Madras High Court
M/S.Nico Quality Products vs M/S.N.C.Arya Snuff & Cigar Co on 24 January, 2025
Author: P.Velmurugan
Bench: P.Velmurugan
C.S.(Comm.Div).Nos.605 and 882 of 2013
and 587 of 2015
IN THE HIGH COURT OF JUDICATURE AT MADRDAS
Dated: 24.01.2025
Coram:
THE HONOURABLE MR.JUSTICE P.VELMURUGAN
C.S.(Comm.Div).Nos.605 and 882 of 2013 and 587 of 2015
---
M/s.Nico Quality Products,
Rep. by its Partner Mr.K.C.Vijay
1st Floor, No.4/1, Kandaswamy Street,
Chandrabagh Avenue,
Mylapore, Chennai-600 004.
.. Plaintiff in C.S.(Comm.Div).No.605 of 2013
M/s.N.C.Arya Snuff & Cigar Co.,
Rep. by its Parters,
S.Chandrasekaran,
S.Thara,
19, Davidson Street,
Chennai-600 001,
Rep. by Power Agent of
Mr.Ragurramun Krishnadhas,
S/o S.Krishnadhas,
Residing at No.32, 7th Cross Street,
West Extension,
Thilainagar, Trichy-620 018.
.. Plaintiff in C.S.(Comm.Div).No.882 of 2013
1. N.C.Arya Snuff & Cigar Co.,
A partnership firm, represented by
its partner Kr.Ragurramun,
S/o Su.Krishnadhas,
having office at
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C.S.(Comm.Div).Nos.605 and 882 of 2013
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D-32, 7th cross,
West Extension,
Thillai Nagar, Trichy-18.
2. M/s.Sakthi Snuff & Co.,
Proprietorship concern,
represented by
S.Karthikeyan, Proprietor,
193/2A, Thuraiyur Road, Nochiam,
Manachanallur Taluk,
Trichy-621 216.
3. M/s.Adhinayagam Agencies,
Partnership firm, represented by
its partner Su.Krishnadhas,
20/A, Thennur Main Road,
Thennur, Trichy-17.
.. Plaintiffs in C.S.(Comm.Div).No.587 of 2015
Vs.
1. M/s.N.C.Arya Snuff & Cigar Co.,
Rep. by its Partners,
S.Chandrasekaran, S.Thara, V.Anuradha,
19, Davidson Street,
Chennai-600 001.
2. M/s.Sakthi Snuff Co.,
Manufacturer for M/s.N.C.Arya Snuff & Cigar Co.,
Thuraiyur Road, Nochiyam,
Trichy-621 126.
3. M/s.Adinayagan Agencies,
20-A, Tennur High Road,
Tennur, Trichy-17.
4. V.Shankar Amarnath,
M/s.Vijayanth Trading Co.,
Marketing Agent for N.C.Arya Snuff & Cigar Co.,
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C.S.(Comm.Div).Nos.605 and 882 of 2013
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P.51/1, CIT Road,
Kolkata-700 014.
5. V.Sreenivasan,
M/s.India Model Production,
Marketing Agent for M/s.N.C.Arya Snuff & Cigar Co.,
P.51/1, CIT Road,
Koltaka-700 014.
.. Defendants in C.S.(Comm.Div).No.605 of 2013
1. M/s.Nico Quality Products,
Rep. by its Partner Mr.K.C.Vijay,
1st Floor, No.4/1, Kandaswamy Street,
Chandrabagh Avenue,
Mylapore, Chennai-600 004.
2. K.C.Vijay,
S/o Chandramohan,
1st Floor, No.4/1, Kandasamy Street,
Chandrabagh Avenue, Mylapore,
Chennai-600 004.
3. Zanakanabady
4. Anuradha .. Defendants in C.S.(Comm.Div).No.882 of 2013
Nico Quality Products,
A partnership firm, represented by its Partner,
K.C.Vijay,
1st Floor, No.4/1, Kandaswamy Street,
Chandrabagh Avenue,
Mylapore, Chennai-600 004.
.. Defendant in C.S.No.587 of 2015
Plaint filed and numbered as C.S.(Comm.Div).No.605 of 2013, under
Sections 134 and 135 of the Trade Marks Act, 1999, read with Order IV Rule 1 of
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C.S.(Comm.Div).Nos.605 and 882 of 2013
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the Original Side Rules of this Court and Order VII Rule 1 of the Code of Civil
Procedure (i.e. CPC), praying for judgment and decree as follows:
(i) Grant a permanent injunction restraining the defendant, its men,
agents, servants or persons acting on its behalf from infringing the plaintiff's
registered trade mark bearing numbers 454103, 454106, 454109, 59273,
180448, 180449, 59308, 178484, 179074 and 194656 in Class 34, in any manner
either by using the plaintiff's word mark and/or logo or otherwise in relation with
the products manufactured and marketed by the defendants;
(ii) Grant a permanent injunction restraining the defendant, its men,
agents, servants or persons acting on its behalf from passing-off the products
manufactured and marketed by them using the plaintiff's trade mark or any other
mark deceptively similar or closely resembling the plaintiff's mark, in any manner
either by using the plaintiff's word mark and/or logo described in the Schedule
hereunder or otherwise in relation with the products manufactured and marketed
by the defendants; and
(iii) for costs of the suit.
Plaint filed and numbered as C.S.(Comm.Div).No.882 of 2013 under
Section 134 and 135 of the Trade Marks Act, 1999, read with Order IV Rule 1 of
the Original Side Rules of this Court and Order VII Rule 1 of the C.P.C., praying
for judgment and decree as follows:
(i) for a declaration declaring that the Deed of Assignment dated
15.12.2011 as illegal, null and void and non-est in the eye of law;
(ii) grant a permanent injunction restraining the defendant, its men,
agents, servants or persons acting on its behalf from infringing the plaintiff's
registered trade mark bearing Nos.454103, 4554106, 592763, 180448, 180449,
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C.S.(Comm.Div).Nos.605 and 882 of 2013
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559308, 178484, 179074 and 194656 in Class 34, in any manner or otherwise in
relation with the products manufactured and marketed by the defendants;
(iii) grant a permanent injunction restraining the defendants, its men,
agents, servants or persons acting on behalf from passing-off the products
manufactured and marketed by them using the plaintiff's trade mark, and
(iv) to pay the costs of the suit.
Plaint filed and numbered as C.S.(Comm.Div).No.587 of 2015 under
Sections 134 and 135 of the Trade Mark Act, 1999, read with Order 4 Rule 1 of
the Original Side Rules of this Court and Order 7 Rule 1 of the CPC, praying for
judgment and decree as follows:
(i) grant a permanent injunction restraining the defendant from passing-
off the product manufactured and marketed by them using the scheduled
mentioned trade marks or other marks deceptively similar or closely resembling
the plaintiff's mark in any manner, either by using the plaintiff's word mark or
logo morefully described in the schedule here under or otherwise in relation with
the products manufactured and marketed by the defendants, and
(ii) for costs of the suit.
For plaintiff in C.S.No.605 of 2013 and for defendants in C.S.Nos.882 of 2013
and 587 of 2015 : Mr.P.S.Raman, Senior Counsel,
assisted by Mr.Gautam S.Raman
For defendants in C.S.No.605 of 2013 and for plaintiffs in C.S.Nos.882 of 2013
and 587 of 2015 : Mr.R.Rajarajan
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C.S.(Comm.Div).Nos.605 and 882 of 2013
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COMMON JUDGMENT
C.S.(Comm.Div).No.605 of 2013 is filed praying for judgment and decree
to grant permanent injunctions; C.S.(Comm.Div).No.882 of 2013 is filed praying
for declaration and permanent injunctions.. C.S.(Comm.Div).No.587 of 2015 is
filed praying for grant permanent injunction.
2. The averments of the plaintiff in C.S.(Comm.Div).No.605 of 2013 are as
follows:
(a) The plaintiff is a partnership firm, which is in the business of marketing
and supply of Snuff and Cigar products in India and abroad. The first defendant
is also a partnership firm, constituted under the Partnership Act, having three
partners, having partners, namely (i) S.Chandrasekaran, (ii) S.Thara and
(iii)V.Anuradha. The first defendant was originally the owner and Proprietor of
Trade Mark numbers in 454103, 454106,454109, 592763, 180048, 180449,
559308, 178484, 179074 and 1946556 in Class 34 in the name of M/s.N.C.Arya
Sniff and Cigar Company and the same was registered with the Registrar of
Trade Marks at Chennai. The first defendant is represented by its then Managing
Partner, who vide authorisation letter, dated 27.10.2011, was authorized to act
on behalf of the first defendant to enter into a deed of assignment, transferred
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and assigned to the plaintiff all the rights and benefits, including rights in relation
to manufacturing and marketing of all products in India and abroad, of the
aforementioned trade marks owned by the first defendant for consideration of
Rs.75 lakhs, the receipt of which was acknowledged by the first defendant, vide
assignment deed, dated 15.12.2011.
(b) It was mutually agreed to by and between the plaintiff and the first
defendant that the first defendant be allowed to market and supply the snuff and
cigar stock already produced within 12 to 18 months of execution of the deed of
assignment and thereafter, all the rights will remain with the plaintiff, who would
then be the exclusive manufacturer and seller of snuff and cigar products under
the said trade marks.
(c) Subsequent to the assignment of the aforementioned trade marks in
favour of the plaintiff, the plaintiff conducted a market survey and also contacted
dealers/distributors for commencing manufacture and sale. The plaintiff
commenced their business of manufacturing and marketing the snuff and cigar
products under the trade marks assigned to them from August 2013. In
compliance with the trade marks law, the plaintiff, on 19.08.2013, submitted to
the Registrar of Trade Marks, Guindy, Chennai, form TM.24, requesting the
Registrar to register the plaintiff as the subsequent proprietor of the
aforementioned trade marks which were assigned to the plaintiff. The first batch
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of consignment was dispatched on 21.08.2013 to a consignee by name,
Mr.T.Balaji, residing in Andhra Pradesh. At this stage, when the plaintiff had
begun to manufacture and sell the products that they were shocked to learn that
the first defendant was continuing to manufacture and sell the products under
the trade marks that were already assigned to the plaintiff even after expiry of
the grace period given to them to clear the stocks manufactured prior to the
assignment of the trade marks.
(d) As per the terms of the deed of assignment entered into between the
plaintiff and the first defendant, the first defendant had transferred and assigned
the exclusive use and all benefits of the aforementioned trade marks in relation
to the manufacture and marketing of all products under Class 34 in India and
abroad. This clearly proves that the first defendant has infringed the rights of the
plaintiff by using the said trade mark to sell its snuff and cigar products. The
second defendant has been manufacturing the products and the third and fourth
defendants have been marketing the same on behalf of the first defendant even
after the rights were assigned in favour of the plaintiff. The label and packaging
of the first defendant's products are deceptively similar to that of the plaintiff, in
respect of the same class of goods, causing confusion among the purchasing
public. This act of the first defendant is bound to affect the business of the
plaintiff, who holds exclusive rights to use the said trade marks in relation to its
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C.S.(Comm.Div).Nos.605 and 882 of 2013
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business. The plaintiff is left with no other alternative means but to approach the
Court for the relief restraining the defendants from infringing the rights of the
plaintiff in the said trade marks. The plaintiff has entered the market in August
2013 and cannot at this stage estimate the damages caused to it due to the
defendants' acts of infringement. Hence, the plaintiff has filed the suit in
C.S.No.605 of 2013 for the reliefs stated supra.
3. The first defendant has filed written statement in C.S.No.605 of 2013,
stating as follows:
(a) At the time of filing the suit, there were only two partners, viz.,
(i)S.Chandrasekar and (ii) S.Thara as per the partnership deed, dated
01.07.2012, and subsequent to the filing of the suit, the firm has been
reconstituted and now the firm comprised of four partners, viz.,
(i)S.Chandrasekar, (ii) S.Thara and (iii)K.Ragurammun and Shankar Amarnath by
virtue of the re-constitution and now the firm comprised of four partners,
S.Chandrasekar, S.Thara,K.Ragurammun and Shankar Amarnath by virtue of the
re-constitution deed. The partnership deed dated 01.07.2012 and the re-
constitution deed and the registration copy are all filed along with the written
statement. The first defendant M/s.N.C.Arya and Snuff and cigar Company is the
registered owner of the trade mark Nos.454103, 454106, 454109, 592763,
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180449, 180440, 559308, 178484, 179704 alone is true. The first defendant is
represented by the Managing Partner V.Anuradha by virtue of the authorisation
letter dated 27.10.2011 to assign the right of registered trade mark
manufacturing and marketing of all products in India and abroad for a
consideration of Rs.75 lakhs. The authorisation letter itself is a forged and
fabricated document. The authorisation letter is of doubtful origin. The alleged
signatures of the partners, namely S.Chandrasekhar and S.Thara are found on
the bottom of the page, whereas the contents of the document are of four lines
which is on the top of the page. There is almost an half a foot gap between the
contents of the letter and the signatures of the other two partners authorising
Anuradha. Apart from the said fact, the authorisation letter said to have been
notarised by one R.Jayachandran, Advocate and Notary bearing Registration
No.81 of 2011. In the photocopy of documents annexed along with the plaint,
the date of notarisation is not clear. The date of notarisation appears to be made
on 14th August and the particulars of the year are totally illegible. The
authorisation letter is dated 27.10.2011, if so, the notarisation could not have
been given on 14.08.2011. Even otherwise, there is no chance for giving
notarisation since both the partners Chandrasekaran and Thara were not present
and admit the alleged signature before the said notary at any point of time. The
aforesaid circumstances narrated clearly proves and establishes that the
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authorisation letter is a rank forgery and the same is concocted for the purpose
of filing the suit.
(b) The first defendant also denies the execution of the deed of
assignment on behalf of the first respondent partnership firm alleged to have
been executed on 15.12.2011. The recitals in the deed of assignment spelt that
Rs.75 lakhs is said to have been paid by the plaintiff to the said Anuradha and
the receipt of which is stated to have been acknowledged by the sai Anuradha.
First of all, such a huge sum cannot be transferred by cash and such transfer is
prohibited under the Income Tax Act, 1961. The alleged amount of Rs.75 lakhs
has never been entered in the Account ledger of the first defendant-firm. The
cash consideration of Rs.75 lakhs is invented for the purpose filing the present
suit. One of the two partners of the plaintiff firm is one Gnanakanabady who is
none other than the husband of the said Anuradha, In the preamble portion of
the deed of assignment, the said Anuradha is referred as daughter of
Vishwanathan, instead, as wife of Gnanakanabady. The factum of cash
consideration coupled with the fact that one of the assignees happened to be the
husband of the said Anuradha, which clearly shows that the deed of assignment
is prepared belatedly on the ante dated stamp paper. In none of the clauses of
the deed of assignment, has provided for any stop-gap arrangement to permit
the first defendant to use the trade mark and market and supply of the snuff and
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cigar stock already produced within 12-18 months from the execution of the
deed of assignment. The said theory of mutual agreement between the plaintiff
and the defendant, permitting the defendant to market and supply the snuff and
cigar already produced within 12-18 months, is invented for the first time for the
purpose of filing the suit. The statement is made that the plaintiff has applied
for registration as subsequent proprietor in the name of M/s.Nico Quality
products with the Registrar of Trade Mark, Guindy, Chennai on 19.08.2013. The
plaintiff has not come forward with any explanation for the inordinate delay of
presenting the application for registration immediately after the date of
assignment. There is no necessity for the plaintiff to wait for a long time to do
the formality of registration for 18 months. Just before filing the present suit, the
application has been thought of by the plaintiff to get over the provisions of the
Trade Marks Act, 1999.
