Madras High Court
K.Mangayarkarasi vs N.J.Sundaresan ... 1St on 9 January, 2025
Author: M.Nirmal Kumar
Bench: M.Nirmal Kumar
C.R.P.No.1272 of 2024
IN THE HIGH COURT OF JUDICATURE AT MADRAS
RESERVED ON : 25.07.2024
PRONOUNCED ON : 09.01.2025
CORAM
THE HONOURABLE MR.JUSTICE M.NIRMAL KUMAR
C.R.P.No.1272 of 2024
and
C.M.P. Nos.7292 & 7294 of 2024
1.K.Mangayarkarasi
2.KM Shreedevi
Both Represented by their power agent
Mr.Jaishree S ... Petitioners / Plaintiffs
Vs.
1.N.J.Sundaresan ... 1st Respondent / D1
2.Manonmani Angannan ... 2nd Respondent / D2
PRAYER: Civil Revision Petitions filed under Article 227 of
Constitution of India, to set aside the order dated 06.02.2024 passed
in I.A.No.9 of 2024 in C.O.S.No.147 of 2023 before Commercial Court
(District Judge Cadre), Coimbatore.
For Petitioners : Mr.Arun C Mohan
For Mr.Praveen Rathinam
For Respondents : P.R.Ramakrishnan
For Mr.R.Bharath Kumar
Page No.1 of 28
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C.R.P.No.1272 of 2024
ORDER
The Petitioners are plaintiffs and the Respondent herein is the
1st Defendant in the Suit. The Suit in C.O.S.No.147/2023, is filed the
Petitioners / Plaintiffs before the Commercial Court (District Judge
Cadre), Coimbatore, seeking for a relief of permanent injunction,
restraining the Respondent / 1st Defendant, his men, agent, power
agent, representative, etc., from interfering or using the Plaintiff's
Trademark of “SRI ANGANNAN BIRIYANI HOTEL” or “ABH SRI
ANGANNAN HOTEL” or any other name format signifying the term,
“ANGANNAN.” and to pay damages of Rs.20,00,000/- for the loss
that the plaintiffs incurred due to the use of the Trademark in
Application No.6440505 of “SRI ANGANNAN BiRIYANI HOTEL”.
2. Pending Suit, the 1st Respondent / 1st Defendant filed an
Application in I.A.No.9 of 2023, praying to refer the parties to
Arbitration. The said Application was allowed by the Commercial
Court, District Judge, Coimbatore. Aggrieved over the same, the
Petitioners filed the present Civil Revision Petition along with Civil
Miscellaneous Petitions.
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3. Mr.Arun C Mohan, the learned counsel appearing for the
Petitioners / Plaintiffs would submit that the Court below ought to
have considered that the 1st Respondent fraudulently fabricated the
assignment of t he Petitioners' Trademark to the 1st Respondent and
that the 1st Petitioner did not consent for the said assignment. The
said assignment was in fact denied as being fraudulent and the aspect
of serious fraud can only be considered by a civil Court, which has
been wholly disregarded to the impugned order. Since the
assignment deed itself is a fabricated document and when such
serious allegations of fraud exist, the fraud renders the arbitration
clause invalid. The Court below not considered the question and
prayer of infringement of trademark is a question of “right in rem”
which is inherently non-arbitrable. The prayer sought for in the plaint
has been disregarded in the impugned order and the nature of the suit
has not been duly considered therein. The 2nd respondent is not a
signatory to the alleged assignment agreement between the 1st
petitioner and the 1st respondent. Further, the Petitioners have filed
criminal complaint against the 1st Respondent for cheating and
fabrication of the Assignment deed and the same has not adjudicated.
4. The learned counsel for the petitioners further submitted
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that it was merely agreed between the 1st petitioner and the
respondent to lease the brand name of “SRI ANGANNAN
BIRIYANI”during the year 2016, for which, the respondent pay royalty
every month. The Respondent fraudulently created an assignment of
transfer of alleged Trademark on 20.09.2017, which is fabricated one.
