MOHAN LAL KHATRI Vs. KHATRI BIDI WORKS
LAWS(DLH)-1983-9-10
HIGH COURT OF DELHI
Decided on September 20,1983

MOHAN LAL KHATRI Appellant
VERSUS
KHATRI BIDI WORKS Respondents

JUDGEMENT

Sultan Singh - (1.)THE plaintiffs filed application (I.A. No. 2434/83) under Order 39 Rules 1 and 2 and section 51 of the Code of Civil Procedure for the grant of temporary injunction in a suit for permanent injunction restraining infringement of trade marks, passing off, rendition of accounts and damages. By order dated 25th May, 1983 defendants were restrained from dealing in Bidis under the trade mark PARI CHAP of any other mark identical or deceptively similar to the said trade mark or the label mark of the plaintiffs till further order. THE defendants filed application (I.A. No. 3521/83) for vacating the said ex-parte order dated 25th May 1983. THE defendants have also filed reply to the plaintiff's application for injunction along with documents in opposition to the plaintiff's application.
(2.)THE plaintiffs allege that their firm M/s. Mohan Lal Khatri is a partnership firm, they have been engaged in manufacture and merchandise of Bidis since 1966; they are proprietors and of trade mark 'PARI CHAP' under registration No. 138786, 158448 and 321356 in class 34; that originally the said registered trade marks are owned by Amarchand Atmaram and by a Deed of Assignment dated 16th March, 1982 Amarchand trading as Amarchand Atmaram, Beawar, Rajasthan assigned the said three trade marks along with the goodwill of the business for which the trade marks have been used to the plaintiffs; the said assignor and assignee of the trade mark made a joint request before the Registrar of Trade Marks to record plaintiffs as subsequent proprietors which is still pending; the trade mark PARI CHAP has been in continuous and regular use since 1949 by them and their predecessor and it has acquired reputation and the public recognise the goods bearing the trade mark PARI CHAP to be the exclusive merchandise of the plaintiffs and none else and it has been widely advertised and the sales are extensive; the defendant No. 1 Khatri Bidi Works recently started manufacturing and selling Bidis under the mark PARI CHAP in violation of the rights of the plaintiffs; the defendants not only adopted an identical trade mark but also a false trading style Amarchand Atmaram, to which they have no right; the trade mark PARI CHAP adopted by the defendants is identical phonetically, visually and structurally; Moolchand s/o Veerchand was partner of Amarchand in the firm Amarchand Atmaram from 1st November, 1957 to 30th September, 1966; a dissolution deed was executed between Amarchand and Moolchand on 1st October, 1966 whereunder all the assets and liabilities were taken over by Amarchand. It is also alleged that in July 1982 plaintiffs came to know about the use of the trade mark PARI CHAP on the part of the defendants. THE plaintiffs therefore, filed the present suit for permanent injunction along with the application for grant of temporary injunction.
The defendants submit that Mool Chand Khatri father of the partners of the two firms of the defendants was partner in the firm Amarchand Atmaram from 1st November, 1957 to 30th September, 1966; the partnership firm Amarchand Atma Ram was proprietor of the three trade marks; the registered trade marks 138786 and 158448 were registered in the joint names of Amarchand Atmaram and Moolchand Veerchand, and the trade mark 198814 was applied for registration on 2nd November, 1960 in the joint names of Amarchand Atmaram and Moolchand Veerchand in the trading style of Amarchand Atmaram Pari Chap Bidi Factory, Beawer and M/s. Moolchand Veerchand, Beawar (Rajasthan). The trade marks 198814 and 158448 were associated with the trade mark 138786. It is alleged that two trade marks 138786 and 158448 were renewed from time to time in the said joint names upto May 1985 and April 1981 respectively. The defendants further submit that this Court has no jurisdiction; plaintiffs are not owners of the trade marks; the alleged assignment is bad in law and cannot be enforced as Amar Chand alone had no exclusive right to transfer the trade marks, the plaintiffs have no cause of action without registration of the assignment; the suit is bad for non-joinder of registered proprietors of the trade mark; Moolchand Veerchand has been the joint proprietor of the trade mark along with Amarchand Atmaram; Mool Chand was father of the partners of the defendants, firm; trade marks are common to the trade; the suit and the application of the plaintiffs are liable to be dismissed on ground of delay and latches; defendant No. 1 has been using the trade marks and labels PARI CHAP since 1978; the defendant No. 2 has been using the trade marks since 1966; Mool Chand predecessor of the defendants had been continuously using the said trade mark PARI CHAP since 1955 till his death in May 1979 and thereafter his heirs have been using the same; the user of the mark by the defendants and their predecessor since October 1966 has been within the knowledge of the plaintiffs; the parties are closely related and are residents of the same small town of Beawar and have manufacturing units and residences close to each other within a distance of 250 yards; the products of defendant No. 2 from 1966 upto 1977 were sold through M/s. Ishwardas Mohanlal & Co. of Beawar in the open market and have been using the marks to the knowledge of the plaintiffs and they are not entitled to the relief of injunction because of acquiescence of the continuous user openly and as of right from 1966 by defendant No. 2 and from 1978 by defendant No. 1. The defendants further submit that Amar Chand as assignor has not used the trade mark since 1974; the plaintiffs have not come to Court with clean hands; they are guilty of concealment of material particulars and have made false statements; suit is barred by time.