(c) All the original copies of registration of trade marks are still lying with
the first defendant-firm. The case of the plaintiff is based on the deed of
assignment dated 15.10.2011, cannot be accepted as true only for the fact that
the original registration copies are still lying with the first defendant. No prudent
purchaser would have permitted the assignor to retain all the original document
after the execution of the deed of assignment and that too after transferring
such a huge amount of Rs.75 lakhs. The said factor makes it amply clear that the
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deed of assignment are all nothing but create and fabricated for the purpose of
filing the suit.
(d) The first defendant/partnership firm is registered under the Indian
Partnership Act of 1932 and the partnership firm is constituted by the two
partners, namely (i) S.Chandrasekaran and (ii) S.Thara. The first defendant has
been involved in the business of manufacturing and selling and dealing in the
Snuff and Cigar for several decades. The business includes the manufacturing,
branding and selling the wholesale stock of cigars, snuffs, agar-bathis, scented
sticks and perfumes, etc. The family of the first defendant comprises of
Mr.S.Chandrasekaran and his brother S.Viswanathan and the business was
roaring one and N.C.Arya Snuff and Cigar Company had business all over India.
By careful stewardship of Mr.Chandrasekaran who is the elder member of the
family, the business touched new horizon and the name of N.C.Arya Snuff and
Cigar Company, had become a reputed one and established trade mark for the
products like agar-bathis, scented sticks and perfumes, etc., There is a specific
reputation and value attached to the brand name of M/s.N.C.Arya Snuff and
Cigar Company in the trading market.
(e) The members of the family felt it appropriate to constitute a
partnership firm, in order to carry out the aforesaid business under the name and
style of N.C.Arya Snuff and Cigar Company with the said purpose and a
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partnership deed was executed between S.Chandrasekaran and S.Thara who is
the wife of his brother Viswanathan. Since the business has started to expand
and diversify, it was thought and necessary to induct one more partner in the
business. Hence, Anuradha who is the daughter of Viswanathan and S.Thara was
inducted as a partner in the business by virtue of a partnership agreement, dated
01.04.1995 and 18.06.1998. As per the said partnership agreement, the profits
and losses of the business has agreed to be divided and apportioned among the
three partners as follows, Mr.S.Chandrasekaran would get 40% and Thara
would get 35% and Anuradha would get 25%.
(f) After induction of Anuradha, the other two partners, namely the
plaintiffs were marginalised and Anuradha being young blood wanted to lead the
business. Mr.S.Chandrasekhar and S.Thara who were all along by their business
shrewdness, patience, acumen and experience to build up the business, were
marginalised by the said Anuradha. Mr.S.Chandrasekhar and S.Thara also
considering the relationship and also considering the fact a fresh approach,
would jet-pack the business to new horizons, have agreed for the said Anuradha
to conduct and lead the business. However, the business comes a cropper under
the management of the said Anuradha. The reputed partnership name
M/s.N.C.Arya Snuff and Cigar Company had to undergo heavy financial crisis
because of the rash decisions, total mis-management on the part of the said
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Anuradha. After couple of years, the roaring business and the Company which is
an un-disputed leader in India in the field of snuff and cigar have lost the name.
It is due to the reckless mis-management and the unwanted ventures of the said
Anuradha.
(g) The Company faced heavy financial crisis and at one point of time, it
was thought that it is almost possible to retrieve and rescue the business. There
were several people who had given huge amount of loan and also supplied raw
materials on credit basis. Upon noticing that the traditional family brand of
M/s.N.C.Arya Snuff and Cigar Company would collapse under the management of
the said Anuradha, the first defendant, namely Mr.Chandrasekhar and S.Thara,
who have voluntarily kept quiet and have given the space for the said Anuradha
to lead, have intervened in the business in order to rescue the same.
(h) The said Anuradha by then had realised that the business has crashed
down only because of the fault on her part and the said Anuradha being a
married lady and also having the family, felt it difficult to face the creditors. After
accepting all the mistakes, she wanted to wash her hands of the partnership
business. The said Anuradha apprehends her husband and son would also be put
into trouble by the creditors, if she is decided to continue in the firm. The said
Anuradha who is the sole reason and cause for the collapse of the business,
wanted to leave the business in hurry. Hence, the said Anuradha and her
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husband executed the separate affidavits and making amply clear that she is no
longer associated with the partnership firm, namely N.C.Arya Snuff and Cigar
Company. The said Anuradha and her husband, a partner in the plaintiff-firm
herein, had executed an affidavit to that effect on 10.08.2012 in the presence of
Notary Public at Pondicherry, stating that she has retired from the partnership
namely, M/s.N.C.Arya Snuff and Cigar Company with effect from 30.08.2012 and
on the assurance given by S.Chandrasekaran and S.Thara that they will
undertake the liability and absorb the same. Similarly, she has also relinquished
all her rights over the trade-marks and business from 01.07.2012. The husband
of the said Anuradha, namely the partner of the plaintiff herein, has also
executed similar affidavit to that effect on 10.08.2012 and that apart, a fresh
partnership agreement was executed on 01.07.2012. The husband of the said
Anuradha, namely the partner of the plaintiff herein, has also executed similar
affidavit to that effect on 10.08.2012. That apart, a fresh partnership agreement
was executed on 01.07.2012 on which also, the said Anuradha has signed as
retiring partner. Thus it is crystal clear that the partnership-firm, namely
M/s.N.C.Arya Snuff and Cigar Company shall comprise two partners, namely
S.Chandrasekaran and S.Thara for the above reasons.
(i) After the retirement of the said Anuradha, the first defendant, namely
S.Chandrasekar and S.Thara took all the strenuous efforts to settle the creditors,
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in order to run the business smoothly and their attempt to settle the creditors,
reputation and brand name had been resolved by the hard work of creditors,
reputation and brand name have been resolved by the hard work of
S.Chandrasekar and S.Thara. After several rounds of negotiations and hectic
efforts, the creditors were settled at the instance of S.Chandrasekar and S.Thara
and now, the businesses of the first respondent-firm have started to gain
momentum and brand name of N.C.Aya Snuff and Cigar Company have been re-
activated. The re-emergence of N.C.Arya Snuff and Cigar Company is only due to
the hard-work of S.Chandrasekar and S.Thara. It is to be noted that the said
Anuradha has left the firm in lurch and in the hour of need. After witnessing
N.C.Aya Snuff and Cigar Company has been roaring in the market, the said
Anuradha wanted to take a share in the credit and profits. Further, the brand-
name of M/s.N.C.Arya Snuff and Cigar Company had become the asset of the
first defendant-firm. The said Anuradha and her husband have relinquished the
rights in sharing the credits and participating in the Company by virtue of the
above-said affidavit and deed. The said Anuradha is estopped from claiming the
brand name of N.C.Arya Snuff and Cigar Company. The said Anuradha gave
assurance that she will not interfere in the management of the Company.
(j) The first defendant-partnership firm had been re-asserted in the fields
of snuff and cigar. That being so, the said Anuradha attempted to pass-off the
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trade mark of M/s.N.C.Arya Snuff and Cigar Company with the help of her
brother-in-law and husband in the name of Nico allied products, Pondicherry, by
using the brand of the first defendant. This came to the knowledge of the first
defendant. Immediately, the first defendant has lodged a Police complaint and
search has also been conducted by the concerned Police Station and they seized
the incriminating materials, which were used by the said Anuradha's proprietary
concern. She has given notice dated 24.07.2013 through the Advocate and called
upon the first defendant/firm to hand over the management to her. In the said
notice, after admitting her signature in the re-constitution of the first respondent-
Firm and her retirement from the firm, attempted to repudiate the retirement on
vague and untenable grounds. Since the other two partners have refused to
budge to her threats, she has, at present, in collusion with her husband, who is
the partner in the firm to black-mail the first respondent, has filed the present
suit.
(k) The plaintiff-firm represented by K.C.Vijay, Gnanakanabady and
Anuradha, are in active collusion with each other in bringing the present suit to
have unjust enrichment. The first defendant is no longer represented by
Anuradha, in view of re-constitution of the firm and retirement of Anuradha from
the first defendant-firm. The said Gnanakanabady had also executed an affidavit
in favour of the first defendant-Partnership firm that he would no longer claim
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any right over the registered trade marks of the first defendant-firm. The
execution of the affidavit and also the registration and also the re-constitution of
the firm, have all been admitted by the said Anuradha in the legal notice given to
the first defendant. The said Anuradha and her husband, seeing that the first
defendant is flourishing and started to revive, wanted to have a share in the
profit. Upon seeing their attempts, did not yield any fruitful results, have caused
the present suit in active collusion with the other partner K.C.Vijay.
(l) Under Section 42 of the Trade Marks Act, any assignment of the
registered trade-mark, without the goodwill of the business, will not take effect,
unless the deed of assignment is presented for registration before the Registrar
of Trade Marks, within the period of six months from the date of the execution
and in any case not exceeding the period of nine months. In the present case,
the deed of assignment was executed on 15.12.2011 and the same had been
presented for registration, even according to the statement in the plaint, is only
on 19.08.2013. Therefore, the alleged deed of assignment is having no effect on
the date of the suit and there is no cause of action for the plaintiff to file the
present suit. The alleged deed of assignment is null and void in the eye of law
and as such, the suit itself is barred. The claim of the plaintiff that it is the
registered owner of the trade-mark, cannot be countenanced in the teeth of the
statutory bar under the Trade Marks Act.
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(m) Any action for infringement of registered trade mark, would lie, by or
on behalf of the assignee only after the assignee registered himself as the
Proprietor of the trade mark in respect of goods or services in respect of which
the assignment or transmission had effect. In the present case, the defendant
came to know only after receiving the notice in the suit that the plaintiff has
made an application for transfer of registration of trade mark in their name.
Immediately, the defendant objected to the Registrar of Trade Marks, Guindy,
Chennai on 18.09.2013 and the said objection is still pending. The right claimed
by the applicant as the registered user in the suit, is not maintainable, unless
the deed of assignment is registered by the Registrar of Trade Marks under
Section 45 of the Trade Marks Act. When the plaintiff failed to prove and
establish that they have become the registered owners or assignees, as the case
may be, under Section 45 of the Trade Marks Act, no action for infringement lie,
in view of the express bar provided under Section 27 of the Trade Marks Act. The
action for passing-off, would lie only at the instance of the owner of the trade
mark and in the present case, the plaintiff could not claim to be the owner of the
registered trade mark, de-hors, the provisions of the Trade Marks Act. The
defendant, on coming to know of the fraudulent assignment deed, has also
lodged a criminal complaint against the partners of the plaintiff-firm and also the
said Anuradha and the same is pending investigation.
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(n) All the defendants are doing the business for the past four years, even
after the alleged assignment deed and they have to supply the products to
hundreds of customers all over India and abroad. The first defendant has started
to revive now only and the order of injunction is like bolt-out of the blue and put
the business of the respondent in total dis-array.
(o) There is no cause of action for filing the suit, which is barred by the
law of limitation. The suit is frivolous and vexatious and the same may be
dismissed.
4. The plaint averments in C.S.No.882 of 2013, are as under:
(i) The plaintiff is a registered partnership firm, registered under the
Partnership Act and represented by its Partners, (i) S.Chandrasekar and
(ii)S.Thara, who are presenting the plaint through their Special Power of Attorney
Raghuraman.
(ii) The family of plaintiffs had been involved in the business of
manufacturing and selling and dealing in the Snuff and Cigar for several decades.
The business includes manufacturing, branding and selling the whole-sale stock
of cigars, snuffs, agarbathis, scented sticks and perfumes, etc. The family of the
plaintiff comprises of Mr.S.Chandrasekaran and his brother S.Viswanathan and
the business was roaring one and N.C.Arya Snuff and Cigar Company, has
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business all over India. By careful stewardship of Mr.Chandrasekaran, who is the
elder member of the family, the business touched new horizon and the name of
N.C.Arya Snuff and Cigar Company, which had become a reputed one and
established trade mark for the products like agarbathis, scented sticks and
perfumes, etc. There is a specific reputation and value attached to the brand
name of M/s.N.C.Arya Snuff and Cigar Company in the trading market.
(iii) The members of the family felt it appropriate to constitute a
partnership firm, in order to carry out the aforesaid business under the name and
style of N.C.Arya Snuff and Cigar Company with the said purpose and a
partnership deed was executed between S.Chandrasekaran and S.Thara, who is
the wife of his brother Viswanathan. Since the business started to expand
diversify, it was thought and necessary to induct one more partner in the
business. Therefore, the fourth defendant, who is the daughter of Viswanathan
and Thara, was inducted as a partner in the business by virtue of a partnership
agreement deed, dated 01.04.1995 and 18.06.1998. As per the said partnership
agreement, the profits and losses of the business had agreed to be divided and
apportioned among the three partners, i.e. Mr.S.Chandrasekaran - 40%, Thara -
35% and the fourth defendant - 25%.
(iv) After induction of the fourth defendant, the other two partners of the
plaintiff, namely S.Chandrasekaran and S.Thara, were marginalised and the
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fourth defendant, being young blood, wanted to lead the business. The said two
partners of the plaintiff, namely S.Chandrasekaran and S.Thara, who were all
along by their business shrewdness, patience, acumen and experience to build
up the business, were marginalised by the fourth defendant. The said two
partners of the plaintiff, i.e. S.Chandrasekaran and S.Thara, have also,
considering the relationship and also considering the fact, a fresh approach
would jet-pack the business to the new horizon, agreed for the fourth defendant
to conduct and lead the business. However, the business comes a cropper under
the management of the third defendant. The reputed partnership name
M/s.N.C.Arya Snuff and Cigar Company had to undergo heavy financial crisis,
because of the rash decisions, total mis-management on the part of the fourth
defendant herein. After couple of years, the roaring business and the Company,
which is un-disputed leader in India in the field of snuff and cigar, had lost the
name due to the reckless mis-management and the unwanted ventures of the
fourth defendant.
(v) The company faced heavy financial crisis and at one point of time, it
was thought that it is almost impossible to retrieve and rescue the business.
There were several people who had given huge amount of loan and also supplied
raw-materials on credit basis. On seeing that the traditional family brand of
M/s.N.C.Arya Snuff and Cigar Co., would collapse under the management of the
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third defendant, the other two partners of the plaintiff, i.e. S.Chandrasekaran
and S.Thara, who have voluntarily kept quiet and have given the space for the
fourth defendant to lead, have intervened in the business in order to rescue the
same.
