IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 31ST DAY OF JULY 2017 PRESENT THE HON’BLE MR.JUSTICE JAYANT PATEL AND THE HON’BLE MRS.JUSTICE S.SUJATHA R.F.A.No.818/2016 BETWEEN :
CANARA BANK A PUBLIC LIMITED COMPANY OF GOVERNMENT OF INDIA HAVING ITS REGISTERED OFFICE AT J.C.ROAD, BENGALURU REPRESENTED BY MANAGER BASAVANAGUDI BRANCH BENGALURU-560004. … APPELLANT (BY SRI.B.C.THIRUVENGADAM, ADVOCATE) AND:
1. N.G.SUBBARAYA SETTY S/O LATE N.M.GOVINDARAJA SETTY AGED ABOUT 61 YEARS R/AT No.1/1, 1ST CROSS SHANKARAPURAM BENGALURU-560004.
2. N.S.SUHAS S/O SRI.N.G.SUBBARAYASETTY AGED ABOUT 39 YEARS R/AT No.1/1, 1ST CROSS SHANKARAPURAM BENGALURU-560004. … RESPONDENTS THIS RFA UNDER SECTION 96 OF CPC, 1908 AGAINST THE JUDGMENT AND DECREE DATED 30.10.2015 PASSED IN O.S.No.495/2008 ON THE FILE OF THE 42ND ADDL. CITY CIVIL AND SESSIONS JUDGE, BANGALORE, DECREEING THE SUIT FOR RECOVERY OF MONEY.
THIS APPEAL HAVING BEEN RESERVED FOR ORDERS ON 14.07.2017, COMING ON FOR PRONOUNCEMENT OF ORDER, THIS DAY, S. SUJATHA, J., PASSED THE FOLLOWING:
ORDER We have heard learned counsel for the appellant on merits of the appeal simultaneously with I.A. for consideration of delay.
2. This appeal is directed against the Judgment and decree passed by the 42nd Additional City Civil and Sessions Judge, Bengaluru (‘Trial Court’ for short) in O.S.No.495/2008.
3. For the sake of convenience, the parties are referred to as per their status/title in the Trial Court.
4. Facts in brief are:
The plaintiff has availed credit facility from the defendant No.1-bank and defendant No.2 stood as guarantor for the repayment of credit facilities extended by the defendant No.1-bank to the plaintiff. It transpires that the plaintiff defaulted in the repayment of the said credit facilities and to recover the defaulted amount of Rs.53,49,970.22 with future interest due, the defendant No.1-bank, has filed O.A.No.440/2002 before the Debt Recovery Tribunal (‘Tribunal’ for short), Bengaluru against the plaintiff and defendant No.2. The plaintiff, in order to repay the dues of the bank, has assigned his Trade Mark “EENADU” in favour of the bank and executed the assignment deed dated 08.10.2003. The plaintiff filed a suit in O.S.No.495/2008 against the defendant No.1 bank and defendant No.2 guarantor for a judgment and decree to recover a sum of Rs.17,89,915/- together with interest at 18% per annum from the date of filing of the suit till realization, towards the arrears of royalty amount for the period 01.04.2004 to 30.04.2007 in terms of the assignment deed dated 08.10.2003. The Bank contested the suit filing the written statement. On the basis of the pleadings, the following issues were framed by the trial Court:
“1. Whether the plaintiff proves that defendant is liable to pay Rs.17,89,915/-?
2. Whether the plaintiff is entitled for future interest? If so, at what rate?
3. Whether the plaintiff proves that defendant No.1 has obtained Assignment Deed in its favour on 08.10.2003?
4. What order or decree?
The above said issues are answered thus: Issue No.1:- In the affirmative.
Issue No.2:- In the affirmative. Issue No.3:- In the affirmative. Issue No.4:- As per the final order.”
5. In support of the plaintiff, the plaintiff examined himself as PW 1 and marked the documents, Ex.P1 to Ex.P20. On the other hand, the manager of defendant No.1 bank was examined as DW 1 and marked the documents, Ex.D1 to Ex.D7.
6. The Trial Court profusely analyzing the evidence on record, decreed the suit directing the defendant No.1 to pay a sum of Rs.17,89,915/- with future interest at the rate of 18% per annum on the amount of Rs.13,32,000/- from the date of suit till realization. Aggrieved by the same, the defendant No.1- bank is in appeal.