The short question for decision is whether the defendant during the pendency of this suit are to be restrained from using the trade mark PARI CHAP? It is admitted that Amarchand Atmaram and Moolchand Veerchand entered into partnership with effect from 1st November, 1957 in terms of a deed dated 25th December, 1957 to carry out partnership business under the name and style of Amarchand Atmaram, and the firm was dissolved on 30th September, 1966 as per deed of dissolution dated 1st October, 1966, all the assets and liabilities including cash in-hand and closing stock as on 30th September, 1966 were taken over by Amar Chand at book value and it was agreed that Amar Chand would be entitled to carry on business under the name and style of M/s. Amarchand Atmaram on and from 1st October, 1966. The dispute relates to trade marks No. 138786, 158448 and 321356.

Briefly the facts relating to these trade marks are that the trade mark PARI CHAP under No. 138786 as of 17th May, 1949 was registered in the name of Amarchand Atmaram. Another application for registration of the trade mark was made by Amarchand Atmaram on or about 21st April, 1953 and it was registered at No. 158448 as of 21st April, 1953. In the Trade Marks Journals dated 1st October, 1954 this trade mark as of 21st April, 1953 was notified mentioning that trade mark No. 158448 was associated with No. 138786. Learned counsel for the defendants submits that in June 1961 an application in Form TM-24 under the Trade and Merchandise Rules, 1959 was made for the registration of the said two trade marks No. 138786 and 158448 in the names of Amarchand Atmaram and Mool Chand Veerchand as subsequent proprietors. A photostat copy of the Trade Marks Journal dated 1st December, 1961 shows that formerly Amarchand Atmaram was proprietor of the two trade marks and subsequently Amarchand Moolchand and Moolchand Veerchand trading as Amarchand Atmaram Bidi Factory, Rajasthan became the proprietors of the two trade marks. In other words Amarchand Atmaram and Moolchand Veerchand partners of the firm Amarchand Atmaram constituted under the deed dated 25th December, 1957 were registered as proprietors of the two trade marks. During the course of arguments learned counsel for the plaintiffs has also brought to my notice the Trade Marks Journal dated 1st April, 1983 wherein the proprietor of trade mark 158448 has been shown as Amar Chand trading as Amarchand Atmaram. In the Trade Marks Journal dated 1st December, 1961 Amarchand Atmaram and Moolchand Veerchand were shown as the registered proprietors, How and when the name of Moolchand Veerchand was deleted with respect to 185448 is not clear from any document on record.

On 2nd November, 1960 an application was made by Amarchand Atmaram and Moolchand Veerchand for registration of the trade mark PARI CHAP and claimed user since 1955. This trade mark was registered under No. 198814 and it was claimed to be associated with trade mark No. 138786. The trade mark representation is available on record in the Trade Marks Journal No. 333 dated 16th April, 1983. It appears that trade mark No. 198814 was renewed from time to time upto 1974 in the said two names of Amarchand Atmaram and Moolchand Veerchand.

An application dated 16 December, 1976 on Form TM-1 showing the representation under the trade mark No. 198814 previously registered under the names of Amarchand Atmaram and Moolchand Veerchand was filed requesting the Registrar of Trade Mark, New Delhi to register again the said mark. The representation of the said trade mark was registered at No. 321356 as of 21st December, 1976. The plaintiffs have filed on record certificate of registration relating to trade mark 321356 together with a Photostat copy of the representation of the trade mark. On a comparison the representation attached to the trade marks 198814 and 321356. I find that both are identical. Moreover in the application on Form No. TM-1 the applicant has made a reference to the old trade mark 198814 and the Trade Marks Journal's dated 16th April, 1963. It is therefore, apparent that trade mark No. 198814 which was got renewed after 1974, was got registered afresh as of 21st December 1976 under No. 321056. Trade Marks Journal No. 713 dated 16th February, 1979 shows that trade mark No. 321356 as of 21st December, 1976 is associated with 158448, that it is registered in the two names Amarchand Atmaram and Moolchand Veerchand, and that they claimed user of the said trade mark from the year 1955. Amarchand Atmaram and Moolchand Veerchand also represented that they are trading as Amarchand Atmaram.