(vi) The fourth defendant, by then, have realised that the business has
crashed down only because of the fault on her part and further, the fourth
defendant, being a married lady and also having the family, felt it difficult to face
the creditors. After accepting all the mistakes, she wanted to wash her hands of
the partnership business. The fourth defendant further apprehends that her
husband, namely the third defendant and son would also be put into trouble by
the creditors, if she decided to continue in the firm. The fourth defendant, who is
the sole reason and cause for collapse of the business, wanted to leave the
business in hurry. Therefore, the fourth defendant and her husband, namely the
third defendant, executed separate affidavits and making it amply clear that she
is no longer associated with the partnership firm, namely N.C.Arya Snuff and
Cigar Company. The fourth defendant herein had executed an affidavit to that
effect on 10.08.2012 in the presence of notary public at Pondicherry stating that
she has retired from the partnership, namely M/s.N.C.Arya Snuff and Cigar
Company with effect from 30.06.2012 and on the assurance given by the other
two partners of the plaintiff S.Chandrasekaran and S.Thara that they will
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undertake the liability and absorb the same. Similarly, she has also relinquished
all her rights over the trade marks and business from 01.07.2012. The husband
of the fourth defendant, namely the third defendant herein, had also executed
similar affidavit to that effect on 10.08.2012. That apart, a fresh partnership
agreement was executed on 01.07.2012, on which also, the fourth defendant
signed as a retiring partner. Thus, it is clear that the partnership firm, namely
M/s.N.C.Arya Snuff and Cigar Company shall comprise two partners, namely
S.Chandrasekaran and S.Thara.
(vii) After retirement of the fourth defendant, they took all efforts to settle
the creditors, in order to run the business smoothly and their attempt to settle
the creditors, reputation and brand name, had been resolved by the hard work of
S.Chandrasekaran and S.Thara, partners of the plaintiff. After several rounds of
negotiations and hectic efforts, the creditors were settled at the instance of the
said partners of plaintiffs. The businesses of the plaintiff had now started to gain
momentum and brand name of N.C.Arya Snuff and Cigar Company, had been
reactivated. The re-emergence of N.C.Arya Snuff and Cigar Company is only due
to the hard work of the two partners of the plaintiffs, namely S.Chandrasekaran
and S.Thara. The fourth defendant left the firm in lurch and in the hour of need.
After witnessing N.C.Arya Snuff and Cigar Company had been roaring in the
market, the fourth defendant wanted to take a share in the credit and profits.
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The brand name of M/s.N.C.Arya Snuff and Cigar Company had become the
asset of the plaintiff-firm. The fourth defendant and her husband, namely the
third defendant, had relinquished the rights in sharing the credits and
participating in the company by virtue of the above said affidavit and deed. The
fourth defendant is estopped from claiming the brand name of N.C.Arya Snuff
and Cigar Company. The fourth defendant has given assurance that she will not
interfere in the management of the company.
(viii) The fourth defendant, in collusion with the third defendant,
attempted to pass-off the trade-marks of the plaintiff-Company with the help of
their brother-in-law in the name of one Nico Allied Products, Pondicherry. When
the said factum came to the knowledge of the plaintiff, they immediately lodged
a Police complaint, and a search has also been conducted by the concerned
Police and they seized incriminatory material used by the defendants 3 and 4,
especially the proprietor concern of the fourth defendant. Apprehending that the
fourth defendant and her husband would be prosecuted for infringement of the
trade mark, a notice has been given on behalf of the fourth defendant through
her advocate calling upon the plaintiff-firm to hand-over the management to the
fourth defendant. In the said notice, dated 24.07.2013, the signature in the
reconstitution of the firm and the fact of the retirement of the firm, have all been
admitted by the fourth defendant. However, she made an attempt to repudiate
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the retirement from the firm on vague and untenable grounds. Immediately, the
plaintiffs have instructed their advocate to file the suit for injunction against the
fourth defendant.
(ix) That being the situation, like a bolt out of the blue, the defendants 3
and 4 have conspired and colluded together and brought out several forged and
fabricated documents to claim ownership in respect of the trade marks registered
in the name of the plaintiff-firm and also obtained ex-parte order of interim
injunction in C.S.No.605 of 2013 on the file of this Court. The said fact of forged
and fabricated documents came to the knowledge of the plaintiff only when the
first defendant filed the aforesaid suit seeking the relief of permanent injunction
restraining the plaintiff from infringing and passing-off the trade mark. In the
said suit, two applications, namely Application Nos.667 and 668 of 2013, was
filed and ad-interim injunction was also granted in favour of the first
defendant/firm. When the notice is served in the injunction application, the
plaintiffs have filed their counter and the injunction application was argued at
length by both the plaintiff and the defendant and ex-parte order given by this
Court, was vacated on 03.12.2013.
(x) The suit in C.S.No.605 of 2013 was filed by the first defendant,
represented by the second defendant. The third defendant, who is the husband
of the fourth defendant, is also the partner of the firm and he did not appear or
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file any affidavit in the suit. The fourth defendant kept quiet and failed to appear
to corroborate or repudiate the case of the first defendant. Only when they
approached in the suit, they came to know about the documents forged and
fabricated in hand-in-glove by the defendants. The defendants fabricated an
unauthorised letter, alleged to have been issued by the partners of the plaintiff,
namely S.Chandrasekaran and Thara, which is dated 27.10.2011, authorising the
fourth defendant to assign the trade-marks. The said authorisation letter is rank-
forgery. The signature in the letter dated 27.10.2011 are found at the bottom of
the page, whereas the contents in the documents are only of four lines, which is
typed on the top of the page. There is almost a half-foot gap between the
contents of the letter and the signatures of the other two partners, alleged to
have authorised Anuradha. In fact, the fourth defendant happened to be the
daughter of S.Thara and also the niece of the other partner Chandrasekar. The
fourth defendant also has been the partner of the firm for more than a decade.
The fact that the plaintiff-firm has undergone several vicissitudes of fortune
during the last couple of years before it started its revival recently. During those
period of turmoil, the partners used to give blank signed papers to the creditors
and customers. All the partners used to give such signed papers to meet out the
demands of the clients, customers and the creditors. There are possibilities for
the said Anuradha to misuse those signed blank papers by the other two
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partners, namely Thara and Chandrasekar and mis-used for fabricating the
present authorisation letter. The plaintiffs have an opportunity of witnessing the
photocopy of the said letter and they are of the firm view and opinion that those
signatures are not their own signatures and it is a clear fabrication and rank-
forgery.
(xi) Based upon the forged authorisation letter, the fourth defendant
alleged to have executed a deed of assignment, representing the plaintiff-firm to
and in favour of the first defendant-firm, represented by its two partners, namely
the defendants 2 and 3 herein. The third defendant, who is the partner of the
first defendant and also the beneficiary of the deed of assignment, is none other
than the husband of the fourth defendant. The deed of assignment is reciting
that a huge sum of Rs.75,00,000/- is alleged to have been paid by the first
defendant-firm to and in favour of the fourth defendant in cash and the receipt
of which is stated to have been acknowledged by the fourth defendant. The cash
transfer exceeding Rs.20,000/- should be made only through cheque/Demand
Drats or bills. The recital of cash transfer is only a name-sake one and actually,
no such cash transfer had been made as alleged in the deed of assignment. The
first defendant has deliberately failed to file the Income Tax Return for the
relevant period and the defendants 3 and 4 never made any appearance or filed
document in the suit. The fact that the Income Tax Returns were not filed itself,
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would, go miles to prove that the deed of assignment had been cooked up as an
after-thought. The alleged authorisation letter, the deed of assignment, dated
15.12.2011, were all manufactured subsequent to the raid at Pondicherry.
Subsequent to the alleged assignment, two congratulatory letters, alleged to
have been given by the partners, were filed and the said two letters are also the
manipulation of the defendants and rank-forgery. The said two letters were
fabricated for giving the colour of genuineness to the fraudulent transaction. The
original deed of assignment is with the defendants and hence, the photocopy
filed in C.S.No.605 of 2013, is filed presently and the certified copy is applied.
(xii) The deed of assignment is an un-stamped one and it must be duly
stamped under the Indian Stamp Act. The stamp duty exigible on the deed of
assignment is 6% of the value of the assignment. In the present case, the value
spelt out in the deed of assignment, is Rs.75,00,000/- and the same must carry
stamp duty at the rate of 6% is Rs.4,50,000/-. That apart, the deed of
assignment, dated 15.12.2011 is not coupled with goodwill. Under Section 42 of
the Trade Marks Act, any assignment without the goodwill of the business,
should be presented for advertisement and registration within a period of six
months from the date of assignment, failing-which, the assignment shall not
have any effect. In the present case, even according to the defendant, the deed
of assignment is presented for registration only on 19.08.2013, i.e. nearly 18
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months subsequent to the date of assignment. The defendants came forward
with the explanation that there is an oral arrangement between the parties
permitting the plaintiff to carry on the business and clear the stock for a period
of 18 months. However, no such clause has been stipulated in the deed of
assignment, dated 15.12.201. The factum of oral arrangement is nothing but a
figment of imagination conjured up in the minds of the defendants to serve the
purpose of the suit. All the original copies of the certified trade-marks are lying
only with the plaintiff-firm.
(xiii) In the course of argument and enquiry in Application Nos.667 and
668 of 2013 in C.S.No.605 of 2013, several documents were also pressed into
service in order to corroborate the bogus claim of the first defendant. Those
documents are not submitted along with the plaint and all those documents were
filed subsequent to the suit and filing of the counter affidavit. One of those
documents in the alleged letter dated 09.12.2011, stated to have been issued by
S.Chandrasekar vehemently denies his signature in the said letter. The letter
itself is a rank-forgery and it is originated by employing fraud, forgery and
manipulation on the part of the defendants 1 to 4. The second defendant
negotiated for commission with the creditors for settlement. Taking advantage of
the acquaintance, he joined the hands with the defendants 3 and 4 to have
unjust enrichment and in collusion, they have manufactured all the documents to
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create right.
(xiv) On the ground that the deed of assignment may be set aside as
illegal and non-est in the eye of law, the plaintiff alleges as follows:
(a) The alleged authorisation letter, dated 27.10.2011 is a rank-forgery.
(b) The deed of assignment is executed by the fourth defendant in favour
of the first defendant, in which the third defendant, namely the husband of the
fourth defendant, is also the partner.
(c) The alleged cash consideration of Rs.75,00,000/- is invented only for
the purpose of the deed of assignment. There is no truth about the transmission
of the consideration of Rs.75,00,000/- and no proof is available with the
defendants.
(d) The deed of assignment itself is brought to light after 18 months and
presented for registration only after 18 months from the date of execution.
Immediately, after presenting the deed of assignment for registration, the first
defendant rushed up to the Court and filed a suit and sought an interim
injunction on the basis of the deed of assignment, dated 15.12.2011 and also by
citing the same is presented for registration on 19.08.2013.
(e) The third defendant failed to intimate anything about the alleged
assignment in her legal notice, which is three months preceding the notice and
claimed absolute right in the business.
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(f) The deed of assignment is without good-will of the business and
hence, the same shall be presented for registration within a period of six months
from the date of execution under Section 42 of the Trade Marks Act, whereas the
assignment deed is presented for registration, nearly after 18 months and hence,
it becomes invalid and non-est in the eye of law.
(g) The deed of assignment is unstamped and therefore, the same would
not confer any right before the Court of law.
(h) Apart from the above facts, the background an circumstances, namely
the retirement of the fourth defendant from the plaintiff-firm and the execution
of the affidavit by the third and fourth defendants, disowning any relationship
with the trade mark of the plaintiff/firm, would only establish the fact that the
deed of assignment had been fabricated in order to have unjust enrichment by
defrauding the plaintiff.
(i) A criminal complaint is filed in Crime No.1864 of 2013 on the file of E.4,
Abhiramapuram Police Station against the defendants 2 to 4 for cheating, fraud
and forgery.
(j) The relief of injunction granted was vacated by the Court, by order
dated 03.12.2013 in A.Nos.667 and 668 of 2013.
(xv) The plaintiff is the lawful and registered owner of the trade marks
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and the defendants claimed unlawful right over the trade marks and filed the suit
in C.S.No.605 of 2013 and the first defendant, even after dismissal of the
injunction application, is having the temerity to make a publication in Anand
Bazaar Patrika issue, dated 04.12.2013, claiming right through the assignment
deed, dated 15.12.2013 and make clear its intention to use the trade mark to the
prejudice and disadvantage of the plaintiff and hence, the present suit filed for
declaration and injunction.
(xvi) The present suit is filed within a period of limitation as mandated
under the Limitation Act.
5. The defendants 1 and 2 in C.S.No.882 of 2013 have filed written
statement stating as under:
(a) The second and third defendants were partners in the first defendant-
firm and later, the third defendant had resigned from the partnership of the first
defendant-firm by dissolving it on 06.11.2014 and hence, the first defendant-firm
became a sole proprietorship concern, managed by the second defendant as sole
proprietor of the first defendant-firm.
(b) The plaintiff-firm was the registered owners and Proprietors of the
trade mark No.179074 in Class 34 of the Trade Marks Act and was engaged in
the manufacture and sale of tobacco products mainly confined to snuff using
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these marks.
(c) The fourth defendant is the daughter of S.Thara and the niece of
S.Chandrasekaran, who are the partners of the plaintiff. The partners of the
plaintiff, namely Mr.Chandrasekaran and Mrs.Thara on 18.06.1995 had re-
constituted their partnership firm by including the fourth defendant was a
Managing Partner in the plaintiff-firm. The plaintiff-firm was once acquired
reputed name in the tobacco business, they have fallen into hard times and had
various debts with numerous creditors, apart from heavy losses due to the mis-
management of the plaintiff's employee, viz., Venkatesan who had mis-managed
the affairs, siphoned-off the firm's funds and misappropriated the same.
(d) The partners of the plaintiff, i.e. S.Chandrasekaran, S.Thara and
V.Anuradha approached the second defendant to help them to clear the various
debts of the plaintiff/firm. The second defendant agreed to help owing to the
close association of the plaintiff's family. The defendant submits that since the
plaintiff had authorised the second defendant to deal with the banks to clear
their loans, the second defendant has approached various Banks on behalf of the
plaintiff as their representative to clear the debts of the plaintiff. The second
defendant is having the e-mail communications from various Banks
acknowledging the second defendant as the acting representative of the plaintiff
for clearing their dues.
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(e) Inspite of best efforts to help the plaintiff-firm, the large scale losses
and debts were made by saving the plaintiff's business impossible. Various
factories of the plaintiff had closed down and their sales tax registration was
cancelled as well. It was during this time that the partners of the plaintiff offered
the second defendant in respect of the plaintiff's trade marks so that some of the
plaintiff's debts would be extinguished and the second defendant could start a
new business venture. Since he had no experience in the Tobacco industry, the
plaintiff recommended him to start a business venture with the fourth defendant,
who is the third defendant's husband, since the fourth defendant had years of
experience in the Tobacco industry. The second and third defendants together
started the first defendant-firm and agreed to purchase 10 trade marks of the
plaintiff.
(f) The first defendant represented by their partners, namely the second
and third defendant through a deed of assignment, dated 15.12.2011 with the
plaintiff-firm became the authorised owners of the trade marks -- 454103,
454106, 454109, 592763, 180448, 180449, 559308, 179074 and 194656. The
deed of assignment mentioned that the first defendant acquired "All benefits" of
the marks in question, which clearly indicated that the first defendant had
acquired all benefits of the marks including the good-will associated with the
mark.
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(g) The Bank accounts of the plaintiff-firm in Axis Bank, Barclays Banks
and various other Bank accounts had all been frozen. It was thus requested by
the plaintiff's partners that the second defendant pay the consideration for the
above authorised trade marks in cash and accordingly the payment was made.