At no point of time, the 1st Petitioner consensually assigned the
Trademark to the 1st Respondent. Since the alleged Assignment Deed
itself is challenged by the Petitioners due to its illegal nature, the
Arbitration clause incorporated in this fabricated document is not
enforceable. If the 1st Respondent's intention is to resolve the dispute,
then he should not have given an undertaking in mandatory mediation
that there is no possibility of settlement. Even during pendency of the
Suit, the Respondent, remained silent. Only after an order passed in
I.A.No.3 of 2023, restraining the Respondents from using the
Trademark and brand name, the Respondents filed the Petition in
I.A.No.9/2024 invoking the Arbitration Clause. The Respondent is
continued to use the Trademark and brand name in his bills and
receipts. The dispute fall under the category of right in rem are non
arbitrable. Initial assignment deed did not include an arbitration
clause and later it was incorporated by the Respondent.
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5. The learned counsel in support of his contentions, has relied
on the Judgment of the Hon'ble Supreme Court in Avitel Post
Studioz Limited and Ors Vs. HSBC PI Holdings (Mauritius) Ltd.
Reported in 2020 SCC Online SC 656, wherein it has been held that
a dispute becomes non-arbitrable when the court comes to the
conclusion that there is serious allegations of fraud which makes the
arbitration agreement itself to be inexistent such as in the present
circumstances wherein the petitioners have raised the plea that the
assignment deeds are fabricated and have been obtained by the 1st
respondent through fraudulent means. Further, the learned counsel
relied on the Judgment of the Hon'ble Apex Court in A.Ayyasamy Vs.
A.Paramasivam reported in (2016) 10 SCC 386 and in Booz-Allen
& Hamilton Inc vs Sbi Home Finance Ltd. & Ors reported in
2011 (5) SCC 532, for the point that the disputes in relation to
trademarks and patents are not arbitrable.
6. The learned counsel for the petitioners further submitted
that arbitrability of disputes is further clarified by the Supreme Court
in the case of Vidya Drolia vs. Durga Trading Corporation
reported in AIR ONLINE 2020 SC 929 wherein the Apex Court
propounded a fourfold test for determining the arbitrability of a
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subject matter. The relevant portion reads as follows:
(1) when cause of action and subject matter
of the dispute relates to actions in rem, that do not
pertain to subordinate rights in personam that
arise from rights in rem.
(2) when cause of action and subject matter
of the dispute affects third party rights; have erga
omnes effect; require centralized adjudication, and
mutual adjudication would not be appropriate and
enforceable;
(3) when cause of action and subject matter
of the dispute relates to inalienable sovereign and
public interest functions of the State and hence
mutual adjudication would be unenforceable; and
(4) when the subject-matter of the dispute is
expressly or by necessary implication non-
arbitrable as per mandatory statute(s).
7. Further, the learned counsel for the Petitioners relied on the
Judgment of the Supreme Court in A.Ayyasamy Vs. A.Paramasivam
reported in (2016) 10 SCC 386 wherein it has been held that
generally patent, copyright, trademark disputes are non-arbitrable.
The court further held that where fraud is alleged, the dispute would
be considered non- arbitrable. The relevant portion reads as under:
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“14.Notwithstanding the above, the Courts
have held that certain kinds of disputes may not be
capable of adjudication through the means of
arbitration. The Courts have held that certain
disputes like criminal offences of a public nature,
disputes arising out of illegal agreements and
disputes relating to status, such as divorce, cannot
be referred to arbitration. Following categories of
disputes are generally treated as non-arbitrable:-
(i) patent, trade marks and copyright;
(ii) anti-trust/competition laws;
(iii) insolvency/winding up;
(iv) bribery/corruption;
(v) fraud
(vi) criminal matters.”
Fraud is one such category spelled out by the decisions of this Court
where disputes would be considered as non-arbitrable."
8. The learned counsel further submitted that the above position
has been re-iterated by this Court in Sanjay Lalwani vs. Jyotstar
Enterprises & Ors. reported in MANU/TN/4688/2020 wherein the
Court placed reliance on the above judgements, to hold that
arbitration is not maintainable in respect of copyright matters, when
the relief against infringement is sought for. Non-arbitrability of
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disputes concerning rights in rem was further established by the
Bombay High Court in the case of Steel Authority of India Ltd. vs.
