Md Iftekhar vs M/S Karim Hotels Pvt Ltd.
2014 Latest Caselaw 2251 Del

             *IN THE HIGH COURT OF DELHI AT NEW DELHI

%                                              Date of decision: 5th May, 2014

+                                 FAO(OS) 201/2014.
        MD IFTEKHAR                                          ..... Appellant
                           Through:     Ms. Shobhna Takiar, Adv.
                                      Versus

    M/S KARIM HOTELS PVT LTD.                .... Respondent

Through: Mr. Farrukh Khan, Mr. Salar M.

Khan, Ms. Sheeba Khan, Mr. Dilip Kumar & Mr. Wasiq Khan, Advs.

CORAM :-

HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW

CM No.7295/2014 (for exemption).

1. Allowed, subject to just exceptions.

2. The CM stands disposed of.

FAO(OS) 201/2014, CM No.7294/2014 (for stay) & CM No.7296/2014 (for condonation of 220 days delay in filing the appeal).

3. The appeal impugns, (a) the order dated 2nd July, 2013 of the learned

Single Judge in CS(OS) No.2708/2012 filed by the respondent, of allowing the

application of the respondent / plaintiff under Order 39 Rule 1&2 CPC by

confirming the ex parte ad interim order dated 7th September, 2012 and

dismissing the application filed by the appellant / defendant under Order 39

Rule 4 of the CPC; and, (b) the order dated 27th March, 2014 of dismissal of IA

No.15660/2013 filed by the appellant / defendant for modification of the order

dated 2nd July, 2013.

4. The appeal, in so far as challenges the order dated 2nd July, 2013, is

barred by time and is accompanied with an application for condonation of 220

days delay in filing the same.

5. However the counsel for the respondent / plaintiff being on caveat

appears and we have without considering whether there are sufficient grounds

for condonation of delay or not, heard the counsels on merits.

6. The respondent / plaintiff has filed the suit from which this appeal arises

for permanent injunction restraining the appellant / defendant from using in any

manner whatsoever the trade mark "KARIM'S" or any other mark identical

with or deceptively similar to the plaintiff's registered trade mark "KARIM" &

"KARIM'S" and for ancillary reliefs. The suit was accompanied with an

application for interim relief and vide ex parte ad interim order dated 7th

September, 2012 the appellant / defendant was restrained from using the name

of "KARIM MUGHLAI CUISINE" or any other name identical or deceptively

similar to the name KARIM / KARIM'S. The appellant / defendant besides

contesting the said application for interim relief, as aforesaid also applied under

Order 39 Rule 4 of the CPC for vacation of the ex parte order dated 7th

September, 2012.

7. The learned Single Judge has vide impugned order dated 2 nd July, 2013

inter alia found / observed / held:-

(i) that on 5th February, 2013 an undertaking was given by the

appellant / defendant to the Court that they would not run their

restaurant in the name of KARIM MUGHLAI CUISINE or in the

name of KARIM;

(ii) that it was the plea of the appellant / defendant,

(a) that the respondent / plaintiff was / is guilty of

suppression of material facts; that the respondent / plaintiff

is not the owner of the trademark KARIM or KARIM'S

despite having obtained registration thereof; the said

registration was obtained fraudulently by suppressing the

material facts;

(b) the appellant / defendant produced before the learned

Single Judge copy of the Trust Deed dated 13 th June, 1996

which notes that late Mr. Haji Zahiruddin had by a will

bequeathed to the Karim's Moghlai Trust the right to

receive royalty for the use of the trade name KARIM as well

as the goodwill;

(c) the appellant / defendant also relied on a Will dated

20th June 1996 purportedly executed by late Mr. Haji

Zahiruddin in terms of which the right to receive royalty for

use of the trade name and goodwill was bequeathed by him

as owner of the Trust; under the said Will the right to use

the trade name KARIM / KARIM'S was given to all family

members for running any similar business or restaurants,

subject to their paying a royalty of 1% on the gross sale turn

over to the Trust;

(d) the appellant / defendant also claimed to be a inheritor

of the name and goodwill of KARIM'S;

(e) the appellant / defendant also relied on documents to

show that the respondent / plaintiff itself had been paying

royalty to the Trust from 1994 to 2004 and which was

claimed to be a clear admission by the respondent / plaintiff

that it was not the owner or proprietor of the trade marks in

question;

(f) that the Director of the respondent / plaintiff had

tricked the appellant / defendant to enter into a Franchise

Agreement dated 1st June, 2009 and which Franchise

Agreement was valid till 12th March, 2014 and under which

Agreement the respondent / plaintiff had given a right to the

appellant / defendant to use the name KARIM MUGHLAI

CUISINE;

(iii) that the respondent / plaintiff had disputed the Will contending it

to be a forgery;

(iv) it was further the plea of the respondent / plaintiff,

(a) that there were mutual inconsistencies in the Will on

the one hand and the Trust Deed dated 20th June, 1996 on

the other;

(b) that the respondent / plaintiff did not have access to

the relevant papers and thus the Trust Deed could not be

filed along with the plaint;

(c) that non-production of the Trust Deed or the

Franchise Agreement made no difference to the case of the

respondent / plaintiff and rather the same strengthened the

case of the respondent / plaintiff; that the Franchise

Agreement was a clear acknowledgement by the appellant /

defendant of the fact that the respondent / plaintiff was the

owner and proprietor of the marks in question;

(d) that the payment by the respondent / plaintiff of the

royalty to the Trust was in the nature of a voluntary

contribution for charity;

(v) the learned Single Judge prima facie found,

(a) the copy of the Will produced by the appellant /

defendant to be unreliable for the reason of the inherent

inconsistencies therein;

(b) that there were indeed inconsistencies between the

Trust Deed and the alleged Will;

(c) that the appellant / defendant had challenged the

validity of the registration of the marks in favour of the

respondent / plaintiff and that challenge was to be examined

on merits by the fora concerned; and,

(d) that nothing in the Trust Deed contradicted the case of

the respondent / plaintiff.