After the defendant made arrangements to pay the consideration in cash, the
above authorisation deed was entered and the first defendant became the owner
of the marks in question.
(h) The plaintiff-firm had various stock in the trade and had requested the
second defendant time for 12 to 18 months to clear the same, after which the
first defendant could register the authorisation deed. The trade marks were
assigned with the good-will associated with the marks and so, the defendant filed
Form TM-24 under Section 45 of the Trade Marks Act for change of registered
owner in favour of the first defendant. The second defendant, in the meanwhile,
began contacting dealers and distributors across India and the manufacture of
the assigned marks commenced from August 2013 and the first consignment
was dispatched on 21.08.2013 from the defendant's factory at Puducherry to one
T.Balaji, a distributor in Andhra Pradesh. The period requested by the plaintiff-
firm had expired and so, the defendant had begun their manufacture and sale of
the products.
(i) The defendants 1 and 2 were shocked to find out that even after the
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expiry of the period requested by the plaintiff to clear their excess stock the
plaintiff's were continuing to manufacture the products assigned to the first
defendant. The defendants 1 and 2, left with no other choice, filed C.S.No.605 of
2013 praying for permanent injunction restraining the plaintiff's men and agents
from infringing and passing-off the defendant's marks before this Court and the
same is pending. Pending the defendant's suit, it was found that the plaintiff had
applied for fresh trade marks changing the name "N.C.Snuff" to "N.C.Stuff" and
"N.C.SNUFF" etc., in October 2012 and 25.02.2013 respectively under Class 34
for snuff, cigar articles, matches and tobacco products. The defendant(s) also
state that it was found out that the fourth defendant was removed as a partner
of the plaintiff.
(j) This Court granted ad-interim injunction in favour of the first defendant
with regard to their applications O.A.Nos.667 and 668 of 2013 praying for
temporary injunction restraining the plaintiff's men and agents from infringing
and passing-off the first defendant's marks. However, after contest, the first
defendant's application for temporary injunction was dismissed and the present
suit was filed by the plaintiff praying for a relief of declaration that the deed of
assignment in favour of the first defendant is void and also for permanent
injunction restraining the first defendant's men and agents from infringing and
passing-off the alleged trade marks of the plaintiff.
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(k) The business of the plaintiff was already in doldrums before the fourth
defendant took over as partner.
(l) The allegation of the plaintiff that the fourth defendant is responsible
for the financial ruin of the plaintiff-firm, is false. One Venkatesan, who was an
employee of the firm, had mis-managed and misappropriated the plaintiff's funds
for a number of years, cased the plaintiff's financial problems. The partners of
the plaintiff, viz., S.Chandrasekaran and S.Thara never intervened to save the
business, all the partners had requested the second defendant to save the
business, all the partners had requested the second defendant, offered monetary
support to the plaintiff-firm and it was in pursuance of the same, the partners of
the plaintiff assigned 10 trade marks to the first defendant. The plaintiff-firm
comprises entirely of the family member of S.Chandrasekara and S.Thara, the
partners of the plaintiff herein. The fourth defendant is the daughter of S.Thara
and niece of S.Chandrasekaran and in fact, the Power Agent of the plaintiff's
partners who have filed the present suit, is himself the nephew of the plaintiff's
partner S.Thara and is the first cousin of the fourth defendant. The family of the
plaintiff was not happy that their trade marks were assigned to the first
defendant and that their business was closing down as their sales tax registration
was cancelled and most of their factories had been shut down and were
therefore unable to do any business and so they have conspired to infringe and
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pass-off the defendants assigned marks by illegally manufacturing and
distributing the first defendant's assigned marks. The only hindrance in the
plaintiff's clandestine plan, was the fourth defendant, since she is the wife of the
third defendant, who was a partner in the first defendant, would not allow them
to illegally manufacture the infringe the defendant's authorised marks. The family
members of the plaintiff, including the plaintiff's partners and their authorised
Power of Attorney, were able to pressurise and force the fourth defendant to
resign from her partnership in the plaintiff-firm. The allegation of the plaintiff in
paragraph 6 of the plaint, is a blatant lie, which was fabricated for the purpose of
the suit, suppressing the real illegal actions of the plaintiff. Assuming without
admitting that the fourth defendant is estopped from the management of the
firm, the deed of assignment was prior to her resignation at the relevant point of
time when the assignment of trade marks took place and the fourth defendant
had the power to do so, as she was the Managing Director of the plaintiff-firm at
that point in time and had the power to assign the marks in favour of the first
defendant.
(m) The allegations with regard to collusion between the defendants 1 and
2 and defendants 3 and 4 and the allegations of forgery and fabrications of
documents, are denied by the defendants 1 and 2. The plaintiff, after assigning
the trade marks in favour of the defendants 1 and 2, now wanted to go back on
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their valid deed of assignment and are alleging forgery to defeat the defendants
1 and 2's valid rights over the marks. Further, the plaintiff-firm had been black-
balled in the industry due to years of mis-management and fraud indulged by the
plaintiff's partners, their sales tax registration cancelled and most of the plaintiff's
factories have been shut down. This is a case where an assignor of the mark
subsequent to assigning the marks in favour of an assignee, upon receiving
consideration, continues to illegally sell the marks behind the assignee's back,
then alleges forgery of the assignment deed and then tries to get an injunction
against the assignee. The second defendant helped the plaintiff's partners with
their financial problems and had paid Rs.75 lakhs to acquire the above said trade
marks and in return, the plaintiff had been continuing to sell the defendant's
marks and then accuse the defendants 1 and 2 of forgery. With regard to the
defendants' application Nos.667 and 668 of 2013, they were dismissed by this
Court holding that to test the genuineness of the assignment deed, was a
subject-matter for trial and the applications were dismissed accordingly.
(n) The allegation that the defendants 1 and 2 committed the crime of
forging the letter of authorisation in favour of the fourth defendant, is denied by
the defendants 1 and 2. They are in no way connected with the authorisation
letter, as it was entered into between the plaintiff's partners and the fourth
defendant who was the managing partner at that point of time and the plaintiff,
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by saying that the said authorisation letter entered into between the said
S.Chandrasekaran, S.Thara and V.Anuradha, is forged by all the defendants, is
only ruse to hoodwink the Court into believing that the defendants 1 and 2 have
colluded together to defeat the plaintiff, but the reality is the inverse. The
plaintiff's allegation of forgery is a convenient lie to create doubt as to the
authenticity of the deed of assignment. The defendants 1 and 2 state that
plaintiff's just by saying the contents of the letter dated 27.10.2011, is only 4
lines, but the signature is found at the bottom of the page, cannot prove forgery.
The averment that the plaintiff used to have blank papers with their signature, is
not known to the defendants 1 and 2, as he was not involved in the functioning
of the firm, but only provided monetary support to them during their times of
distress, and so, the defendants 1 and 2 cannot comment on the same.
(o) The plaintiff is trying to allege forgery of all documents without an iota
of proof under the impression that an of-spoken lie will take on the colour of
truth. The allegations with regard to filing of Income Tax Returns and
appearance of defendants 3 and 4, are all tactics to distract the Court from the
deceit and fraud which the plaintiff had committed. The raid in Pondicherry is not
connected with the defendants 1 and 2.
(p) The defendants 1 and 2 further stated that there is no improper
stamping of the deed of assignment and the case of the defendants 1 and 2 is
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not mitigated, as the correct stamp duty has now been paid and corrected by the
defendants 1 and 2 as per Section 35 of the Indian Stamp Act. As per the
assignment deed, the first defendant acquired "all benefits" of the mark, thereby
clearly indicating that good-will is assigned to the first defendant. Since the
assignment was with good-wil as per the Act, no time limit exists for registering
the same. Hence, the plaintiff's contention that the assignment was without
good-will and the defendants 1 and 2 had six months to register the same, is
denied. It is for the Court to decide about the weather assignment was with or
without goodwill.
(q) The allegation that the second defendant had negotiated for
commission with the plaintiff's creditors for settlement, is an incomplete sentence
the plaintiff has not mentioned as to what the commission is, who are the
creditors, nor has the plaintiff mentioned as to what the settlement is.
(r) The facts as stated by the plaintiff that the deed of assignment should
be declared as void, are all based on hear-say and the facts have all been cooked
up to create doubt as to the validity of the assignment deed.
(s) The plaintiff is not the registered owners of the mark and are illegally
manufacturing the products till date. At the risk of repetition, the defendants 1
and 2 state that the plaintiff's have black-balled in the tobacco industry and their
sales tax registration, has also been cancelled, all the products sold by the
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C.S.(Comm.Div).Nos.605 and 882 of 2013
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plaintiff, are illegal. The plaintiff, after receiving the money from the defendants
1 and 2 for the trade-marks are trying to cheat the defendants 1 and 2 and
illegally take back the marks by playing fraud before Court. The defendants 1
and 2's interim applications were dismissed, because, this Court was of the view
that the issues of the defendants 1 and 2's case can only be decided by trial.
This Court has not passed any order restraining the defendants 1 and 2 from
carrying on the sale of their product, and so, the defendants 1 and 2 had every
right to make their publication in Anand Bazaar Patrika issue dated 04.12.2013.
It is not the intention of the defendants 1 and 2 to use the mark at the prejudice
and disadvantage of the plaintiff. The plaintiff is the person who has been
infringing the defendants 1 and 2's mark.
(t) The plaintiff has no cause of action to file the present suit and all the
allegations made in the plaint, are false, fabricated and based on hear-say. The
plaintiff has not come before the Court with clean hands and the defendants 1
and 2 pray that the present suit may be dismissed, as the plaintiff suppressed
facts.
6. The plaint averments, in brief, in C.S.No.587 of 2015, are as follows:
(i) The first plaintiff is a partnership firm, registered under the Indian
Partnership Act and the partners are: S.Chandrasekar, S.Thara, Kr.Ragurramun
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Krishnadhas, V.Shankar Amarnath. The second plaintiff is a proprietorship
business and the third plaintiff is partnership business. The second plaintiff is
manufacturing and packing the snuff products on the order of the first plaintiff
and the third plaintiff is marketing the products of the first plaintiff and both of
them are authorised agents of the first plaintiff.
(ii) The first plaintiff/firm was constituted out of the family members. The
family of the partners in the plaintiff/firm have been involved in the business of
manufacturing, selling and dealing in Snuff, Cigar for several decades. The
business includes manufacturing, selling and dealing in Snuff, Cigar for several
decades. The business includes manufacturing and branding and selling the
wholesale stocks of cigars, snuffs, agarbathis, scented sticks and perfumes etc.
The proprietors of the plaintiffs 2 and 3 are also the relatives of the partners of
the first plaintiff/firm.
(iii) The plaintiff/firm has also obtained several registered trademarks in its
name for marketing the snuff and cigar products. The first plaintiff/firm is also
branding and marketing the products under the name an style of N.C.Snuff with
distinctively identifiable mark and logo. The two trademarks and logo as
scheduled in the plaint, also belong to the plaintiff/firm, along with the registered
trademarks. The schedule mentioned trademarks were not registered and
however, the first plaintiff had been branding and marketing their products by
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exclusively using the schedule mentioned trademarks for more than 15 years.
Thus, the plaintiff/firm is the sole and absolute owner of the said trademarks and
only the plaintiff and their authorised assignees and licensees are entitled and
permitted to use the said trademarks. The plaintiff has also recently applied for
registration of the trademarks with the Registrar of Trade Marks.
(iv) The trademarks and logos in this case in the form of laminated
pouches, have been ordered and used for branding and marketing snuff and
cigar products manufactured and marketed by the first plaintiff/firm through the
second and third plaintiffs for more than a decade. The Bills for purchasing the
laminated pouches containing the impugned trademarks dated from 18.06.2011
to 11.08.2014, are shown by the plaintiff in the plaint. The photo-copies of the
invoices from the y ear 2011, are also filed along with the plaint. The plaintiff is
the sole and absolute owner of the impugned trademarks used in the form of
pouch and except the plaintiff or its lawful assignees, no one is entitled and
permitted to use the impugned trademarks for branding the snuff and cigar
products.
(v) The defendant is a partnership firm, recently started in the year 2011.
The partner of the defendant-firm, viz., K.C.Vijay, was an acquaintance of the
partners of the first plaintiff/firm. When the first plaintiff/firm was in dire straits
due to the mis-management of the erstwhile partner Anuradha, the partner of
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C.S.(Comm.Div).Nos.605 and 882 of 2013
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the defendant-firm, viz., K.C.Vijay approached the plaintiff-firm and shown
himself as a trust-worthy friend. However, his real intention was to grab the
entire market of the plaintiff-firm and to have unjust enrichment. The said
K.C.Vijay and the erstwhile partner Anuradha and her husband Gnana Kanabady,
have colluded together and created a fraudulent assignment deed with respect to
the registered trademarks standing in the name of the first plaintiff/firm. The
said assignment deed, dated 15.12.2011 is a fabricated and rank forgery and the
same is non-est in the eye of law. The said deed of assignment dated
15.12.2011 is challenged by the first plaintiff / firm in C.S.No.882 of 2008 on the
file of this Court and the same is still pending.
(vi) The defendant herein filed a suit for injunction against infringement
and passing-off the registered trademarks on the basis of the alleged deed of
assignment dated 15.12.2011 as against the plaintiffs and their lawful assignees
in C.S.No.605 of 2013 on the file of this Court. The defendant also filed an
application for interim injunction in O.A.Nos.667 and 668 of 2013 in C.S.No.605
of 2013 on the file of this Court. The plaintiff has filed a counter affidavit and on
contest, the interim injunction applications were dismissed by doubting the deed
of assignment dated 15.12.2011. The defendant herein preferred O.S.A.Nos.24
and 25 of 2013 and the same was also dismissed and direction was given for
expeditious disposal of the suit in C.S.No.605 of 2013 and another suit filed by
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C.S.(Comm.Div).Nos.605 and 882 of 2013
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the plaintiff in C.S.No.882 of 2013.
(vii) The recitals in the deed of assignment only speak about the
assignment of the registered trademarks and the deed of assignment itself is
being challenged by the plaintiff in C.S.No.882 of 2013 and the genuineness of
the deed of assignment has not been believed by this Court in O.A.Nos.667 and
668 of 2013 in C.S.No.605 of 2013. Even otherwise, the deed of assignment is
only with respect to the registered trademarks and the same does not include
either the business or the goodwill of the plaintiff/firm in relation to the snuff and
cigar products. Therefore, the deed of assignment dated 15.10.2011 would not,
by any stretch of imagination, permit or authorise the defendant to use the
trademarks in question, for which the first plaintiff is the sole and exclusive
owner and no assignment was also effected to the defendant herein at any point
of time.
(viii) The defendant is using the impugned trademarks for the packaging
of their snuff products and marketing of the same without obtaining either
permission or assignment from the plaintiff/firm.
(ix) The defendant is using the impugned trademarks exclusively
belonging to the plaintiff to sell snuff and cigar product, the plaintiffs are left with
no other relief or alternative means, except to approach this Court seeking for
the relief of permanent injunction restraining the defendant from passing-off its
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C.S.(Comm.Div).Nos.605 and 882 of 2013
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snuff and cigar products in the name of the plaintiff's trademark. Hence, the
plaintiff has filed the present suit. The plaintiffs have also suffered damages and
loss in the business due to the illegal action of the defendant and for which, the
plaintiffs are entitled to compensation.