SKS Ispat and Power Ltd., reported in MANU/CG/0344/2012,
wherein it has been held that the rights to trademark and remedies in
connection therewith are matters in rem and not amenable to the
jurisdiction of a private forum chosen by the parties. The judgment
held that disputes concerning infringement and passing off do not
arise out of the contract between the parties which contains the
arbitration agreement, and hence, is not an arbitrable matter.
Further, in Indian Performing Rights Society Ltd. VS.
Entertainment Network (India) Ltd., reported in
MANU/MH/1597/2016, the Bombay High Court was tasked with
determining if an arbitral tribunal had the authority to decide the
validity of a copyright. The Court ruled that it did not, Semphasizing
that allowing a tribunal to address purely legal matters, such as the
existence of a copyright, constitutes an action in rem, which falls
outside the jurisdiction of an arbitral tribunal.
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9. The learned counsel for the petitioners submitted that
intellectual Property Right matters including disputes regarding
trademark infringement cannot be referred to arbitration, and can
only be adjudicated by a Court of Law. The relief of infringement
under Section 134 of the Trademarks Act, 1999, can never be granted
by an arbitral proceeding, and this position in law, though irrefutable,
has wholly misinterpreted in the Impugned Order. The Assignment
Deed referred to by the 1st Respondent already been placed for
determination of validity by the Trademark Registry, and therefore,
there is no further enquiry in law or fact that would be surviving for
determination by any arbitral tribunal, and this key facet has been
wholly overlooked in the Impugned Order. The present dispute is not
amenable to arbitration on two counts, the first being that it relates to
the infringement of a trademark, which has been held to be non-
arbitrable. The second being that there is an allegation of serious
fraud which goes to the very root of the arbitration agreement, since
the petitioners allege that the Agreement that contains the Arbitration
Agreement has been forged by the 1st Respondent.
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10. Mr.P.Ramakrishnan, the learned counsel appearing for the
Respondents would submit that the issue involved is the right
available to the 1st Respondent / 1st Defendant as the assignee of the
Trademark “ SRI ANGANNAN BIRIYANI HOTEL”. The 1st Petitioner
is the Proprietrix of the Trademark, which belonged to her father,
Late Angannan He died in the year 1986. After which, the
Trademark belonged to the 1st Petitioner Mangayarkarasi. Angannan
left behind another daughter Mohana, who is not in the picture in so
far as this issue is concerned. The 1 st Petitioner's husband,
Kathirvadivel took over the business in 1984, after the death of
Angannanm and till he died in 1990, he was assisted by his brother,
Jagadeeswaran in the business till he died in 2019. The 1st
Respondent, Sundaresan, is the son of Jagadeeswaran.
Mangayarkarasi had a son, Muralidharan, who was not in this
business. He died leaving behind two daughters, Jaishree and
Sreemathi. Jaishree represents the Petitioners as power agent in this
proceeding. The two daughters of Mangayarkarasi are Manonmani,
who is the 2nd Respondent and Sreedevi, who is the 2nd Petitioner.
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11. The learned counsel for the Respondents further submitted
that “Angannan Biriyani Hotel” was leased out by the 1st Petitioner in
2004 to Annapoorna Group of Hotels for a period of 10 years.
However, the lease was terminated by the lessee prematurely. There
was no registered trademark when Annapoorna exited from the
business, as lessee. Since the 1st Respondent was assisting his father
and father's brother, the 1st Petitioner assign the right to the 1 st
Respondent for future business. The 1st Petitioner decided to assign
the trademark and she was careful in including her own daughter,
Sreedevi, as one of the assignees along with the first Respondent.
This assignment dated 20.09.2017 is irrevocable and the 1st
Respondent paid consideration of Rs.20,000/- and the trademark was
assigned in their joint names. The deed of assignment contains an
Arbitration Clause vide Clause 15. Since the assignment was not
registered before the Registrar of Trademarks, a subsequent
Assignment Deed was also executed on 14.10.2019 by the first
Petitioner in favour of the same assignees. Due to Covid, notifying the
assignment with the Registrar could not be done immediately. Later
on, the 1st Respondent has moved for registration of the assignment
before the Registrar.