8. The learned Single Judge having given cogent reasoning in the impugned

order on the application for interim relief and it being a settled principle of law

that such discretionary orders would not be interfered in appeal unless the

reasoning given is perverse and merely for the reason that the Appellate Court

on an independent assessment may have arrived at a different finding, (see

Glaxo Smith Kline Pharmaceuticals Ltd. Vs. Union of India 185 (2011) DLT

540 (Para 8)) we have at the outset enquired from the counsel for the appellant /

defendant as to what is the ground of challenge.

9. The counsel for the appellant / defendant has raised only one argument. It

is contended that it having been abundantly borne out that the respondent /

plaintiff did not approach the Court with clean hands, making a clean breast of

all the concerned documents and the respondent / plaintiff having been found to

be in suppression of the Trust Deed and the Franchise Agreement, was not

entitled to any interim relief and the learned Single Judge has not considered

the said aspect of the matter. Reliance is placed on para 53 of Amar singh Vs.

Union of India (2011) 7 SCC 69 laying down that the Courts frown upon

litigants who, with the intent to deceive and mislead the Courts initiate

proceedings without full disclosure of facts and that such litigants are not

entitled to be heard on the merits of their case.

10. We have enquired from the counsel for the appellant / defendant whether

not the registration of the trademarks, to restrain infringement of which the suit

from which this appeal arises has been filed, stands in the name of the

respondent / plaintiff.

11. The counsel for the appellant / defendant agrees.

12. We have further enquired from the counsel for the appellant / defendant

whether not the misrepresentation if any was before the Registrar of

Trademarks in obtaining registration in the name of the respondent / plaintiff

rather than in the name of the Trust.

13. The counsel for the appellant / defendant again replies in the affirmative.

14. We have then enquired from the counsel for the appellant / defendant as

to how the respondent / plaintiff could be denied interim relief for the reason of

having practiced a concealment at the time of registration of the trade mark and

not before this Court and whether not the remedy for such concealment is in the

proceedings for revocation of the registration in favour of the respondent /

plaintiff.

15. Though the counsel for the appellant / defendant agrees but further

contends that the respondent / plaintiff misrepresented in the plaint that it was

the owner of the said trade mark since the year 1913. It is argued that while

stating so, it was incumbent upon the respondent / plaintiff to disclose about the

Trust and which has not been done.

16. To appreciate the aforesaid contention we have combed the plaint.

17. The respondent/ plaintiff, in the plaint, has claimed "association" since

the year 1913 and has disclosed that the founder of the respondent / plaintiff

namely Haji Karim Zahiruddin had used the initial letters of his name to start

the brand name KARIM'S and the respondent / plaintiff was the owner of the

trade mark.

18. We are of the view that the respondent / plaintiff having obtained the

registration of the trade mark in its name, the case of the respondent / plaintiff

in the suit/plaint was on the basis of the said registration. Further, the

respondent / plaintiff did not claim to be the "owner / proprietor" of the trade

mark from the year 1913 and rather claimed "association" with trade mark.

Owing to the supervening circumstance of the respondent / plaintiff being the

registered proprietor of the trade mark, we are of the view that the suppression

if any practiced by the respondent / plaintiff in obtaining such registration was /

is of no relevance and cannot be said to be a factor which the respondent /

plaintiff was bound to disclose to this Court, at least at the stage of Order 39

Rules 1&2 CPC.

19. We are further of the view that in the face of the registration of the trade

marks in the name of the respondent / plaintiff, the manner of such registration

pales into insignificance.

20. Besides the factum of the appellant / defendant having obtained license /

rights from the respondent / plaintiff to use the said trade mark and the factum

of the appellant / defendant having paid royalty / charges to the respondent /

plaintiff for such user of the trade mark was / is a relevant factor and which

rightly prevailed with the learned Single Judge in granting the interim relief.

21. We do not find any perversity in the order.

22. The counsel for the appellant / defendant has then invited attention to the

application filed by the appellant / defendant for modification of the order dated

2nd July, 2013 on the ground that others were also using the name KARIM in

relation to foods business.

23. The learned Single Judge has vide order dated 27th March, 2014 held that

it was the stand of the respondent / plaintiff in response thereto that the Trust

was not receiving any royalty from any individual / stores / business entity /

traders and that the Trust was not allowing the trade name KARIM / KARIM'S

/ KAREEM or any other variants thereof upon payment of any royalty or

otherwise and accordingly dismissed the application.

24. No error is found in the said part of the order also.

25. We may notice that it was / is the plea of the respondent / plaintiff that

the restaurants / eating places with the trade name KARIM / KARIM'S were

being run with the permission of the respondent / plaintiff and by paying

royalty to the respondent / plaintiff . In view of the said statement which we

have no reason to doubt, the said ground is also not available.

26. There is thus no merit in the appeal.

Dismissed.

CHIEF JUSTICE

RAJIV SAHAI ENDLAW, J.

MAY 5, 2014 pp