7. The defendant has filed written statement stating as follows:
(i) The defendant is a proprietorship concern and K.C.Vijay is the sole
proprietor of the defendant. The defendant is young entrepreneur, engaged in
various business activities including manufacturing, marketing and selling snuff
and allied products falling. The defendant runs state-of-the art manufacturing
unit in Pondicherry for manufacturing quality snuff products by procuring best
quality raw material and delivers high quality products in the market. The
defendant uses series of trademarks in the business for selling snuff and other
allied products. The defendant markets and conduct business in all major cities in
India, covering nook and corner including sub-urbans and villages. The
defendant had also got good market in Andhra Pradesh, Kerala, Karnataka,
Kolkata, apart from Tamil Nadu and Pondicherry. The defendant spent
considerable time, painstaking efforts, money to promote the brand in question,
in the market by virtue of which the mark NC Snuff is solely associated with the
defendants and none else.
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(ii) Earlier, the defendant was a partnership firm, consisting of two
partners, namely K.C.Vijay and of Mr.Vijay and Gnanakanabady, who purchased
the trademarks along with the good-will of the business by way of an assignment
deed, dated 15.12.2011 from S.Chandrasekaran, S.Thara and V.Anuradha
trading as M/s.N.C.Arya Snuff and Cigar Co.
(iii) The defendant, after acquiring the trademarks, filed appropriate
request before the trademark office in Form TM-24, dated 19.08.2013 under
Sections 45 and Rule 68 of the Trademarks Act, 1999 and the Trademark Rule,
2002.
(iv) The defendant's partnership firm, upon gaining knowledge that after
assigning the trademarks with goodwill, S.Chandrasekaran, S.Thara and
V.Anuradha trading as M/s.N.C.Arya Snuff and Cigar Co., along with other
persons, started manufacturing and selling products under the same name "NC
Snuff" in the market and in order to protect the rights of the defendant's
partnership firm and to stop the infringers, a suit was filed seeking for:
(a) grant of permanent injunction restraining the defendant, its men,
agents, servants or persons acting on their behalf from infringing the plaintiff's
registered Trade Mark bearing Nos.454103, 454106, 454109, 592763, 180448,
180449, 559308, 178484, 179074 and 194656 in Class 34, in any manner, either
by using the plaintiff's word mark and/or logo or otherwise in relation to the
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products manufactured and marketed by the defendants.
(b) to grant a permanent injunction restraining the defendant, their men
agents, servants or persons acting on their behalf from passing-off the products
manufactured and marketed by them using the plaintiff's trademark or any other
mark deceptively similar or closely resembling the plaintiff's mark, in any manner
either by using the plaintiff's word mark and/or logo or otherwise in relation to
the products manufactured and marketed by the defendants.
(v) O.A.Nos.667 and 668 of 2013 in the above suit C.S.No.605 of 2013
was filed seeking for interim injunction restraining the respondents from
infringing and passing-off of the applicant's registered trademark Nos.454103,
454106, 454109, 592763, 180448, 180449, 559308, 178484, 179074 in Class 34
of the Trade Marks Act, in any manner, pending disposal of the suit. Though this
Court granted interim injunction, the said applications later was dismissed on
03.12.2014. During such time, the defendants in C.S.No.605 of 2013,
approached this Court by filing a counter suit in C.S.No.882 of 2013, seeking
injunction against the defendant's partnership firm, but no order had been
passed till date.
(vi) The defendant's partnership-firm during the pendency of the suit, paid
the deficit stamp duty of Rs.6 lakhs to the assignment deed on 09.01.2014 and
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had produced it before the Division Bench of this Court, while moving
O.S.A.Nos.28 and 29 of 2014.
(vii) The said O.S.As. were preferred against the dismissal of O.A.Nos.667
and 668 of 2013 and the same stood disposed of by consent mainly on the
following counts apart from procedural aspects:
"(i) The appellant does not press the appeals, but
it is made clear that any opinion expressed in the
impugned order is only prima facie in character and will
not prejudice the appellant at the stage of trial.
(ii) The respondents do not press the interim
application in their suit."
(viii) The defendant's partnership during the pendency, was dissolved and
a new sole proprietorship concern was created with K.C.Vijay as the sole
proprietor and now, the present defendant has become the absolute owner of all
the N.C.Snuff trademarks by virtue of assignment deed, dated 06.11.2014
entered into between K.C.Vijay and Z.Gnanakanabady. The defendant, in order
to record the change, had filed appropriate request before the trademark office
in Form-24, dated 20.03.2015.
(ix) The defendant's partnership during the pendency, was dissolved and a
new sole proprietorship concern was created with K.C.Vijay as the sole
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proprietor. Now, the present defendant had become the absolute owner of all
the N.C.Snuff trademarks by virtue of an assignment deed,dated 06.11.2014
entered into between K.C.Vijay and Z.Gnanakanabady. The defendant, in order
to record the change, had filed appropriate request before the trademark office
in Form-24, dated 20.03.2015.
(x) Mrs.V.Anuradha, one of the partners of the present plaintiff, had given
an affidavit of declaration to the defendant, confirming that Rs.75 lakhs was
received on behalf of N.C.Arya Snuff and Cigar in cash, by her, with the
knowledge and consent of the other partners as lawful consideration for the
assignment of the subject trademarks and since the matrix of the interlinked with
various facts and events, it is necessary to state the events as below:
(a) The first plaintiff was originally represented by S.Chandrasekarar and
S.Thara as partners. Anuradha is the daughter of S.Thara and the niece of
S.Chandrasekaran.
(b) On 18.06.1995, the said two partners had re-constituted the
partnership/firm by including the said Anuradha as a managing partner.
(c) The first plaintiff could not run their business due to severe financial
problems and debts.
(d) K.C.Vijay (representing for the defendant) was introduced to the first
plaintiff partners by the close friend Mr.Srinivasan, who is the son of S.Thara.
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(e) Mr.Vijay is normally very helpful character, he was approached by
S.Chandrasekaran, S.Thara and V.Anuradha, to help them to clear their various
dates.
(f) Mr.Vijay was authorised by the plaintiff No.1 to deal with the Banks in
December 2011 to clear their loans, Mr.Vijay had approached various Banks on
behalf of the first plaintiff as their representative to clear their debts.
(g) Mr.Vijay has got e-mail communications from various Banks
acknowledging/recognising him as the representative of the first plaintiff for
clearing their debts. The proof of such communications are available with the
plaintiff.
(h) Inspite of Mr.Vijay's best efforts to help the first plaintiff, the large
scale losses and debts made saving the first plaintiff's business, impossible.
Various factories of the first plaintiff had been closed down and their sales tax
registration was cancelled.
(i) It was during this time that the 10 trademarks was assigned to the
defendant for clearing the first plaintiff's debts and also suggested that the
plaintiff could start a new business venture using their 10 trademarks.
(j) Since the defendant had no experience in the Snuff industry, the first
plaintiff has recommended one Mr.Z.Gnanakanabady to the defendant to take
him as partner to start a new business venture. The said Z.Gnanakanabady, who
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is the husband of Anuradha, has experience in running a Snuff business, as he
already has a firm which manufactures and sells tobacco and Snuff products
called 'Nico allied Products' at Puducherry
(k) The first plaintiff executed an assignment deed on 15.12.2011
transferring the above mentioned ten trademarks. As per the said deed of
assignment, it is clear, inter-alia, that the mark was assigned with "ALL
BENEFITS" of the said ten trademarks including the goodwill associated with the
marks.
(l) At that point of time, the first plaintiff's Bank Accounts maintained at
M/s. Axis Bank, Barclays Ban and other accounts had all been frozen. Hence, the
first plaintiff's partners stated that if cheques are issued, the amount would be
appropriated by their Banks for long over-due loan accounts and requested to
pay a sum of Rs.75 lakhs in cash as consideration for the assignment deed,
dated 15.12.2011.
(m) The said deed of assignment was signed by V.Anuradha as partner-
cum-authorised representative of the first plaintiff/firm and authorisation letter,
dated 27.10.2011 was presented, wherein all the partners of the first
plaintiff/firm and had given an authority in favour of the said V.Anuradha to
execute the assignment deed. After being satisfied with the letter of
authorisation, the consideration was paid in cash to partner of the first plaintiff-
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C.S.(Comm.Div).Nos.605 and 882 of 2013
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V.Anuradaha. Mr.Vijay was personally aware that the amount handed over in
person to the said V.Anuradha, was received with the knowledge and consent of
the other partners of the first plaintiff/firm and the said amount went towards
settling several creditors of the first plaintiff, who were paid in cash. The plaintiff
is having sufficient proof for payment of consideration to the first defendant.
(n) The first plaintiff, by letter dated 21.06.2012, represented by their
partner Mr.Chandrasekaran explained their difficulty in furnishing the original
trademark certificates, as the first plaintiff's creditors had locked the factory,
their partners were unable to enter into the premises and retrieve the original
trademark certificates.
(o) Originally, the defendant's entity was a partnership firm which consists
of Mr.Vijay and Gnanakanabady as partners. The said firm was subsequently
registered on 17.10.2013 under the Society's Registration Act.
(p) On 06.11.2014, one of the partners Mr.Z.Gnanakanabady has resigned
from the defendant's partnership/firm by deed of dissolution and thereby the
said Z.Gnanakanabady has relinquished all his rights in the trademark marks,
including the copyrights in the artistic works in favour of K.C.Vijay upon receipt
of his settlement amount.
(q) Thus, K.C.Vijay has become the sole proprietor of the trademarks and
is managed by him exclusive.
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(xi) The first plaintiff, before filing the the suit in C.S.No.882 of 2013,
clandestinely filed trademark application on 10.10.2012 claiming false
proprietorship for registration of the mark claiming association wit the earlier
registered mark NC SNUFF under Registration No.559308, which was one of the
subject mark of the assignment deed dated 15.12.2011. The first plaintiff, on
20.05.2014, filed another trademark application in Class 34, claiming false
proprietorship. The first plaintiff, in their letter dated 04.12.2015 claimed
ownership for all the 10 assigned marks by completely concealing the fact of
assignment deed and the pending litigation between the parties. The conduct of
filing new applications by the plaintiff No.1 after assigning the mark shows their
fraudulent way of claiming proprietorship and also demonstrates their unclean
approach towards this Court and before the trademark office to obtain
registration by fraud. Therefore, it is clear that the first plaintiff, without any
locus-standi, fraudulently approached this Court for orders which is not
permissible and liable to be dismissed.
(xii) The first plaintiff, who assigned the NC SNUFF marks to the
defendant, openly agreed (in page 3 of the Assignment deed dated 15/12/2011)
that the Plaintiff No.1 covenants with the Defendants that they will not infringe
nor use a mark identical with trademark hereby assigned nor use another
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trademark nearby resembling it as to be likely to deceive or cause confusion in
the course of trade mark, in relation to the goods in respect of which it is
registered and in the manner as to render the use of the mark likely to be taken
either as being a use of the said trademark or to import a reference to the
defendant. Therefore, the present plaintiff can never file or claim any right over
the trademarks.
(xiii) According to the defendant, the present plaint is liable to be rejected
as against the defendant for the reasons stated below:
(a) The instant suit has been filed by the plaintiff based on its alleged
pending trademark applications for the NC SNUFF, claiming false proprietorship.
The alleged trademarks were filed after assigning the mark to the defendants,
which shows their bad intention to claim the false proprietorship and there exists
no ownership rights and legally enforceable right to the plaintiff.
(b) The plaintiff has come to this Court with unclean hands by suppressing
the fact before the trademark office and not fully disclosing material facts before
this Court and relying on the pending trademark applications for claiming rights.
The present conduct of the plaintiff is a clear case of fraud committed on this
Court by suppressing the information and tried to obtain an ex-parte interim
injunction order.
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(c) The first plaintiff, at the time of assigning the marks to defendant,
specifically agreed not to use any identical or similar marks to NC SNUFF, and
therefore, there is no question of the plaintiff now claiming any rights to use the
mark NC SNUFF or right to stop third parties including the present defendant.
(d) The plaintiff's mark is different from that of the mark described in the
schedule to the plaint. The mark allegedly infringed is no longer in existence due
to the statutory warning that has to be placed on all tobacco products and the
suit schedule marks are also not being used by the plaintiff in the market and
hence, the suit cannot be maintained on the basis of the reliefs prayed for.
(xiv) It is important to note that Nico quality product partnership firm
stands dissolved on 06.11.2014 and K.C.Vijay had become the sole proprietor.
The defendant in the present case, is arrayed wrongly.
(xv) The defendant does not have any knowledge about the alleged
partnership with new partners and say that the same is illegal and not
maintainable. The defendant has no proper knowledge about the plaintiffs 2 and
3 and the plaintiffs 2 and 3 are not the authorised agents of the first plaintiff.
(xvi) It is denied that the 1st Plaintiff has got several registered trademark
in their name for marketing the snuff and cigar products. The plaintiff No.1, vide
assignment deed, dated 15.12.2011 assigned all their trademark in favour of
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C.S.(Comm.Div).Nos.605 and 882 of 2013
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K.C.Vijay and Z.Gnanakanabady trading as Nico Quality products and also agreed
not to use any identical or similar trademarks. The alleged two marks mentioned
by the plaintiffs, are identical with the registered mark of the defendant. Thus,
neither the plaintiff, nor any other party, can claim any rights for NC SNUFF or
NC trademarks. The plaintiffs are not using the alleged mark for the last 15
years. The plaintiff is not the sole and absolute owner of the plaint scheduled
trademarks. The filing of application per-se does not confer any rights on the
plaintiff
(xvii) It is denied that the plaint schedule mentioned trademarks and logos
in the form of laminated pouches are ordered and used for branding and
marketing snuff and cigar products for more than 10 years through plaintiff 2 &
3. The defendant denies the bills filed by the plaintiff as true and the same not
constitute any legal use. Even otherwise, the alleged use after the assignment by
the plaintiff is irrelevant.
(xviii) It is true that K.C.Vijay, the present defendant, with
Gnanakanabady purchased the trademark from the plaintiff by way of an
assignment deed dated 15.12.2011. Mrs.Anuradha, partner of the plaintiff-firm
signed the assignment deed and received the considering with the knowledge of
the other partners. Now, the present plaintiff suit, knowingly assigning the
marlos cannot now plead ignorance in any case the plaintiff and the defendants
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C.S.(Comm.Div).Nos.605 and 882 of 2013
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are contesting the case before this Court in CS 605 of 2013 and 852 of 2013 in
which the validity of the assignment deed will be decided, till auch time the
present plaintiff cannot claim any right over the mark and cannot assert invalidity
of the assignment deed. That apart there exists no case for the plaintiff to file
the present case with no cause of action when the some issuers are pending
adjudication in the earlier suits. Thus the present suit is liable to be dismissed.