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12. The learned counsel further submitted that the 1st Petitioner
given an affidavit of Declaration as required for registration of the
trademark. Even before this assignment, with the full knowledge and
concurrence of the first Petitioner, her granddaughter Jaishree and
the 1st Respondent, started a business in partnership on 14.01.2017
and they carried on the business of 'Sri Angannan Biriyani Hotel' in
partnership with effect from 05.01.2017. The business was located in
VCV layout in a rented premise, which was taken on lease from
K.Palanniappn, under a Lease Agreement, dated 15.12.2017. This
lease is in favour of 'Sri Angannan Biriyani Hotel' represented by its
partner, Jaishree and the 1st Respondent. The Partnership dissolved
subsequently by a Deed of Dissolution, dated 30.11.2020, which is
attested by the landlord Palaniappan and the family Lawyer of the
Petitioners. There is also a Deed of affirmation in which both 1st
Respondent and Jaishree affirmed that they both can run the business
under the same name or in any other name of their choice. While 1 st
Respondent agreed to shift to another premises, Jaishree was allowed
to continue the business in VCV Layout.
13. The learned counsel for the Respondents submitted that in
pursuance of this arrangement, the business of Sri Angannan Biriyani
Hotel is carried on by the first Respondent, in Ratna Residency in
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V.H.Road which is also owned by the same landlord, K.Palaniappan.
Jaishree is carrying on business in V.C.V Layout under the name and
style of "Covai Anganna Biriyani House" and she also opened
Branches, which establish the fact that the first Petitioner
Mangayakarasi, not carrying on business and only the proprietary of
the trademark, assigned the trademark to her daughter Sreedevi and
her brother-in-law's son, Sundaresan. When the assignment deed is
irrevocable, a proceeding has been initiated challenging the
assignment and seeking injunction before the District Commercial
Court, Coimbatore, in C.O.S. No.147 of 2023. In the said suit, the 1st
Respondent filed I.A.No.9 of 2024 pointing out the arbitration clause
and seeking the relief of referring the parties to arbitration. The plea
was upheld. Against which, the petitioners preferred the present
Revision mainly on two grounds viz., (i) The Assignment Deed is
brought about fraudulently and therefore when fraud is pleaded, the
matter cannot be referred to arbitration and (ii) Dispute regarding the
Trademark is not arbitrable.
14. The learned counsel for the Respondents further submitted
that mere plea of fraud is insufficient to avoid an arbitration
proceedings. In Paragraph 8 of the plaint, the Petitioners/Plaintiffs
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stated that the assignment deed was brought about by
misrepresentation and the first plaintiff misled to signing blank
papers and the 1st Petitioner / 1st Defendant filled up the same by
including his name. Further, in paragraph 9 it is stated that the 1st
Petitioner / 1st Plaintiff not intended the trademark to be assigned to
the 1st Respondent / 1st Defendant. However, the plea is falsified by
the fact that the first plaintiff has received several payments from the
1st Defendant periodically. This is a matter to be gone into before the
Arbitration. Further, in para 10, it is pleaded by the plaintiff that the
first Defendant has drafted the assignment deed by including his
name along with the 2nd Plaintiff and has adopted fraudulent dilatory
tactics by undue influence. In para 11, it is stated that the first
Defendant has forged a fabricated deed as an irrevocable deed. The
plea of the plaintiff has been totally inconsistent. The signature is not
disputed. The fact that the first plaintiff wanted to assign the
trademark is also not in dispute. The objection now taken is that the
first Defendant fraudulently included his name also in the Deed of
Assignment. This is a matter of fact which has to be gone into in the
arbitration proceedings.