In the dissolution deed dated 1st October, 1966 there is no specific reference how these three trade marks are distributed or assigned. All the parties have claimed continuous user of the three trade marks from 1st October, 1966. Learned counsel for the plaintiffs submits that on request, on Form TM-16 dated 11th September, 1981 under section 57(1)(a) of the Trade and Merchandise Act and by order dated 17th November, 1981 the registered proprietor's name was corrected by deleting one of the partners name viz. Mool Chand. Learned counsel for the defendants submits that no notice of application under form TM-16 for deleting the name of Mool Chand was ever served upon the heirs of Mool Chand as required under Rule 99 of the Trade Marks Rules, 1959. Mool Chand was dead when this application was made and as such, it is claimed by the learned counsel for the plaintiffs that no notice could have been issued to him. It is submitted by the learned counsel for the defendants that without notice of application on Form TM-16 the name of Mool Chand could not have been deleted. He submits that the heirs of Mool Chand have been continuously using the said trade mark and therefore, the alleged deletion of the name of Mool Chand without notice is invalid.

I have taken into consideration all documents filed by the parties and prima facie I am of the opinion that originally first two trade marks No. 138786 and 158448 were got registered by Amarchand Atmaram and that the third mark No. 198814 was got registered on 2nd November, 1960 in the two names Amarchand Atmaram, and Mool Chand Veerchand, and similarly the trade mark No. 321356 was got registered in the said two name. It is also apparent from the photostat copies of the various Journals and other documents on record that Amarchand Atmaram and Moolchand Veerchand were also recorded as subsequent properties of the two trade marks No. 138786 and 158448. In short at present Amarchand Atmaram and Moolchand Veerchand have been shown as subsequent proprietors of all the three registered trade marks in suit.

Learned counsel for the defendants submits that the partners of the two firms of the defendants are the heirs of Moolchand Veerchand. The firm defendant No. 1 was constituted in 1978 with Ishwar Das and Laxman Das sons of Moolchand Veerchand deceased as partners. Documents have been filed on behalf of defendant No. 1 showing sales of the Bidis under trade mark PARI CHAP during the period from 4th September, 1978 to January, 1982. Photostat copies of some of the bills showing sale are available on record. The defendant No. 1 has also produced a photostat copy of the bill from M/s. Amarchand Atmaram dated 10th May, 1978 showing sale of raw-material to defendant No. 1. By this bill, it is apparent that plaintiffs were aware of the existence of the firm defendant No. 1 in 1978. It is further submitted that the bills addressed to defendant No. 1 show the preparation of the advertisement material with respect to the PARI CHAP Bidi. It is thus submitted that defendant No. 1 has been in existence to the knowledge of the plaintiffs since 1978, that it has been carrying on its business and using the trade mark PARI CHAP.

The firm Moolchand Veerchand defendant No. 2 has been inexistence since 1st October, 1966. It was a sole proprietary concern of Mool Chand upto December 1972. On 1st January, 1973 Mool Chand and his son Girdhari Lal became partners vide partnership deed dated 16th March, 1973. From 1st January, 1975 Girdhari Lal retired from the said firm and Laxman Das s/o Mool Chand and Gomti Devi wife of Mohal Lal Khatri joined the firm, vide partnership deed dated 1st January, 1975. This Smt. Gomti Devi is none else but the wife of the partner Mohan Lal Khatri of the plaintiff firm. She continued to be a partner in the firm upto December 1977. On 1st January, 1978 Mool Chand and Girdhari Lal again became partners while Laxman Das and Gomti Devi retired from the firm vide partnership deed dated 2nd January, 1978. Mool Chand died in May 1979 and therefore his son Girdhari Lal and widow Diyali Devi have been partners of the firm defendant No. 2 vide partnership deed dated 22nd May, 1979.

It is admitted that the plaintiffs and the defendants are the descendants of the common ancestor Shambuji Ishwar Dass, Girdhari Lal and Laxman Das partners of defendants firms are the sons of Mool Chand and Mool Chand is son of Veer Chand. Further Mohan Lal Khatri partner of the plaintiff's firm is son of Amar Chand and grandson of Atma Ram and all are the descendent of Shambuji. Further it cannot be disputed that the parties are closely related and they have been carrying on their business in the small town of Beawar, Rajasthan since long.