(xix) The assignment deed entered by the plaintiff with the defendant is
true and valid in the eyes of law. The covenants mentioned in page 3 of the
assignment deed itself destroys the plaintiff case which talks about the restriction
on the plaintiff not to use any mark identical or similar to the assigned marks
irrespective of whether the marks are registered or not. Therefore it make no
sense to plead that they are eligible to use an unregistered mark and have right
to stops third parties including the present defendant. It is denied that the
assignment deed is restricted to registered marks and without goodwill. Even
otherwise at the time of entering into the assignment deed, the alleged
trademark applications were not even filed. If the theory of the plaintiff is to be
accepted means, any person can assign a mark and then file fresh application in
their own name to claim rights again which is not acceptable and the same
amounts to unfair trade practice. It is submitted that the marks are assigned with
ALL BENEFITS as mentioned in the assignment deed and the benefits of the
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mark is nothing but the reputation and the goodwill.
(xx) It is denied that the defendant herein is using the impugned
trademarks for packaging of its snuff products and marketing of the same
without obtaining either permission or assignment from the plaintiff. It is
submitted that the defendant had already the registered proprietor of
trademarke mentioned in the assignment deed. After the assignment deed the
plaintiff got no right to file trademark application or any new right to use the
mark. Since there is already a bar on the plaintiff to use the mark by virtue of the
covenants in the assignment deed, the false claims of the plaintiff are untenable
Therefore there is no restrictions or any impediment on the defendant to use any
form of NC SNUFF trademarks Apart from this the present impugned trademark
is already covered under the assignment bearing registration No.559308 in Class
34. Hence, use of the mark "NC SNUFF" in any design by the defendant is legal
and the present plaintiff got no right to stop the defendant from using it. Thus,
there is no cause of action for filing the suit and the same is liable to be
dismissed.
(xxi) It is denied that the schedule mentioned mark exclusively belongs to
the plaintiff and say that there exists no enforceable rights in favour of the
plaintiff against the defendant. It is denied that plaintiff suffered any damages
and loss in the business whereas restraining the defendants from legally using
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the mark will put the defendants to irreparable damages and the same will be
against natural justice.
(xxii) There is no cause of action to file the present suit and the suit is
completely misconceived. The Plaintiff conveniently suppressed various material
facts before this Court to take undue advantage. Defendants reserve their rights
to take appropriate action against pending trademark applications before the
trademark office.
(xxiii) There is no cause of action for the plaintiff to file the present suit.
The present suit is nothing but a tactics to extort money from the defendant
based on no right. The claims of the plaintiffs are duly covered in the earlier suit
in C.S.No.882 of 2013 and thus the present suit is barred.
(xxiv) The Plaintiff is not entitled to any of the reliefs sought for and the
entire suit is liable to be dismissed, for the reasons set out in the written
statement. The present proceedings are fit to be dismissed and does not merit
any kind of orders in circumstances and facts explained hereinabove.
(xxv) The plaintiff is not entitled to any relief as claimed in their suit.
There is no balance of convenience or prima facie case for the plaintiff to file the
present suit. There is no violation of the rights conferred on the plaintiff. Hence,
the defendant prayed to dismiss the present suit.
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C.S.(Comm.Div).Nos.605 and 882 of 2013
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8. Considering the pleadings and documents annexed with therein:
(a) This Court, on 04.09.2019, framed the following issues for
consideration in C.S.Nos.605 and 882 of 2013:
(i) Whether the letter of Authorisation dated 09.12.2011 executed in
favour of Anuradha is genuine or forged ?
(ii) Whether the deed of Assignment dated 15.12.2011 is genuine, forged
or concocted ?
(iii) Whether the first defendant in C.S.No.882 of 2013 use of the assigned
trademarks, amounts to infringement and passing off ?
(iv) Whether the Trademarks mentioned in the assignment deed are with
or without goodwill associated with the mark ?
(v) Whether the plaintiff is entitled for the relief claimed in the suits ? and
(vi) To what relief ?
(b) This Court, on 03.08.2021 in C.S.No.587 of 2015, framed the following
issues for consideration:
(A) Whether the plaintiffs are entitled to maintain a joint suit for passing
off ?
(B) Whether the defendant attempted to pass off its products as that of
the plaintiffs' by adopting the deceptively similar trademark ?
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(C) Whether the pendency of the suits in C.S.Nos.605 of 2013 and 882 of
2013 in which the assignment said to have been executed by the plaintiffs in
favour of the defendant is being questioned, would operate as a bar for the
plaintiffs prosecuting this suit ?
(D) Whether the plaintiffs are entitled to the injunction as prayed for ? and
(E) To what other relief are the parties entitled to ?
9. Based on the pleadings and issues, joint trial was ordered and evidence
was recorded in C.S.No.605 of 2013.
10. On the side of plaintiff, P.W.1 Mr.K.C. Vijay, P.W.2 Mrs.V.Anuradha
and P.W.3 Mr.Z.Gnanakanabady were examined and Exs.P-1 to P-31 were
marked. On the side of defendants, D.W.1 Mr.K.R.Ragurram Krishnadoss and
D.W.2 - Mrs.S.Thara, were examined and Exs.D-1 to D-13 were marked.
11. Learned Senior Counsel appearing for the plaintiff in C.S.No.605 of
2013 and also for defendants in C.S.Nos.882 of 2013 and 587 of 2015,
contended as follows:
(i) The suit schedule trade marks were assigned to the plaintiff,
S.Chandrasekaran, S.Thara and V.Anuradha, who were the partners of the first
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defendant-firm. During the pendency of the suits, Mr.S.Chandrasekaran passed
away and Mr.Raghuram Krishnadoss is later included as a partner. C.S.No.882 of
2013 and C.S.No.587 of 2015 are filed through Mr.Raghuram as the first
defendant's Power of Attorney. The plaint in these suits had not been signed
either by Mrs.Thara or Mr.Chandrasekaran. The first defendant's Bank Accounts
were frozen and that they had pleaded with the plaintiff to pay the consideration
of Rs.75 lakhs for assignment of the suit schedule marks in cash. It is not in
dispute that the first defendant was having financial problems and that
Mr.K.C.Vijay was helping them to settle their loans. D.W.2 Mrs.Thara had also
admitted the same during cross-examination in question Nos.28 and 29. It is also
admitted that the first defendant's sales tax registration was cancelled, as stated
in question No.32 by D.W.2. The sum of Rs.45 lakhs was generated by
Mr.K.C.Vijay and Rs.30,00,000/- by Mr.Z.Gnanakanabady. The sum was also
disclosed in the plaintiff's Books of Accounts and both Mr.K.C.Vijay and
Z.Gnanakanabady can individually show the source of these funds. S.Thara and
S.Chandrasekaran, vide letter dated 20.12.2011 had personally congratulated the
plaintiff for acquiring the suit schedule marks and further acknowledged the
receipt of the sum of Rs.75 lakhs as consideration. The letter is marked as
Ex.P.4. The partner of the first defendant, Mrs.S.Thara, upon seeing the original
copy of Ex.P.4 has also admitted to her signatures in the said document. Further,
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Mrs.Anuradha had also filed an affidavit before this Court (Ex.P-16) stating that
she was authorised by the partners of the first defendant, namely S.Thara and
Chandrasekaran to deal with the suit schedule marks and the plaintiff had paid
the consideration for the suit schedule trade marks. The remaining partners, with
an intention to defeat the rights of the plaintiff, have forced Mrs.Anuradha, who
is Mrs.Thara's daughter and Mr.Chandrasekaran's niece to resign from the firm
and had her executed an affidavit, dated 10.08.2012, wherein her intention to
resign from the first defendant-firm is recorded (Ex.D-8). The intention of the
first defendant's partners is manifest in Ex.D-8 for the reason that: (i)
Mrs.Anuradha relinquishes her right only over the suit schedule trade marks with
effect from 30.06.2012, (ii) Mrs.Thara in her proof affidavit in paragraph 6 and in
cross examination in question Nos.5, 6 and 7 admitted that Mrs.V.Anuradha had
control over the entire business and (iii) later, Mrs.Thara changes her version
and mentioned that V.Anuradha was in-charge of only the Snuff business, which
is evident from Question No.4. The contrary stand taken by D.W.2 clearly
establishes that their contention that they did not receive any consideration for
the assignment of the trade marks and that V.Anuradha was not authorised to
enter into the deed of assignment in favour of Mr.K.C.Vijay is only an after-
thought. Hence, the plaintiff has clearly established that the consideration of
Rs.75 lakhs was paid by the plaintiff and received and acknowledged by the first
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defendant.
(ii) The assignment deed is a valid contract binding on the defendants.
The plaintiff had established that the consideration for the assignment of the
trade marks for a sum of Rs.75 lakhs was duly received and acknowledged by
the defendant's partners. At the relevant point of time, Mrs.V.Anuradha was the
partner in-charge of the day-to-day affairs of the first defendant-firm.
Mrs.V.Anuradha was authorised by Mr.S.Chandrasekaran and Mrs.S.Thara, vide
authorisation dated 27.10.2011 to enter into assignment deed with the
prospective persons on behalf of the first defendant-firm. Thus, the deed of
assignment was entered into by Mrs.V.Anuradha representing the first defendant
and the plaintiff. The contention of the first defendant is that both the
authorisation letter dated 27.10.2011 and the assignment deed, dated
20.12.2011 are all fabricated and forged documents. This contention is only an
after-thought created for the purpose of defeating the rights of the plaintiff. No
evidence is let in support of the above contention and in cross-examination,
D.W.2, namely Mrs.S.Thara had also admitted her signature. Hence, the
contention of the defendants in the above context, stood vitiated.
(iii) The assignment deed clearly states that the plaintiff had acquired "all
benefits" of the suit schedule trade marks which certainly includes the goodwill
associated with the said marks. The first defendant's partner had requested the
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plaintiff to give them some time to clear their existing stock in trade before
applying to the Registrar of Trade Marks with regard to the change of ownership.
The first defendant's factories which contained the original trade mark
certificates were sealed and they could not access the same. Since as per the
Trade Marks Act, if a mark is assigned with goodwill, no time limit is specified for
changing the name of the owner in the records of the Trade Mark Registry and
given the difficulties faced by the first defendant, the plaintiff agreed to wait
before applying for change of ownership in the records of the trade mark
Registry over the said marks. The plaintiff applied in Form TM-24 under Section
45 of the Trade Marks Act and Rule 68 of the Trade Marks Rules, dated
19.08.2013 for change in the name as the subsequent Proprietor of the
impugned trade mark.
(iv) The deficit stamp duty was also paid at the time of execution of the
assignment, which has also been rectified by paying Rs.6 lakhs as penalty on
09.01.2014. It is therefore clearly established that the assignment in favour of
the plaintiff is valid contract and the binding on the defendants.
(v) The defendant has failed to establish their case that the deed of
assignment is vitiated on account of forged and fabricated documents. The
reasons stated above establish that the plaintiff has proved that considerationi
was paid for the assigned trade marks and the deed of assignment is a valid
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contract binding on the defendants.
(vi) The plaintiff has not disputed that they are dealing with the suit
schedule marks, rather it is their case that they are the owners of the suit
schedule marks. The only defence taken by the defendants against the plaintiff's
case of infringement and passing-off is that the authorisation letter, dated
27.10.2011 (Ex.P-2) and letters acknowledging assignment in favour of the
plaintiff (Ex.P-4) are forged documents. Therefore, the onus is only on the
defendant to prove their allegation of forgery.
(vii) The only witness with personal knowledge who deposed on behalf of
the first defendant is S.Thara, who had admitted her signature in Ex.P.4. There
is no documentary evidence in support of the defendant's contention that Exs.P-
2 and P.4 are forged and fabricated which had been let in. The defendant had
therefore failed to prove their case that the authorisation allowing
Mrs.V.Anuradha to assign the suit schedule marks and their letters
acknowledging the consideration paid by the plaintiff, are forged documents.
(viii) The plaintiff has proved that the first defendant is infringing and
passing-off the plaintiff's suit schedule marks. The plaintiff had acquired the
trade marks after paying lawful consideration to the first defendant.
(ix) It is not disputed by the first defendant that the suit schedule marks
are being sold by them. The first defendant has instead chosen to dispute the
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validity itself of the assignment deed and the defendant's contention had not
been proved. The deed of assignment prohibits the defendant from dealing with
the suit schedule marks and in doing so, the defendants have breached the
terms of the assignment deed and ergo are infringing and passing-off of the
plaintiff's valid trade mark.
(x) Subsequent to the filing of the present suit by the plaintiff, the plaintiff
had also obtained registration from the Trade Mark Registry in respect of the
marks in question under Registration Nos.2864217, 2864219, 2864227 in Class
34 for Snuff, Tobacco, Smoker's articles, matches included the same without any
objection or any opposition from the defendants. The same had also been
marked as Exs.P-18, P-19 and P-22. The said Trade Mark Registration in respect
of similar snuff products bearing similar logo NC had not been challenged by the
defendant. The same are therefore valid trade marks owned by the plaintiff. The
same lends further support to the plaintiff's case that they are the lawful owners
of the suit schedule marks. By virtue of tremendous efforts, time and money
spent by the plaintiff for the last several years, the subject mark is exclusively
associated with the plaintiff only and the general public associate the same only
with the plaintiff and no one else.
(xi) The plaintiff has clearly established that the defendant had infringed
the plaintiff's trade marks as per Section 29 of the Trade Marks Act, as there is a
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statutory presumption that identical goods with identical mark creates confusion
and the plaintiff's suit may be decreed.
11. Learned counsel for the defendants in C.S.No.605 of 2013 and the
plaintiffs in C.S.No.882 of 2013 and 587 of 2015, contended as follows:
(a) The validity and legality of the authorisation letter, dated 27.10.2011
and the validity and legality of the deed of assignment, dated 15.12.2011, is the
fulcrum to decide the fate of all these three suits. If the authorisation letter and
assignment deed were held to be fabricated, illegal and invalid, then the suit filed
by M/s.Nico Quality Products in C.S.No.605 of 2013 may be dismissed and the
suits filed by M/s.N.C.Arya and Cigar Company in C.S.Nos.882 of 2013 and 587
of 2015, may be decreed as prayed for.
(b) The contention put forth by the plaintiff is that the said Anuradha, who
was examined as P.W.2, representing as the Managing Partner of M/s.N.C.Arya
and Cigar Company, vide authorisation letter dated 27.10.2011, marked as
Ex.P-2 executed a deed of assignment to and in favour of M/s.Nico Quality
Products on 15.12.2011 for cash consideration of Rs.75 lakhs. The further
contention of the plaintiff is that though the agreement was executed on
15.12.2011, it was mutually agreed between the parties that M/s.N.C.Arya and
Cigar Company shall be allowed to market and supply the snuff and cigar stuffs,
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which were already manufactured within 12 to 18 months from the date of
execution of the assignment. The plaintiff assigns the same as the reason for not
presenting the assignment deed for registration until 19.08.2013, i.e. few days
before filing of the suits and also the reason for the delay in filing the suit. The
alleged authorisation letter and the assignment deed marked as Exs.P-2 and P-3
are denied and disputed by the first defendant in C.S.No.605 of 2013 and the
burden of proving the assignment is on the plaintiff in C.S.No.605 of 2013.