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15. The learned counsel for the Respondents further submitted
that once the 1st Petitioner /first plaintiff's signature is admitted and
the document ex facie shows that it has been properly executed and
the 2nd Petitioner / 2nd plaintiff is also a party to the document and the
Assignment Deed is duly executed and attested by a Notary Public,
prima facie the plea of the plaintiffs should be rejected. Mere use of
the word, 'fraud' will not disentitle the Court from referring the
matter to arbitration or from the Arbitral Tribunal to consider the
validity and enforceability of the agreement in all respects. The
leaned counsel for the respondent invited the attention of this Court
to the Judgment of the Hon'ble Apex Court In Hindustan Petroleum
Corporation Ltd vs. Pink City Midway Petroleum reported in
(2003) 6 SCC 503), wherein the Supreme Court held that where
arbitration clause exists, Court has a mandatory duty to refer the
disputes arising between the contracting parties to arbitration.
16. It is the submission of the learned counsel for the
Respondent that mere use of the word, "fraud" is not sufficient to oust
the jurisdiction of arbitration. A recent decision of the Supreme Court
in Sushma Shivkumar Daga & Another Vs. Madhurakumar
Ramkrishnaji Bajaj & Others reported in (2024) (1) CTC 84, the
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Supreme Court held that plea of fraud raised by the Applicant in their
reply to a petition under Sec.8 has never been substantially accepted
for making a bald plea of fraud and nothing else. Relying on a earlier
Judgment of the Apex Court in Rashid Raza Vs. Sadaf Akhtar
reported in (2019 (8) SCC 710), the Supreme Court holds that two
conditions are laid down and have to be satisfied before a Court can
refuse to refer the matter to the arbitrator, conscientiously decided by
parties in an Agreement. The first is that the plea perneats the entire
contract option of the arbitration agreement rendering it void or
secondly whether the allegation of fraud touches upon the internal
affairs of the parties interse having no implication in the public
domain. The allegation must have some implication in public domain
to oust jurisdiction of arbitration. If an allegation of fraud exists
directly between the parties concerned, the same will not be termed
to be of serious nature of fraud and hence would not be barred for
arbitration. The Apex Court in the Judgment in Deccan Papar Mills
Company Ltd., Vs. Regency Mahavir Properties and Others
reported in (2021 (4) CTC 334) held that where the suit is inter
parties with no public domain, fraud as laid down in the case of
Avitech Past Studioz Ltd (cited supra)) is not applicable. Where
rectification of instrument under Section 31 of the Specific Relief Act
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is strictly action inter parties or by person who obtained derivative
title from parties, such action is in personam and the dispute is
arbitrable.
17. I have heard the learned counsels appearing on either side
and perused the materials available on record.
18. It is not in dispute that the 1st Petitioner/Plaintiff is the
Proprietrix of the Trademark, after her father Late.Angannan, who
died in 1986. The 1st Petitioner's husband, Kathirvadivel took over
the business in 1984, after the death of Angannanm and till he died in
1990, he was assisted by his brother, Jagadeeswaran in the business
till he died in 2019. The 1st Respondent, Sundaresan, is the son of
Jagadeeswaran. Mangayarkarasi had a son, Muralidharan. He died
leaving behind two daughters namely, Jaishree and Sreemathi.
Jaishree represents the Petitioners, as power agent in this proceeding.
The two daughters of Mangayarkarasi are Manonmani, who is the 2nd
Respondent and Sreedevi, who is the 2nd Petitioner.
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19. On perusal of the records it is seen that the Petitioners /
Plaintiffs filed a Suit in C.O.S.No.147 of 2023 before the Commercial
Court (District Judge Cadre), Coimbatore, for permanent injunction,
restraining the defendants from interfering or using the Plaintiff's
Trademark of “Sri Angannan Briyani Hotel” and to pay damages of
Rs.20,00,000/- for the loss that the plaintiffs incurred due to the use of
the Trademark. Pending Suit, the 1st Respondent / 1st Defendant filed
an Application in I.A.No.9 of 2023, praying to refer the parties to
Arbitration, which was allowed by the Commercial Court, District
Judge, Coimbatore. Aggrieved over the same, the Petitioners are
before this Court with the present Civil Revision Petition.