7. Originally, on 14.07.2017, learned counsel Sri.H.R.Katti, appearing for the appellant submitted that the Trial Court failed to appreciate the vital aspects as regards the infirmities pointed out by the defendant No.1-bank in much as the insufficiently stamped assignment deed (Ex.P6) which would not have been either considered by the Court below nor acted upon by the plaintiff as he is the author of the deed, a beneficiary who has not paid sufficient stamp duty on the consideration which works to about Rs.94,84,800/-. Besides the same, the said assignment deed being an unregistered document, is not in conformity with the provisions of the Trade Marks Act, 1999 (‘Act’ for short). Primarily, on these two grounds, the judgment and decree impugned herein were challenged. After the arguments were concluded, then the learned Counsel Sri.B.C.Thiruvengadam made a request before the Court to consider additional arguments/points to be advanced by him. At his request, the matter was directed to be listed for further consideration on 19.07.2017. Accordingly, we have further heard Sri.B.C.Thiruvengadam on 19.07.2017. The learned counsel submitted that the assignment deed dated 08.10.2003 was unauthorizedly signed by the then manager of the bank with the plaintiff which is per se illegal as per Section 6 of the Banking Regulation Act, 1949. Section 6(2) of the said Act prohibits bank from carrying on any activity which is not covered under Section 6(1) of the Act. Accordingly, accepting the assignment of Trade Marks rights/or collecting royalties thereon are not banking activities within the scope of Section 6(1) of the Act. Apart from this, the Reserve Bank of India prohibits such assignment as consideration of discharge of debt. Secondly, it was contended that the assignment deed mandatorily ought to have been registered with the Registrar of Trade Marks in accordance with Section 43 of the Trade Marks Act, 1999. The assignment deed dated 08.10.2003 was the basis on which the suit has been filed by the plaintiff on 28.05.2007. As on the date of filing of the said suit, the then prevailing law in terms of Section 45(2) of the Trade Marks Act, places an embargo for the Courts to entertain the suit to consider the unregistered assignment deed as an evidence, When there is an express bar on the Court below from considering the unregistered agreement of assignment insufficiently stamped, the Court below ought to have rejected the same. However, the learned counsel fairly submitted that even though these grounds were not urged before the Court below, it is the bounden duty of the defendant No.1 bank to urge these grounds before this Court.
8. We have carefully considered the arguments advanced at the hands of the learned counsel appearing for the defendant No.1 bank and perused the material on record.
9. Undisputed facts are that the defendant No.1 filed an application before the Debt Recovery Tribunal at Bengaluru in O.A.No.440/2012 claiming a sum of Rs.53,49,970.22 in respect of amount due jointly by the plaintiff and his son (defendant No.2) for the default committed in the repayment of the credit facility availed by the plaintiff. In furtherance to the said proceedings, on various modes and methods offered and adopted by the bank to secure the amount due, it transpires that the plaintiff agreed for the offer of defendant No.1 to assign the Trade Mark “EENADU” in favour of the bank by the assignment deed dated 08.10.2003.
10. The relevant clauses of the assignment deed runs thus:
“Cl. 1: The assignor hereby grant, transfer and assign upon the assignee upon the terms and conditions mentioned hereunder, the exclusive use and all benefits of the aforesaid Trade Mark ‘Eenadu” in relations to the agarabathies (Incense Sticks) for a period of ten years from the date of this Agreement i.e., 01.10.2003 to 30.09.2013.
Cl. 2 : The assignee shall pay the sum of Rs.76,000/- (Rupees seventy six thousand only) per month payable for the period of first six years i.e., from 01.10.2003 to 30.09.2009.
(i) Rs.40,000/- shall be credited to the loan amount of the assignor every month and (ii) the balance of Rs.36,000/- to be paid to the assignor / permitted to be drawn by him until the expiry of first six years i.e., 01.10.2003 to 30.09.2009 and Cl. 3 : The assignee shall pay the sum of Rs.83,600/- per month payable for a period of next four years i.e., from 01.10.2009 to 30.09.2013.
(i) Rs.40,000/- shall be credited to the loan account of the assignor every month and (ii) the balance of Rs.43,600/- to be paid to the assignor / permitted to be drawn by him until the expiry of next four years i.e., 01.10.2009 to 30.09.2013.”
11. It is also not in dispute that the plaintiff had filed a suit in O.S.No.2832/2004 against defendant No.1 for recovery of the amount payable by it under the said assignment deed till the end of 31.03.2004 which was decreed directing the bank to make the said payment. As per the said assignment deed, the defendant No.1 took assignment of Trade Mark “Eenadu” for a period of 10 years for the royalty fixed therein. Now, the present suit is filed claiming royalty amount for the period from 01.04.2004 to 30.04.2007 for a sum of Rs.13,32,000/-
at the rate of Rs.36,000/- per month with interest thereon. Yet another suit O.S.No.7018/2004 was filed by the bank challenging the assignment deed (Ex.P6) which was originally allowed and pursuant to Miscellaneous Petition No.324/2013 filed by the plaintiff, the order was passed in favour of the plaintiff. It is manifestly clear that both these suits were decided against the bank and in favour of the plaintiff which has reached finality wherein, it was held that (i) the Assignment deed dated 08.10.2003 is valid and not vitiated by misrepresentation, fraud, mistake, etc., (ii) unilateral cancellation of the assignment deed by defendant No.1 is illegal and (iii) Assignment deed is enforceable.
12. Now the main ground of attack is in as much as insufficiently stamped assignment deed and non- registration of the trade mark by the competent authority. Much emphasis is placed by the learned counsel appearing for the Bank on these two aspects and the following judgments are referred to:
i) “RUSTOM CAVASJEE COOPER V/S.