(c) On a bare reading of Ex.P-2, it clearly shows that the authorisation
letter was manufactured by the plaintiff with the help of Anuradha and her
husband Gnanaganapathy, who was the partner of the plaintiff-firm and this is
suppressed at the time of filing of the suit. It is admitted by the plaintiff,
Anuradha and Gnanaganapathy who were examined as P.Ws.2 and 3, that the
said Anuradha and Gnanaganapathy had executed separate affidavits, i.e. Ex.D-
8 and Ex.D-12, dated 10.08.2012. The said Anuradha, who was the partner in
the first defendant-firm, retired from the firm and relinquished all her rights over
the trade-marks by virtue of the said affidavit. Though the said Gnanaganapathy
is not a partner, the husband of the said Anuradha had also executed an affidavit
by virtue of Ex.D-12, relinquishing all his rights with respect to the first
defendant-firm and the trade-marks. Therefore, even before the date of
institution of the filing of the suit, the said Anuradha had executed an affidavit
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and relinquished all her rights, share and interest over the affairs of the firm and
the suit trade-marks and other trade-marks belonging to the first defendant-firm.
P.W.2 Anuradha and P.W.3 Gnanaganapathy had admitted the execution of
Exs.D-8 and D-12. Both of them had failed to give any genuine and acceptable
reason or justification for not including the alleged authorisation letter or
assignment deed, mentioned in C.S.No.605 of 2013 in their affidavit(s). The
admission and execution of Exs.D-8 and D-12 clearly prove and establishes that
the authorisation letter as well as the assignment deed, were an after-thought
and concocted by collusive minds of the plaintiff firm's Proprietor K.C.Vijay,
along with his partner Gnanaganapathy and his wife Anuradha, who were
respectively examined as P.Ws.1 to 3. A bare reading of the authorisation letter
clearly shows that the signatures are not found any way near the contents of the
authorisation letter, dated 27.10.2011. There is nearly a half-foot gap between
the contents of the letter and the alleged signatures of the other two partners of
the first defendant-firm, namely Thara and Chandrasekaran. There is no
explanation given by the plaintiff or even Anuradha or even Gnanaganapathy
during the course of chief examination or cross-examination, for which, wide gap
exists between the contents of the letter and the signatures which were obtained
in the bottom.
(d) The plaintiff's averment in the plaint with regard to the alleged deed of
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assignment that Rs.75 lakhs had been paid to the first defendant-firm, no reason
was given for payment of such huge amount in cash and that too, without any
independent witness. The plaintiff relied upon the affidavit marked as Ex.P-16
executed by Anuradha, wherein she had admitted the receipt of Rs.75,00,000/-
being the consideration paid by the plaintiff to the first defendant-firm. The
affidavit was executed after filing of the written statement and the suit in
C.S.No.882 of 2013, disputing the payment and validity of the assignment deed.
Thus, the relationship of the plaintiff with Anuradha and Gananganapathy itself is
the ground for suspecting the alleged payment. The fact that Anuradha and
Gnanaganapathy aligned with the plaintiff and were also examined as P.W.2 and
P.W.3 clearly rises doubt with respect to the alleged payment of Rs.75 lakhs in
cash as consideration for the alleged assignment deed, dated 15.12.2011.
(e) Further, during the course of chief examination, P.W.1 (plaintiff), in his
cross-examination for Question No.42 answered that he had source of funds for
Rs.45 lakhs which he had given for his share as a part of the total consideration
of Rs.75 lakhs. However, the alleged source of account was never produced by
the plaintiff and as such, adverse inference had to be drawn against the plaintiff
under Section 114 of the Indian Evidence Act. The alleged payment of Rs.75
lakhs was not also shown in the Income Tax Returns of the plaintiff-firm in
C.S.No.605 of 2013. The plaintiff failed to produce the Income Tax Returns for
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the alleged payment of Rs.75 lakhs. The alleged payment was also not reflected
in the Income Tax Returns of either partners, namely K.C.Vijay or
Gnanaganapathy, examined as P.W.3 and both of them also failed to file the
Income Tax Returns reflecting the alleged payment of Rs.30 lakhs and Rs.45
lakhs in cash.
(f) The plaintiff/firm attempted to improve their case during cross-
examination for the first time stated that one Chandrasekaran along with
Anuradha, and had given the authorisation letter to P.W.1 - K.C.Vijay in Question
No.56. As regards Question No.64, P.W.1 answered that Chandrasekaran did not
sign the deed, since he had executed the authorisation letter in favour of
Anuradha. But the presence of Chandrasekaran was not mentioned in the plaint
during the alleged execution of either the authorisation letter or the alleged deed
of assignment and at the time of tendering evidence, P.Ws.1 to 3, the said
Chandrasekaran died and it was hence convenient for P.W.1 to drag the name of
the deceased person to give semblance of authenticity and legality to the
documents, which had been otherwise fabricated and created by the fraudulent
collusive mind of P.Ws.1 to 3. It could not be believed that when one of the
parter Chandrasekaran, who is alleged to have handed over the authorisation
letter to P.W.1 and was also available on the alleged date of execution of deed of
assignment and did not sign the same.
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(g) Contradicting the statement of P.W.1 for execution of assignment deed
by Anuradha, instead of Chandrasekaran, P.W.2 Anuradha stated that the said
Chandrasekaran had not signed the assignment in fear of money-lenders and he
could not step out of the house in Question No.50. Contradicting the very
statement, P.W.2 herself stated that her paternal uncle Chandrasekaran only
drafted the assignment and brought it to her for Question No.49. As per the
version of P.W.1, the assignment deed marked as Ex.P-14 had been drafted by
Advocate(s), and the said Advocate's name was also not properly remembered
by P.W.1.
(h) Apparently, any assignment deed is liable to be registered within a
period of six months from the date of its execution, except the assignment of
trade-mark along with good-will under Section 45 of the Indian Trade-marks Act,
of 1999. Admittedly, in the present case, the assignment was not presented for
registration within the period of six months. On a bare reading of the assignment
deed also, it reflects that the goodwill is not transferred along with the
assignment of the alleged trade-marks. In order to obviate the above legal
entitlement, the plaintiff invented unilateral stipulation to the effect that the
assignment deed had to be kept in moribund condition for the period of 12 to 18
months in order to give time for the first defendant-firm to clear all the
manufactured products. According to the plaintiff, the defendant-firm is in deep
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debts towards the Banks, financiers and also with the clients and customers. It
could not be believed that such a firm in deep financial trouble, had such huge
stock to sell the manufactured items for nearly about 12 to 18 months, as
mentioned in the plaint.
(i) The plaintiff is blowing hot and cold, because, at one point, the plaintiff
alleged that the defendant(s) is in deep financial trouble and on the other hand,
it is claimed that the plaintiff allowed a grace period of 12 to 18 months for the
manufactured products of the defendants, even after paying the alleged
consideration of Rs.75 lakhs in cash. The grace period of 12 to 18 months was
invented by the plaintiff to suppress the fact that the alleged authorisation letter
marked as Ex.P-2 and the alleged assignment deed, marked as Ex.P-14 itself,
were ante-dated and they are subsequent to the execution of the affidavits
marked as Exs.D-8 and D-12 and admitted by P.W.2 and P.W.3 in their cross-
examination.
(j) Further, admittedly, Exs.P-2 and P-14 were created subsequent to
Exs.D-8 and D-12 and if Exs.P-2 and 14 and Exs.D-8 and 12, are read in
conjunction with the averments made in the pleadings and deposition of P.Ws.1
to 3, it is clear that there is fraudulent nexus between all the three of them to
ante-date the authorisation letter and the alleged assignment deed and
fabricating the same in collusion among themselves. At the time of execution of
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Exs.D-8 and D-12, the said Anuradha being the person who is alleged to have
been authorised to execute the assignment deed, had not stated anything about
the execution of the alleged authorisation letter or the assignment deed. The
said Gnanaganapathy, who is the partner of the plaintiff-firm and beneficiary
under the assignment deed, also did not speak about the alleged execution of
the authorisation letter and the alleged assignment.
(k) The plaintiff had also not mentioned anything in the pleadings about
the execution of the affidavit marked as Exs.D-8 and D-12 respectively by D.W.2
and D.W.2, relinquishing the rights and claim with respect to the affairs of the
first defendant-firm, including the trade-mark. It is for the first time when
confronted in the cross-examination of P.W.1, he answered Question No.51 that
he came to know about the retirement of Anuradha and Gnanaganapathy before
filing of the suit in C.S.No.605 of 2013. Though he had the knowledge that the
said Anuradha had resigned from the firm on the date of institution of the suit(s),
he did not come forward to explain the alleged affidavit, in the capacity of
execution of the authorisation letter and deed of assignment. Further, originally,
the assignment deed was not even sufficiently stamped. The plaintiff in
C.S.No.605 of 2013, had obtained ex-parte interim order and the same was
sought to be vacated and Ms.NC.Arya had also filed the suit in C.S.No.882 of
2013, challenging the assignment deed and sought for interim injunction, and
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the interim injunction granted in favour of the plaintiff, was vacated and the said
interim injunction was vacated and the interim injunction was granted in favour
of NC Arya. Only thereafter, the plaintiff paid the stamp duty. The delayed
payment of stamp duty is also one of the valid reason to disbelieve the case of
the plaintiff and to hold that the assignment deed is ante-dated and created by
the plaintiff for the purpose of the suit.
(l) The defendants stated that the conduct of the parties creates serious
doubt. When P.W.1 was confronted as to whether he knows the address of
Anuradha and Gnanaganapathy, he said "no". When he was asked as to how did
he cite Anuradha and Gnanaganapathy as the witnesses, he replied that he does
not know the address and his Advocate informed the address of P.Ws.2 and 3.
P.W.2 Anuradha informed the Court that P.W.1 K.C.Vijay had not consulted her
husband Gnanaganapathy, who was the partner of the plaintiff-firm at the time
of institution of the suit. P.W.2 further stated that the factum about her
retirement was never informed by her to P.W.1 contravening the version of
P.W.1.
(m) All the aforesaid egregious contradictions and discrepancies, clearly
shows that the plaintiff and his witnesses had gone to the extent of lying and
contradicting each other for the purpose of the case.
(n) For Question No.41, P.W.2 answered that she did not know as to who
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C.S.(Comm.Div).Nos.605 and 882 of 2013
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dictated the contents of Ex.P-2. Quite strangely, she is the one who claimed
authorisation under Ex.P-2 and it is totally unbelievable that she did not know
the person dictating the content(s) of Ex.P-2. P.Ws.1 to 3's evidence is not clear
with respect to the person who had drafted the alleged authorisation letter and
the assignment deed that they were all not sure about the date of execution
also. Crowning all these facts, the plaintiff had not been able to produce any
satisfactory evidence before the Court in proof of the payment of the alleged
amount of Rs.75 lakhs, except the self-serving affidavit executed by Anuradha,
who in fact, along with her husband, sided with K.C.Vijay.
(o) Thus, the fraudulent scheme to hijack the trade-mark belonging to the
first defendant-firm, was manipulated and formulated by the plaintiff-K.C.Vijay in
collusion with P.W.2 Anuradha and P.W.3 Gnanaganapathy. It is admitted by the
plaintiff in his cross-examination that, earlier, a concern was run under the name
"Nico" by Gnanaganapathy. Later, the said Gnanaganapathy, by virtue of Exs.D-8
and D-12, both the said Anuradha and Gnanaganapathy retired from the firm.
After being thrown out of the firm and business, both the husband and wife,
Anuradha and Gnanaganapathy achieved conspiracy and floated a partnership
firm by using the very same name "Nico", being used by Gnanaganapathy and
creating the authorisation letter and assignment deed and instituted the suit in
C.S.No.605 of 2013, containing false averments. Admittedly, the plaintiff had no
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C.S.(Comm.Div).Nos.605 and 882 of 2013
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answer with respect to the proof regarding the payment of the huge
consideration of Rs.75 lakhs in cash. The testimony of P.W.2 supporting the case
of P.W.1, could not improve the case of the plaintiff, since the said Anuradha is
not at all a partner of the first defendant-firm at the time of execution of the
alleged receipt. Hence, for the reasons stated above, according to the
defendants, the aforesaid authorisation letter and the assignment deed, dated
15.12.2011, may be declared as illegal and non-est in the eye of law.
12. Since a joint trial was conducted, the plaintiff in C.S.No.605 of 2013,
for ease of reference, will hereinafter be referred to as the "plaintiff" and the
plaintiffs in C.S.No.882 of 2013 and 587 of 2015 will be referred to as the
"defendants".
13. The specific case of the plaintiff(s) in C.S.No.605 of 2013, is that the
suit schedule trade-marks originally belonged to the first defendant-partnership
firm. The first defendant assigned the trade-marks to the plaintiff for valuable
consideration of Rs.75 lakhs. Letter of acknowledgement was sent by the
defendants to the plaintiff and also the deed of assignment was also executed by
one of the partners of the partnership-firm to the plaintiff. Thereafter, the trade-
mark was registered in the name of the plaintiff(s) and the plaintiff also obtained
registration from the trade-marks Registry in respect of the disputed trade-
marks. Subsequently, even after assignment of the trade-marks, the defendants
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C.S.(Comm.Div).Nos.605 and 882 of 2013
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used the trade-marks and infringed and also passing-off. Therefore, the plaintiff
had filed the present suit in C.S.No.605 of 2013.
14. The case of the defendant(s) is that one of the partners Anuradha,
was not authorised to execute the assignment deed in favour of the plaintiff. The
plaintiff never paid consideration and the defendants have not received
consideration. The authorisation letter and assignment deed and the
acknowledgement letters were forged. The defendants continued to use the said
trademarks and the plaintiff is not entitled to claim the relief as sought for in the
plaint. Since the plaintiff forged and fabricated the documents Exs.P.2 and P.4,
based on the forged documents, the plaintiff obtained registration from the
trade-mark Registry in respect of the trademarks in question and the Registration
Number is 2864217, 2826219 and 2864227. They have obtained only for Snuff
alone and the signatures found in the authorisation letter, dated 27.10.2011 was
not that of the said Chandrasekaran and which was created only for the purpose
of the suit in order to cheat the defendant(s). The alleged payment was also not
reflected in the Income Tax Returns of the either of the partners. Therefore, the
plaintiff(s) is/are not entitled to use the disputed trade-marks, and therefore,
the defendant(s) soon after coming to know about the using of the trade-mark
by the plaintiff(s) and had filed the present suit for declaration that Exs.P-2 and
P-4 are null and void and not binding on the defendant(s) and also for
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C.S.(Comm.Div).Nos.605 and 882 of 2013
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infringement and passing-off and permanent injunction.
15. Issue No.(i) in C.S.Nos.605 and 882 of 2013: Whether the letter of
autahorisation, dated 09.12.2011 executed in favour of Anuradha is genuine or
forged ?