20. On perusal of Clause 15 of “Deed of Assignment of Trade
Marks”, dated 20.09.2017 and 14.10.2019., it is seen that in the event
of any dispute between the parties, parties agreed to get such issues
resolved through Arbitration and in the event of not finding a
resolution through Arbitration, the Court having jurisdiction in
Coimbatore to the exclusion of all other Courts. The Clause 15 of
“Deed of Assignment of Trade Marks”, dated 14.10.2019, contains
Arbitration Clause, which reads as follows:-
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15. “Dispute Resolution”
“In the event of any dispute,
difference or claim arising between the Parties
under or in connection with this Agreement,
parties agree to get such issues and disputes
resolved first through CONCILIATION failing
which by ARBITRATION and in the event of not
finding a resolution through arbitration, the Court
having jurisdiction in Coimbatore to the exclusion
of all other Courts.”
21. Section 8 of the Arbitration and Conciliation Act, 1996 reads
as under:
"8. Power to refer parties to arbitration
where there is an arbitration agreement.--
(1) A judicial authority, before which an
action is brought in a matter which is the subject
of an arbitration agreement shall, if a party to the
arbitration agreement or any person claiming
through or under, so applies not later than the
date of submitting his first statement on the
substance of the dispute, then, notwithstanding
any judgment, decree or order of the Supreme
Court or any Court, refer the parties to arbitration
unless it finds that prima facie no valid arbitration
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agreement exists. (2) The application referred to
in sub-section (1) shall not be entertained unless it
is accompanied by the original arbitration
agreement or a duly certified copy thereof;
{Provided that where the original
arbitration agreement or a certified copy thereof
is not available with the party applying for
reference to arbitration under sub-section (1), and
the said agreement or certified copy is retained by
the other party to that agreement, then, the party
so applying shall file such application along with a
copy of the arbitration agreement and a petition
praying the Court to call upon the other party to
produce the original arbitration agreement or its
duly certified copy before that Court} (3)
Notwithstanding that an application has been
made under sub-section (1) and that the issue is
pending before the judicial authority, an
arbitration may be commenced or continued and
an arbitral award made."
22. The suit has been filed by the Petitioners / Plaintiffs by
suppressing the Arbitration Clause. The right of the Respondents
emanates out of the agreement between the parties. When there is a
valid contract between the parties providing for Arbitration, all claims
including enforceability can only be adjudicated before an Arbitrator.
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Though the Petitioners disputed the execution of the agreement, the
existence of the agreement is not disputed. An Arbitration Clause
which forms a part of the Agreement shall be treated as an agreement
independent of the other terms of the Contract. Further, the Arbitral
Tribunal has power to decide on any objections with respect to the
existence of validity of the agreement when there is an Arbitration
Clause. The petitioners and Respondents having signed in the
'Assignment Deed of Trademark', which contains the Clause regarding
settlement of dispute through arbitration, the Court below is right in
referring the matter to the Arbitral Tribunal .
23. As regards the contention of the petitioners that the
Assignment Deed is brought fraudulently and therefore, when fraud
is pleaded, the matter cannot be referred to Arbitration is concerned,
no doubt, mere plea of fraud is insufficient to avoid an arbitration
proceedings. The contention of the petitioners that the 1st Petitioner
was misled to signing blank papers and the 1st Respondent filled up
the same by including his name and the 1st Respondent has forged a
fabricated deed as an irrevocable deed, cannot be countenanced for
the simple reason that the the 1st Petitioner wanted to assign the
Trademark is not in dispute and the signatures not disputed. Once
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the 1st Petitioner admitted her signatures and the document ex facie
shows that it has been properly executed and the 2nd Petitioner is also
a party to the document and the Assignment Deed is duly executed
and attested by a Notary Public, prima facie the contention of the
Petitioners cannot be accepted. Further, the 1st
Petitioner/K.Mangayarkarasi and the 2nd Petitioner Sreedevi and her
Husband Ajith received several payments from the 1st Respondent
periodically, which is evident from the statement of extract of the
payments made by the 1st Respondent from 19.03.2021 to 23.02.2023.