There has also been another firm under the name and style of Ishwar Das Mohan Lal & Co. since 1955 wherein Ratanji, Ishwardas s/o Mool Chand and Mohanlal s/o Amar Chand were partners upto 30th September, 1966. A photostat copy of the partnership deed dated 1st October, 1966 of this firm shows that on dissolution of the firm Amar Chand Atmaram, on 30th September, 1966 Amar Chand and Mool Chand joined the firm Ishwardas Mohanlal & Co. and that this firm had been continuing since then. The plaintiffs have filed another partnership deed dated 1st Feb. 1978 of this Firm consisting of Smt. Kasturi Devi wife of Amar Chand and Mohan Lal son of Amar Chand. From the various partnership deeds of this firm it is clear, that family members of the plaintiff and the defendants are partners of this firm upto Jan. 1978. The argument of the learned counsel for the defendant is that defendant No. 2 who has been in existence since 1st Oct., 1966 first as a sole proprietorship concern and thereafter as a partnership concern has been selling Bidis of various description under all the trade marks PARI CHAP to the firm Ishwardas Mohanlal & Co. and therefore, it must be held that the plaintiffs have been aware of the business of the defendant No. 2 since then. The learned counsel has referred to a bill dated 8th October, 1966 showing sale of Bidis of various types under the trade PARI CHAP by defendant No. 2 to M/s. Ishwardas Mohanlal & Co. It shows the knowledge of the plaintiffs regarding the business of defendant No. 2. The learned counsel has also referred to the other bills of defendant No. 2, showing sales of Bidis under the impugned trade marks to the firm Ishwardas Mohanlal & Co. These bills are for the period 8th October, 1966 to 10th Dec., 1968. Girdhari Lal s/o Mool Chand has filed his affidavit dated 30th August, 1983 deposing that during 1st January, 1969 to December, 1977 the firm defendant No. 2 supplied the Bidis under trade mark PARI CHAP of the value of over Rs. 45 lakhs to the firm Ishwardas Mohanlal & Co. He has further deposed that the bills relating to sales during the period from January 1969 to December 1977 are not available with him, that the bill books in respect of those supplies were in the custody of the said firm Ishwardas Mohanlal & Co. which is now owned and managed by the family members of the plaintiff. The defendant No. 2 has also filed photostat copies of bill regarding sale of the PARI CHAP Bidis to persons other then the said firm for the period January 1978 to June 1983. The correctness of the photostat copies of the documents filed by the defendants is supported by an affidavit of Girdhari Lal. From the photostat copies of the bills showing sales by defendant No. 2 of the PARI CHAP Bidis it appears that defendant No. 2 has been carrying on business under the name of Moolchand Veerchand and has been selling Bidis under the impugned trade marks since October, 1966. It also appears prima facie that all these facts have been within the knowledge of the plaintiffs. I am therefore, of the opinion that prima facie defendants No. 1 has been carrying on business of Bidis under the trade mark PARI CHAP since 1978 of which the heirs of Mool Chand are the partners. Further I am prima facie of the opinion that defendant No. 2 constituted by the heirs of Mool Chand has been carrying on business since October, 1966 and using the trade mark PARI CHAP since then. I am also of the opinion that prima facie Amarchand Atmaram and Mool Chand Veerchand have been shown as proprietors of the three marks in question in various Trade Marks Journals.

(3.)LEARNED counsel for the plaintiffs has referred to sections 31, 32 and 33 of the Trade and Merchandise Marks Act, 1958 and submits that registration in the records of Registrar of Trade Marks is prima facie evidence of the ownership of the various trade marks, and that the registration is conclusive as to its validity after 7 years. There may not be any dispute about this proposition of law but the whole question for decision at this stage is whether the defendants are to be restrained from using the trade marks which they have been using since October, 1966. This user may be right or wrong but at this stage it cannot be said that they have not been using the trade mark since October 1966 to the knowledge of the plaintiffs.
The decision of the plaintiff's suit in my opinion depends on the question whether on the date of dissolution i.e. 30th September 1966 Mool Chand Veerchand acquired any right to continue user of the three trade marks. This question is not free from doubt. The disputed question cannot be decided in an interlocutory application. But as defendants have been using these trade marks within the knowledge of the plaintiffs since 1966 and Mool Chand Veerchand their predecessor has been shown along with Amarchand Atmaram as proprietor of the three trade marks in the various Trade Marks Journals, it is not a fit case to restrain the defendants from using the various trade marks in suit. I, therefore, vacate the ex-parte injunction dated 25th May, 1983 but however I deem it fit and proper, in view of the complicated question whether Mool Chand acquired any right to use the trade marks after 1st October, 1966, to direct the defendants to file statement of sales relating to Bidis under the trade marks PARI CHAP in suit. They are directed to file their first statement of account for the period from 25th May, 1983 to 31st December, 1983 upto 31st January, 1984. They are also directed to file statement of accounts for every six months from 1st January, 1984 onwards within one month of the expiry of accounting period. The application (I.A. 3521/83) is therefore, allowed and the application (I.A. 2434/83) stands disposed of in terms of the order directing the defendants to file statements of accounts as above. No order as to costs.

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