The specific case of the plaintiff is that the first defendant is the registered
partnership-firm and during the pendency of the suit, the said Chandrasekaran
passed away and Raghuraman was later included as one of the partners. During
the pendency of the suit in C.S.No.605 of 2013, the C.S.No.882 of 2013 and 587
of 2015 were filed through M/s.Raghuraman as Power Agent of the first
defendant. Since the Bank accounts of the first defendant-firm were frozen and
they had made a request with the plaintiff to pay Rs.75 lakhs for assignment of
the suit schedule marks in cash and in order to overcome the financial problems,
the plaintiff was helping them to settle their loan. The partners of the defendant
authorised Anuradha who was the Managing Partner to execute the deed of
assignment in favour of the plaintiff and also they have sent a letter of
acknowledgement. The authorisation letter, i.e. 27.10.2011 was marked as Ex.P-
2. Based on the authorisation, Anuradha also executed the deed of assignment
in favour of the plaintiff and the same was marked as Ex.P-4. In order to prove
the case of the plaintiff, the partners of the plaintiff-firm, one K.C.Vijay was
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C.S.(Comm.Div).Nos.605 and 882 of 2013
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examined as P.W.1 and the said Anuradha was examined as P.W.2. Both of them
have spoken about the payment of the consideration to the partners of the
defendant-firm and after receiving them, they have executed the deed of
assignment. Though the defendants have challenged the deed of authorisation
letter, dated 09.12.2011 as forged and concocted for the purpose of filing this
suit and they have never issued the consideration, however, the defendants have
not filed any complaint against the plaintiff and even they have not obtained any
steps to send the documents for Forensic Department to find out the signature
of the partners, especially the signature of the Chandraseakaran. However, one
of the partners and signatory, namely Thara was examined as D.W.2. and she
had admitted the signatures of her in the said document.
16. From a reading of the oral and documentary evidence, they have
denied only the signature of the said Chandrasekaran, but however, they have
not established that the signature of Chandrasekaran was forged. Further
reading of the evidence of P.Ws.1 to 3 and also the admission of P.W.2 shows
that though D.W.1 is only the Power Agent of the first defendant-firm/concern
was examined, but he was not having any personal knowledge about the
execution of the documents. Further, the plaintiff also gave complaint before the
Police against the defendant(s) and also sent legal notice to show that the
defendant(s) did not send any reply and also regarding the forgery and the
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C.S.(Comm.Div).Nos.605 and 882 of 2013
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defendants have not filed any complaint before the Police and he has not taken
any action. The defendants have filed the suit for declaration regarding the
documents as null and void and not binding on them and only after filing of the
suit by the plaintiff, the plaintiff sent legal notice, for which the defendant(s)
had not sent any reply. D.W.2 had also admitted that P.W.2 was the Managing
Partner during the relevant point of time and she was doing day-to-day affairs of
the defendant-firm, though the defendants have stated that P.W.2 retired from
the partnership firm, but on a reading and perusal of the oral and documentary
evidence, it is seen that at the time of execution of Exs.P-1 to P-5, P.W.2 was the
Managing Partner and D.W.2 also admitted that she was doing day-to-day affairs
of the Company and she was authorised to participate in the day-to-day affairs of
the Company.
17. Therefore, on a reading of the pleadings and oral and documentary
evidence, this Court finds that the letter of authorisation, dated 09.12.2011 is
genuine. When once the signature is admitted and execution, the plaintiff has
proved the initial burden and the onus is shifted on the defendants and hence, it
is for the defendants to rebut the presumption. The defendants have not
rebutted the presumption and therefore, this Court finds that the document is
genuine. Thus, the first issue framed in C.S.Nos.605 and 882 of 2013, is
answered accordingly.
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C.S.(Comm.Div).Nos.605 and 882 of 2013
and 587 of 2015
18. Issue No.(ii) in C.S.Nos.605 and 882 of 2013: Whether the deed of
assignment dated 15.12.2011 is genuine, forged or concocted ?
The first defendant was the partnership firm and P.W.2 was the Managing
Partner and who was also looking after the day-to-day affairs and she was also
authorised to execute the deed of assignment, and based on that, P.W.2 also
executed the deed of assignment dated 15.12.2011 and subsequently, they have
also paid the deficit stamp duty. The registration of the firm/concern and the
document, are admitted. D.W.2 admitted that P.W.1 was also one of the
partners of the first defendant-firm and before retirement, she was authorised to
look after the day-to-day affairs of the partnership firm and the signature in
Ex.D-1 was also admitted. Though one of the contentions taken by the
defendants that there is a long gap from the contents and signature in Ex.P-2,
but when once the signature is admitted, it is for the defendants to explain. The
first defendant is only Power Agent and he is not competent witness to speak
about the personal knowledge of the parties to the document.
19. During the pendency of the suit, the said Chandrasekaran died and
only available witness is D.W.2 and D.W.2 had admitted the signature and also
the entrustment of the affairs of the partnership firm to Anuradha. The evidence
of D.W.2 shows that based on the authorisation, she executed the assignment
deed and also received the consideration of Rs.75 lakhs. Rs.40 lakhs was paid
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C.S.(Comm.Div).Nos.605 and 882 of 2013
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by D.W.1 and Rs.35 lakhs was paid by the husband of D.W.3 and therefore,
though the defendants have taken a stand that the Income Tax Returns had not
been filed and proved and when once the execution is admitted, the initial
burden is proved and the onus is shifted, then it is for the defendants to rebut
the same and shift the onus further to the plaintiff.
20. Issue No.(iii) in C.S.Nos.605 and 882 of 2013: Whether the first
defendant in C.S.No.882 of 2013 use of the assigned trade-marks, amounts to
infringement and passing off ?
As already held in the previous issues that both the authorisation letter
dated 09.12.2011 and the deed of assignment dated 15.12.2011 are genuine,
based on Ex.P.4, the plaintiff is entitled to use the disputed trade-mark. Further,
the plaintiff had stated that subsequent to the filing of the suit by the plaintiff,
the plaintiff had also obtained registration from the trade-mark Registry in
respect of the trade-marks in question in Class 34 of the Snuff was snuff,
tobacco, etc., including the same, without any objection or in opposition from the
defendants. The said trade-marks/cigar/snuff products were also marked as
exhibits in the suit. The said trade-marks registration in respect of the similar
snuff products bearing the similar trade-mark, was not challenged by the
defendants. The same are therefore valid trade-marks owned by the plaintiff.
The deed of assignment prohibits the defendants from dealing with the suit
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C.S.(Comm.Div).Nos.605 and 882 of 2013
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schedule mark(s) and in doing so, the defendants have breached the terms of
the assignment deed and also infringing and passing-off of the plaintiff's valid
trade-mark. Though the defendants have stated that Exs.P-2 and P.4 were
forged and fabricated documents, but there is no documentary evidence in
support of the contention of the defendants. Though the sufficient stamp duty
was not paid at the time of execution of the deed of assignment which has also
been subsequently ratified by paying penalty on 09.01.2014, which also clearly
establish that the assignment in favour of the plaintiff is valid and binding on the
defendants.
21. From the oral and documentary evidence and also the admission of
D.W.2, using of the assigned trade-marks by the defendants, are amounting to
infringement and passing-off. The issue No.(iii) is answered accordingly.
22. Issue No.(iv): Whether the Trade-marks mentioned in the assignment
deed are with or without goodwill associated with the mark:
As already held in Issue No.(ii) that the deed of assignment, dated
15.12.2011 is genuine and the same was also registered and deficiency in stamp
duty has also been paid pending the present suits and the plaintiff had also
obtained registration of the trade-marks and using the trade-marks and the
evidence of the plaintiff is also that while executing the assignment, the plaintiff
has also agreed that the defendant can use the same trade-mark till the disposal
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C.S.(Comm.Div).Nos.605 and 882 of 2013
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of the consignment, which already was manufactured by them and till supply of
that goods, they can use the trade-mark of the plaintiffs and thereafter, they
should stop it owned by the plaintiff and therefore, in the above circumstances,
mere non-mentioning of the goodwill in the assignment deed, will not falsify the
case of the plaintiff, when once the plaintiff has proved the assignment and also
subsequent to the registration of the trade-mark and using the trade-mark will
not give any significance in the documents regarding the goodwill and when
once the plaintiff has stated that the defendants suffered from financial problem
and the accounts of the Bank was also frozen and in order to get rid of the same,
they have approached the plaintiff and also received Rs.75 lakhs, which was also
acknowledged by the defendants and also they had executed the assignment
deed.
23. Further, D.W.2 also has not spoken anything about the good-will and
D.W.1 is not the competent person and he is only Power Agent and therefore, in
the above circumstances, non-mentioning of the good-will in the document, will
not create any right to the defendants, when once the Court held that Ex.P-4 is a
genuine document and acted upon. Issue No.(iv) is answered accordingly.
24. Issue No.(v): Whether the plaintiff is entitled for the relief claimed in
the suits ?
As already held in issue Nos.(i) to (iv) in favour of the plaintiff, the plaintiff
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C.S.(Comm.Div).Nos.605 and 882 of 2013
and 587 of 2015
is entitled to the relief sought for in the plaint.
25. The suit in C.S.No.605 of 2013 is decreed as prayed for. However,
considering the facts and circumstances of the case, there shall be no order as to
costs.
26. C.S.Nos.882 of 2013 and 587 of 2015: All the issues:
Considering the facts and circumstances, as discussed above, since issue
Nos.(i) to (iv) in C.S.No.605 of 2013 have elaborately been discussed and the
suit in C.S.No.605 of 2013 is decreed and rejected the claim of the defendants
and held that Exs.P-2 to P.4 were not forged and it will bind on the defendants.
As already answered in the earlier issues, this Court clearly held that Exs.P-2 to
P.4 are genuine and initial burden is proved and the onus had been shifted. The
defendants have not established their case. When once the deed of assignment
is held as genuine and the plaintiff had registered the trade-marks and using the
trade-marks, then, after assignment and after the period mentioned in the
document (manufacturing the products) and therefore, after the cut-off date, the
defendants are not entitled to use the disputed trade-marks. Therefore, by using
the trade-mark, the defendants had committed infringement and passing-off.
Further, pending the suit, the plaintiff gave a complaint after registering the
trade-mark and also ratified the assignment deed and the plaintiff has also sent
legal notice to the defendant and they have also given Police complaint and
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C.S.(Comm.Div).Nos.605 and 882 of 2013
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despite that, the defendant continued to use the trade-marks of the plaintiff, and
therefore, the defendants have infringed and passing-off in respect of the suit
trade-mark. As already held in the earlier suit in C.S.No.605 of 2013, the plaintiff
is entitled for decree as prayed for and the plaintiff is also entitled for decree of
infringement and passing-off. Therefore, all the issues are answered accordingly
in C.S.No.587 of 2015. Unless the defendant(s) is/are able to establish that
Exs.P-2 to P.4 are forged, they are not entitled to use the trade-mark and they
are also not entitled to file the suit for passing-off and infringement. Therefore,
the defendants are not entitled to file joint suit for passing off.
27. In the result, C.S.No.605 of 2013 is decreed as prayed for. The suit in
C.S.Nos.882 of 2013 and 587 of 2015 are dismissed. However, considering the
facts and circumstances of the case, the parties are directed to bear their own
costs in all these three suits.
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C.S.(Comm.Div).Nos.605 and 882 of 2013
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List of witnesses on the side of plaintiff:
P.W.1 Mr.K.C. Vijay
P.W.2 Mrs.V.Anuradha
P.W.3 Mr.Z.Gnanakanabady
List of documents filed on the side of plaintiff:
Exhibit Description
P-1 Reconstitution of the first defendant by inducting
Ms.Anuradha as a partner dated 18.06.1995
Authorisastion letter in favour of Mrs.Anuradha
P-2 to enter into deed of assignment on behalf of the
first defendant dated 27.10.2011
P-3 Deed of assignment in favour of the plaintiff,
dated 15.12.2011
P-4 Letters from the partners acknowledging the
assignment in favour of the plaintiff (two letters)
dated 20.12.2011
P-5 Letter of the Registrar of Trademark for
registration of the plaintiff as the subsequent
proprietors of the assigned trademarks dated
19.08.2013
P-6 Invoice No.009, raised in the name of the
plaintiff dated 20.08.2013
P-7 Registration of Partnership dated 21.08.2013
P-8 Invoice No.001, dated 21.08.2013
P-9 Invoice No.002, dated 23.08.2013
P-10 Invoice No.003, dated 23.08.2013
P-11 Invoice No.004, dated 26.08.2013
P-12 Logo, mark, packaging etc., of the plaintiff's
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C.S.(Comm.Div).Nos.605 and 882 of 2013
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Exhibit Description
products
P-13 Logo, mark, packaging etc., of the first
defendant's products
P-14 Stamped Deed of Assignment, duly stamped on
09.01.2014, dated 15.12.2011
P-15 Receipt for payment of stamp duty paid on Deed
of Assignment dated 09.01.2014
P-16 Declaration affidavit of V.Anuradha
P-17 Dispatch receipt of Vijayanth Trading, Kolkata
dated 11.01.2014
P-18 Certificate of Registration of Trade Mark
No.2864217 issued by Trademark Registry,
Government of India, dated 17.12.2014
P-19 Certificate of Registration of Trade Mark
No.2864219 issued by Trademark Registry,
Government of India
P-20 Letter from defendant to plaintiff along with
cheque dated 21.06.2012
P-21 Deed of dissolution of partnership dated
06.11.2014
P-22 Certificate of Registration of Trademark
No.2864227 dated 17.12.2014
P-23 Authorisation letter issued by the defendant in
favour of plaintiff dated 09.12.2011
P-24 Letter from Axis Bank to the defendant dated
14.12.2011
P-25 Receipt for payment made by plaintiff into
defendant account dated 15.05.2012
P-26 Form A submitted by the first respondent firm
before the Registrar of Firms, dated 23.09.2013
P-27 Extract from the Website of the Commercial
taxes Department, dated 28.09.2013
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C.S.(Comm.Div).Nos.605 and 882 of 2013
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Exhibit Description
P-28 Police complaint lodged by the plaintiff dated
05.03.2014
P-29 Police Complaint lodged by plaintiff, dated
20.05.2014
P-30 Original deed of dissolution of partnership and
reconstitution of the plaintiff as proprietorship
concern dated 06.11.2014
P-31 Registered Trade marks in the name of plaintiff
issued by Registrar of Trade Marks, Chennai
dated 20.09.2021
List of witnesses on the side of defendants:
D.W.1 - Mr.K.R.Ragurram Krishnadoss
D.W.2 - Mrs.S.Thara
List of documents marked on the side of defendants:
Exhibit Description of documents
D-1 Original Certificate of Trade Mark No.179074,
dated 27.03.1957
D-2 Original Certificate of Trade Mark No.194656
dated 23.02.1960
D-3 Original Certificate of Trade Mark No.454103
dated 14.05.1986
D-4 Original Certificate of Trade Mark No.454106,
dated 14.05.1986
D.5 Original Certificate of Trade Mark No.454109,
dated 14.05.1986
D.6 Original Certificate of Trade Mark No.559308,
dated 27.09.1991
D.7 Original Partnership agreement along with
Form-C dated 01.07.2012
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C.S.(Comm.Div).Nos.605 and 882 of 2013
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Exhibit Description of documents
D.8 Original Affidavit executed by Anuradha dated
10.08.2012
D.9 Original Affidavit executed by Zanakanabady
dated 10.08.2012
D.10 Original Legal Notice, dated 24.07.2013
D-11 Original Specific Power of Attorney dated
05.12.2013
D.12 Original Partnership Agreement dated
01.07.2014
D.13 Original Partnership Agreement, dated
18.06.1995
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C.S.(Comm.Div).Nos.605 and 882 of 2013
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P.VELMURUGAN, J
cs
Pre-delivery Common Judgment
in C.S.(Comm.Div).Nos.605 and
882 of 2013 and 587 of 2015
Judgment delivered on 24.01.2025
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