Endocura Pharma Pvt Ltd vs Hijam Rajendra Singha & Ors.
2022 Latest Caselaw 2471 Del

                 $~24
                 *    IN THE HIGH COURT OF DELHI AT NEW DELHI

                                                            Date of Decision: 10.10.2022

                 +       RFA-IPD 6/2022
                         ENDOCURA PHARMA PVT LTD             ..... APPELLANT
                                        Through: Mr.Koonal Tanwar, Adv.

                                             versus

                         HIJAM RAJENDRA SINGHA & ORS. ..... RESPONDENTS
                                      Through: Mr.N. Mahabir & Mr.Chetan
                                               Giri, Advs.
                         CORAM:
                         HON'BLE MR. JUSTICE NAVIN CHAWLA
                          NAVIN CHAWLA, J. (Oral)

CM 108/2022 (Exemption)

1. Allowed, subject to all just exceptions.

2. Accordingly, the application stands disposed of.

RFA-IPD 6/2022 & CM 109/2022

3. The present appeal has been filed challenging the judgment and decree dated 17.05.2022 passed by the learned Additional District Judge, Central-03, Tis Hazari Courts, Delhi, dismissing the suit of the appellant, being TM No. 1068/2016, titled Endocura Pharma Pvt. Ltd. v. Hijam Rajendra Singha & Ors.

4. Briefly stated, it is the case of the appellant that the respondent no. 1 started trading under his sole proprietorship firm namely 'M/s Endocura Pharma' and adopted the mark 'SUN SIPS' for medicinal

Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:12.10.2022

products in Class 05. Later, the respondent no. 1 along with Smt. Geeta Chauhan got the appellant-company incorporated as a private limited company on 19.03.2012, where after the appellant-company started using the said mark and developed goodwill and reputation in the same. Disputes arose between the parties, that is, Smt. Geeta Chauhan and the respondent no. 1. A Settlement Agreement was executed on 01.11.2014 between the respondent no. 1 and Mr. Himanshu Chauhan, who on that day, was not a director of the appellant-company.

5. The learned counsel for the appellant submits that there was neither a Board Resolution authorizing Mr. Himanshu Chauhan to execute the Settlement Agreement on behalf of the appellant-company nor was the consent of the shareholders (which were nine in number as on that day) taken. He submits that even the authority of Mr. Himanshu Chauhan to execute the said agreement on behalf of Smt. Geeta Chauhan was demanded by the respondent no. 1. He further submits that the said Settlement Agreement was not honoured even by the respondent no. 1, inasmuch as, though respondent no. 1 was to tender his resignation with effect from 01.04.2015, the respondent no.1 continued to remain a director of the appellant-company and resigned only in October 2015; in terms of the said Settlement Agreement dated 01.11.2014, the mark 'HIJAM' was to belong to the appellant-company, however, in breach of the Settlement Agreement dated 01.11.2014, the respondent no. 1 continued to use the same. He

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submits that the said Settlement Agreement is neither validly executed nor binding on the appellant-Company.

6. It is further the case of the appellant that immediately on resigning from the appellant-company, the respondent no. 4, which is controlled by the respondent no. 1, issued a public notice stating that the respondent no. 4 was the owner and proprietor of the impugned trade mark 'SUN SIPS'. The respondent no. 1 also issued a cease-and- desist notice dated 20.11.2015 to the appellant. The appellant thereafter filed the abovementioned suit praying for inter-alia an order of injunction restraining the respondents from using the trade mark 'SUN SIPS'. As noted hereinabove, by the impugned judgment and decree, the said suit has been dismissed.

7. The learned counsel for the appellant reiterates that the mark 'SUN SIPS' belongs to the appellant-company. He submits that the learned Additional District Judge has erred in placing reliance on the Settlement Agreement dated 01.11.2014 to dismiss the suit of the appellant, inasmuch as, the said Settlement Agreement dated 01.11.2014 has been executed by only one of the then-directors of the appellant-company. Mr. Himanshu Chauhan was not authorized on behalf of Smt. Geeta Chauhan, the other director of the appellant- company to execute the said agreement. A Board Resolution was also not passed authorizing execution of the said Settlement Agreement. Placing reliance on the cross-examination of the respondent no. 1, he submits that the respondent no. 1 admitted to the above facts as also to the fact that neither an authorization was shown to him by Mr.

Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:12.10.2022

Himanshu Chauhan prior to the signing of the settlement on behalf of Smt. Geeta Chauhan nor he demanded the same. He submits that the property of the appellant-company could not be, therefore, transferred in such a manner.

8. The learned counsel for the appellant further submits that the respondent no. 1, himself having breached the terms of the settlement, cannot place any reliance thereon. In this regard, he reiterates that the respondent no. 1 was to resign from the directorship of the appellant- company with effect from 01.04.2015, which he failed to do. He further submits that respondent no. 1 continued to use the mark 'HIJAM' despite having agreed to the exclusive right of the said mark to vest in the appellant.

9. I have considered the submissions made by the learned counsel for the appellant, however, find no merit in the same.

10. As recorded in the impugned judgment and not denied by the learned counsel for the appellant, at the relevant time there were only two directors of the appellant-company, namely, the respondent no. 1 and Smt. Geeta Chauhan. The Settlement Agreement dated 01.11.2014 purports to have been executed by Mr. Himanshu Chauhan for and on behalf of Smt. Geeta Chauhan, the other director of the appellant- company. Smt. Geeta Chauhan has not entered the witness box to contend that the said Agreement was executed by Mr. Himanshu Chauhan without either her authority or concurrence. In fact, the plaint itself has been signed and presented by Mr. Himanshu Chauhan, the signatory to the Settlement Agreement. It is also admitted that there Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:12.10.2022

were only these two directors of the appellant-company as on the relevant day. In that event, the execution of a formal Board Resolution would, in my opinion, be a mere formality, the parties having agreed to the terms of the settlement between them. The respondent no. 1 and Smt. Geeta Chauhan were the only two shareholders of the appellant company as on the date of the execution of the Settlement Agreement.

11. As far as the submission of the learned counsel for the appellant that the respondent no. 1 is in breach of the Settlement Agreement dated 01.11.2014, in my opinion, the remedy of the appellant was to seek specific performance of the agreement in case it so desires, however, that cannot be a ground to resile from the terms agreed between the parties. In any case, it is admitted that the respondent no.1 has in 2015 itself resigned from the company and Mr.Himanshu Chauhan was appointed as a director of the appellant-company. This shows the compliance with the terms of the Settlement Agreement dated 01.11.2014. As far as the use of the mark 'HIJAM' by the respondent no. 1 is concerned, no claim thereon was made by the appellant in the plaint. This Court, therefore, refrains itself from making any observation regarding the use of the said mark by the respondent no. 1.

12. In view of the above, I find no merit in the present appeal. The same is dismissed. There shall be no order as to costs.

NAVIN CHAWLA, J OCTOBER 10, 2022/rv/AB Signature Not Verified Digitally Signed By:SHALOO BATRA Signing Date:12.10.2022