24. The allegation of fraud must have some implication in public
domain to oust jurisdiction of arbitration. If an allegation of fraud
exists directly between the parties concerned, the same will not be
termed to be of serious nature of fraud and hence would not be barred
for arbitration. At this juncture, it is worthwhile to refer the decision
of the Hon'ble Apex Court in Sushma Shivkumar Daga case (cited
supra). Further, relying on a earlier Judgment of the Apex Court in
Rashid Raza's case (cited supra) the Supreme Court holds that two
conditions are laid down and have to be satisfied before a Court can
refuse to refer the matter to the arbitrator, conscientiously decided by
parties in an Agreement. The first is that the plea perneats the entire
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contract option of the arbitration agreement rendering it void or
secondly whether the allegation of fraud touches upon the internal
affairs of the parties interse having no implication in the public
domain. The allegation must have some implication in public domain
to oust jurisdiction of arbitration. If an allegation of fraud exists
directly between the parties concerned, the same will not be termed
to be of serious nature of fraud and hence would not be barred for
arbitration. Further, the Apex Court in the Judgment in Deccan
Papar Mills's case (cited supra) held that where the suit is inter
parties with no public domain, fraud as laid down in the case of
Avitech Past Studioz Ltd (cited supra)) is not applicable. Where
rectification of instrument under Section 31 of the Specific Relief Act
is strictly action inter parties or by person who obtained derivative
title from parties, such action is in personam and the dispute is
arbitrable.
25. The Law laid down by the Apex Court in the aforesaid
Judgments squarely apply to the case on hand. Admittedly, the dispute
between the parties arise out of a contract of assignment. There is no
public cause involved in this dispute. The question involved is one
arising under the contract of assignment and its validity and binding
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nature and what is the effect of several payment received by the
assignor from the 1st Respondent, as assignee, on various dates, which
are matters to be considered by the Arbitral Tribunal and this is
undoubtedly covered by the arbitration clause. The right claimed by
the 1st Respondent is contractual as assignee of a Trademark.
Disputes raised by the Petitioners is that there was no intention to
assign the trademark and that too irrevocably to the 1st Respondent,
but at the same time, the assignment in favour of the 2 nd Petitioner is
accepted. This renders the position of the Petitioners very week
insofar as the merits of the claim are concerned. This despite is
arbitrable and factual issues as also validity of the assignment and
rights flowing from it can be decided by the Arbitral Tribunal.
Further, the Suit is filed for the reliefs against the infringement and
passing off, which by their very nature would fall within the
jurisdiction of the Arbitrator. The right that is asserted by the 1 st
Respondent is not a right that emanates from the Trademark Act, but
a right that emanates from the Assignment Deeds. The Assignment of
a trademark is by a contract and not by a statutory act.
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26. As regards the contention of the Petitioners that disputes
involved in use of trademark is not arbitrable is concerned, the
Petitioners rely on a passing reference in Ayyasamy's case (cited
supra), where the Apex Court held that where there are allegations of
fraud and such allegations are merely alleged, it may not be necessary
to nullify the effect of arbitration agreement between the parties and
such issues can be determined by the Arbitral Tribunal. This judgment
supports the plea of the 1st Respondent, who wants the dispute to be
referred to Arbitration. Though fraud was pleaded in that proceeding,
the Supreme Court concluded that mere allegation of fraud was not
sufficient to detract from the obligations of the parties to submit their
disputes to arbitration. Moreover, non-arbitrable disputes dealt with
in Booz Allen's case and Vidya Dolia's case. In Booz Allen's case,
the Apex Court dealt with the disputes, which are arbitrable and
which non-arbitrable. This is clarified by a Three Judge Bench
Decision of the Apex Court in Vidya Dolia's case. In view of the
foregoing reasons, this Court is not inclined to interfere with the
findings of the Court below.
https://www.mhc.tn.gov.in/judis
27. In the result, the Civil Revision Petition stands dismissed.
Consequently, the connected miscellaneous petitions are also
dismissed. However, there shall be no order as to costs.
09.01.2025
Speaking Order/Non Speaking Order
Index : Yes/No
Internet : Yes
vv2 / mpk
https://www.mhc.tn.gov.in/judis
To
The Judge,
Commercial Court (District Judge Cadre),
Coimbatore.
https://www.mhc.tn.gov.in/judis
M.NIRMAL KUMAR, J.
vv2
PRE-DELIVERY ORDER MADE IN
09.01.2025
https://www.mhc.tn.gov.in/judis