UNION OF INDIA” reported in 1970 (1) SCC 248;
ii) “JALANDHAR IMPROVEMENT TRUST V/S. SAMPURAN SINGH” reported in AIR 1999 SC 1347; AND iii) “KAMLESH BABU AND OTHERS V/S. LAJPAT RAI SHARMA AND OTHERS”
reported in (2008) 12 SCC 577.
13. The new ground urged by the Bank is as regards Section 6 of the Banking Regulations Act and the scope and effect of the assignment deed in terms of the provisions of the Banking Regulations Act. Indisputably, the grounds regarding insufficiently stamped assignment deed and non-registration of the trade mark were argued by the Bank which were considered and addressed by the trial Court in O.S.No.2838/2014 and O.S.No.7018/2014. In such circumstances, raising the very same grounds in the second round of proceedings, the issue in which the matter directly and substantially has been heard and finally decided in a former suit between the same parties, litigating under the same title amounts to resjudicata. Defendant No.1-Bank is precluded from raising the same objection in the present proceedings which is finally decided holding the assignment deed as legal and binding on the defendant No.1-Bank.
14. Once it is clear that the Trial Court has adjudicated the matter on the same issue and decision is given, then the finding of the said judgment will continue to bind the parties. No differential treatment can be given in a subsequent suit. In the case of BARKAT ALI AND ANOTHER V/S. BADRINARAIN reported in 2008 (4) SCC 615 the Hon'ble Apex Court has held as under:
“8. The principles of res judicata not only apply in respect of separate proceedings but the general principles also apply at the subsequent stage of the same proceedings also and the same Court is precluded to go into the question again which has been decided or deemed to have been decided by it at an early stage.”
15. The Division Bench of this Court in the case of K.R.CHINNAKRISHNA SETTY V/S. SRI AMBAL & CO., reported in (1972) 2 Mys LJ 444, has held that if a mark cannot be registered on the ground that it contravenes Section 12(1), then it follows that the user of the said mark will have to be restrained also in a suit filed under Section 105 . In such a situation, if a reason is given in an earlier proceedings between the same parties, there is little reason for holding that the said decision would not operate as res judicata in a proceedings under Section 105 of the Act in which the same question arises for consideration. Their Lordships have placed reliance on the decision of the Hon'ble Apex Court reported in RAJ LAKSHMI DASI V/S. BANAMALI SEN, wherein it is held that if the case can be brought within the scope of general rule of res judicata, the decision in the earlier proceeding can still be used as a bar in a subsequent proceeding notwithstanding the fact that the earlier decision does not satisfy all the requirements of Section 11 CPC. The Hon'ble Apex Court in the said judgment has observed that when a plea of res judicata is founded on general principles of law all that it is necessary to establish is that the Court that heard and decided the former case was a Court of competent jurisdiction. A plea of res judicata on general principles can be successfully taken in respect of judgments of the Courts of exclusive jurisdiction. The material placed before us in this case is sufficient in the eye of law to come to the same conclusion. Having regard to the principles of res judicata, it would be held that no parties can agitate the same issue again once the said issue has been decided by the Court in the earlier proceedings and the same being accepted by the parties.
16. At this stage, we are not impressed by the arguments of the learned counsel for defendant No.1 on the same issues relating to the insufficiency of the stamp and non-registration of the trade mark. It is further imperative inasmuch as the applicability of Section 45 of the Trade Marks Act, 1999 which may be necessary to establish the entitlement of a person, assignment or transmission to a trade mark, but not to a case where the claim is for the recovery of the amount due in terms of the assignment deed.
17. The further argument of the learned counsel as regards Section 6 of the Banking Regulations Act also cannot be countenanced as the said ground was not urged before the Court below as fairly admitted by the learned counsel for Defendant No.1. It is not in dispute that the pleadings are silent on this point. As such, there was no occasion for the trial Court to frame any issue on the said point and resultantly, no finding is given on this point by the Court below. In such circumstances, the new ground urged by Defendant No.1 cannot be entertained, more particularly when the trial Court has decided the issue and directed the Bank to make the payment in terms of the assignment deed in the earlier proceedings. The right accrued to the other party cannot be disturbed now, at this belated stage. Hence we reject the new grounds canvassed by the learned counsel for the Defendant No.1-Bank. Further such ground even if considered as was available to the Bank, then such could be agitated in earlier round of litigation of above referred O.S. No.7618/2004 but if not agitated, the same is deemed to have been concluded by principles of constructive resjudicata. Under the circumstances, the contentions even if considered for examination, cannot be entertained. Hence, deserve to be rejected.
18. The judgments relied upon by Defendant No.1-Bank are not applicable to the facts and circumstances of the case.
For the reasons aforesaid, we decline to interfere with the impugned judgment and decree. Accordingly, appeal deserve to be dismissed.
As aforesaid the appeal being devoid of merit, no prejudice would be caused to the respondent in condoning the delay of 70 days in filing the appeal. Accordingly, the delay is condoned. IA-1/2016 is allowed.
The appeal is dismissed.
Sd/- JUDGE Sd/- JUDGE NC/ln.