...."

"As "SSIL" Logo seals of the defendant company is continued to be manufactured and supplied in the market, hence the cause of action is a continuing one."

(x) It is also submitted that the defendant Company deceitfully started its "Seals Business" including infringing the Trade Mark "SS" bearing No.1310753 by conducting similar business under a deceptively similar trademark "SSIL" bearing TM No.760462, which trademark registration was obtained by the defendant Company on 3rd June, 1997 and was registered for a period of 7 years as under the prevailing law applicable under the Trade and Merchandise Marks Act, 1958. Apparently, defendant's trademark was got renewed only on 31st July, 2007 which under the Trade Marks Act, 1999 is renewed for a period of 10 years. Interestingly, the defendant Company did not disclose this material evidence in various litigations be it CS(OS) No.750 of 2004 filed by the defendant Company as against plaintiff's predecessors namely SOS Automotive Components Pvt. Ltd. or at any point of time in CS(OS) No.2232 of 2006 unless until the defendant Company preferred amendment application dated 7th August, 2008 and/or in CS(OS) No.720 of 2007 which suit stood filed by the defendant Company as early as on 16th April, 2007.

(xi) The surfacing of defendant's registered TM "SSIL" under Class 12 for rubber seals etc. makes it imperative for the plaintiff Company to seek immediate relief of permanent injunction as against the defendant Company and for which purpose amendment to this suit is necessitated.

(xii) On 3rd November, 2008, plaintiff was further shocked and surprised to notice that the defendant Company is unceasingly

expanding/venturing into seals business despite the family settlement dated 27th March, 1997 - that too after receiving consideration of `15 lacs from Anil Group, read with Company Court's order dated 21st May, 1997. The list of documents dated 3rd November, 2008 is proof of the fact of defendant Company having yoked its past few years in establishing its seals business in the garb of other businesses.

(xiii) In view of facts narrated hereinabove, it is submitted by the plaintiff that the defendant Company is prohibited/estopped from pursuing its Seals Business. The impunity with which defendant Company is pursuing its nefarious designs is reflected from the list of documents dated 3rd November, 2008, by virtue of which the defendant Company for the first time disclosed that aside from "SSIL" trade mark (which surfaced vide defendant's amendment application dated 7 th August, 2008), it has acquired trademarks bearing Nos.802709, 802711, 802712, 802713, 802714, 855875, 858876 and 916756 under Classes 17, 12, 12, 17, 17, 12, 17 and 12 respectively.

9. In the application, it is stated that though the plaintiff has claimed the interim relief with respect to the seals business by the defendant Company, however, inadvertently, the said fact could not be comprehended in the plaint. Therefore, the plaintiff is now seeking the amendment by incorporating two additional paras in the pleadings to be numbered as (4a) and (4aa) to be added before existing para 4, amended para (7)(ia) to be added before para (7)(a) and the consequent amendment in prayer clause. The said amendment as sought by the plaintiff reads as under:-

(i) Plaintiff wants to incorporate two additional paras in the plaint to be numbered as (4a) and 4(aa) to be added before the existing para 4:

Amended para (4a) reads as follows:

"In the light of afore stated factual submissions, Plaintiff Company prays to this Hon'ble Court for passing of

injunction orders, inter alia, restraining the defendant from continuing with illegal and unlawful activities i.e., of manufacture and trading in "Seals Business". The Defendant Company is further liable to pay damages after rendering accounts to the plaintiff for all the monetary gains made by it from the date of Defendant Company having indulged in such malpractice until the time of re-imbursement of all profits accounted up to the date of payment."

Amended para (4aa) reads as follows:

"It is submitted that the Defendant Company, by virtue of Family Settlement dated 27.03.1997 r/w the orders passed by this Hon'ble Court on 21.05.1997 in CP No.67 of 1997, is completely stopped from indulging in manufacture and trading in "Seals Business" and therefore the seals business being carried out by the Defendant Company is unjust enrichment at the cost and expense of Plaintiff Company."

(ii) The plaintiff also wants to incorporate the amended para (7)(ia) before para (7)(a). The same reads as follows:

"For and order restraining the defendant, its principal officers, family members, servants, agents, dealers, family members, servants, agents, dealers, distributors and anyone acting for and on its behalf from trading and manufacturing in the seals business. This relief is valued for the purposes of court fee and jurisdiction at Rs.200/- and court fee of Rs.20/- is affixed hereto."

(iii) Further the plaintiff seeks to incorporate clauses (aa) and (ab) before the existing prayer (a).

Amended prayer clause (aa) reads as follows:-

"Restrain the defendant, its principal officers, family members, servants, agents, dealers, distributors and anyone acting for and on its behalf from trading and

manufacturing in the seals business."

Amended prayer clause (ab) reads as follows:-

"for an order of Rendition of Account of profits illegally earned by the Defendant Company by trading and manufacturing in seals business."

10. Mr.C.Mukund, learned counsel for the plaintiff has relied upon various judgments passed by the Supreme Court as well as by this Court in support of his submissions. He argued that even as per the defendant's own admission, there was a family settlement dated 27 th March, 1997 who has received the sum of `15 lacs in lieu of seals business and the Company Court vide order dated 21st May, 1997 has recorded the factum of the family settlement. The defendant Company is completely estopped from manufacturing, trading or dealing with the seals business in view thereof.

11. As already mentioned that the law of amendment of plaint is that the merit of the case is immaterial and cannot be looked into while considering the application for amendment. It is also settled law that the Court should take the liberal view in the matter of allowing the amendment unless serious injustice or irreparable loss is caused to the other side, as the Court exists to protect the rights of the parties and not to punish them for the mistakes they make in the conduct of their case. Where pleadings are defective, amendment would be allowed if two conditions are satisfied by the other side; the same are that the amendment would not be working injustice to the other side and secondly, those are necessary for the purpose of determining the real question in controversy between the parties. It should not be disallowed merely because it is opposed on the ground that the same is barred by limitation. On the contrary, the application will have to be

considered bearing in mind the discretion that fell in the Court for allowing or disallowing the application in the interest of justice.

12. In the present case, the plaintiff by virtue of amendment sought merely propose to clarify the additional facts about the family settlement dated 27th March, 1997 and the order passed by the Company Court dated 21st May, 1997 in C.P. No.67 of 1997 and to bring the facts that in view of the said order passed in that petition, the defendant is completely estopped from indulging in manufacture and trading in seals business and consequent thereof, the plaintiff is amending the para of suit valuation and prayer clause.

13. The defendant possibly being a party cannot dispute about the family settlement as well as order passed in C.P. No.67 of 1997. As far as the merit of the said factum is concerned, the same has to be considered by the Court after examining the case of both the parties, but the amendment sought by the plaintiff in the application cannot be refused, as this Court is of the view that the said amendment sought by the plaintiff will not change the nature of the suit as well as cause of action. In view thereof, the present application is allowed. The amended plaint filed by the plaintiff is taken on record.

14. Though the defendant has already filed the amended written statement along with its application for amendment of the written statement, yet considering the fact that the plaintiff's application for amendment of suit plaint is also allowed, the defendant is granted four weeks time to file the amended written statement, with advance copy thereof to the learned counsel for the plaintiff who may file the replication before the next date.

15. List the matter before the Joint Registrar on 3rd September, 2013 for admission/denial of the documents. Both the parties are granted one final opportunity to file the documents within eight weeks from today.

(MANMOHAN SINGH) JUDGE JULY 01, 2013