Original Side Appeals filed under Clause 15 of the Letters Patent and Order 36 Rule 9 of Original Side Rules, against the common judgment and decrees dated 12.11.2008 passed by a learned single Judge of this Court in O.A.Nos.1072 to 1074 of 2008 in C.S.No.945 of 2008 respectively.
3. It was a suit filed by respondents 1 and 2 / plaintiffs for a declaratory relief that the partners of the 1st plaintiff firm, Mysore Dasaprakash, viz., the 2nd plaintiff and defendants 5 to 13 alone are entitled to use the trade mark, trade name and brand name DASAPRAKASH and its variants or any combination thereof, being the co-owners of the said trade name along with consequential injunction both permanent and mandatory to prohibit defendants 2 to 4 from using the registered trade mark, trade name and brand name as indicated in the title DASAPRAKASH.
4. It is the case of the plaintiffs before the learned single Judge and equally here also, that the trade mark, trade name and brand name were owned by the family members of one K.Seetharama Rao and they entered into a family arrangement on 03.05.1989 regarding the use of the same, as set out in document No.14. It is incorporated in a decree of court in C.S.No.285 of 1988, whereby it is clearly stipulated that any of the members or their legal representatives can use the trade name, trade mark and brand name DASAPRAKASH. At the same time, certain conditions are imposed. In breach of the conditions, one of the family members, by name, Balakrishna Rao, entered into an agreement with the 1st appellant/1st defendant, pursuant to which, they have been acting so. But only the family members of Seetharama Rao or the members of Balakrishna Rao can have the major shareholdings in the first defendant company. As such, what has been entered into was in violation of the agreement between the parties. Under such circumstances, the defendants should be restrained from using the same.
5. The applications were contested by the respondents/appellants, inter alia, stating that even the clause, which was found in the agreement between the parties and incorporated in the decree, will give room for using the trade mark by the defendants. Actually, a Memorandum of Understanding (MoU) was entered into on 16.01.2001, which culminated into an agreement dated 11.11.2001 executed by Balakrishna Rao. He had also obtained Rs.50 lakhs for use of the trade mark, trade name and brand name and thus, they were entitled to use the same. Under such circumstances, the applications are liable to be dismissed.
6. The learned Single Judge, after hearing the submissions and looking into the materials available, took a view that the respondents 1 and 2/plaintiffs have made out a prima facie case for grant of interim injunction and, accordingly, granted the same. Hence these appeals have arisen at the instance of the defendants.
7. Advancing the arguments on behalf of the appellants/defendants 1 and 2, Mr.Vaidyanathan, learned counsel would submit that clause 16 of the family arrangement was not properly construed by the learned single Judge while granting the interim order; that admittedly, Balakrishna Rao, for a consideration, had permitted the appellants to use the brand name DASAPRAKASH, DASAPRAKASH Ice Creams or any combination of the term DASAPRAKASH in any part of India; that the plaintiffs and Balakrishna Rao were estopped in any way from interfering with the rights of the appellants since they have been using the brand name uninterruptedly from 11.11.2001 pursuant to MoU dated 16.01.2001 executed by Balakrishna Rao; that he has also issued a letter of No Objection to the Registrar of Companies, thereby permitting the appellants to use the name DASAPRAKASH; that the appellants, on 16.12.2002, had applied for registration of three trade marks, viz., DASAPRAKASH, DASA and symbol D with a crown; that on 11.04.2005, the appellants application for using the symbol D was allowed and the other applications are pending before the Registrar of Firms; that the learned single Judge has not taken note of the fact that the plaintiffs and other members of DASAPRAKASH family have been interfering with the rights of the appellants with the sole object of unjustly enriching themselves and with a view to defeat the rights of the appellants; that after Balakrishna Rao having received a considerable amount of Rs.50 lakhs, had also filed an application before the Court for declaring him as an insolvent; that he was also declared as insolvent on 25.09.2003, which disentitled him from continuing on the Board of the 1st appellant; that he was one of the subscribers to the Memorandum of Association of the 1st appellant company and also its founder Director and that even as on date, Balakrishna Rao holds 10,000 shares in the 1st appellant company and it was he who promoted the 1st appellant company along with its other shareholders. It remains to be stated that Balakrishna Rao was not only holding 10,000 shares and was one among the family members of Seetharama Rao, but also executed the agreement in favour of the 1st appellant company.
8. Added further the learned counsel that even the interpretation of clause 16 would clearly indicate that the word party is intended to mean third parties and the agreement was entered into due to financial recession. Under such circumstances, the interpretation of Clause 16 found in the family arrangement entered into between the parties should not lead to mean one of the family members of DASAPRAKASH and thus, all would go to indicate that the plaintiffs have not made out a prima facie case and the learned single Judge should have dismissed the applications, but on the contrary, the learned Judge has taken an erroneous view to grant the relief. Under such circumstances, it is a fit case, where the order of the learned single Judge has got to be set aside.
9. The Court heard the learned senior counsel for the respondents 1 and 2/plaintiffs, who reiterated the contentions, which were putforth before the learned single Judge, in his sincere attempt of sustaining the order. He would further urge that the payment of Rs.50 lakhs, as stated by the appellants, cannot be true for the reason that when notice was issued by the Official Assignee, a reply was sent by the appellants through counsel stating that out of Rs.50 lakhs, only Rs.10 lakhs was received and Rs.40 lakhs was adjusted in the business affairs.
10. The Court has paid its anxious consideration on the submissions made by the learned counsel on either side and looked into the materials available also.
11. It is not in controversy that the trade name, trade mark and brand name of DASAPRAKASH belonged to the family members of one Seetharama Rao. It is admitted that the family members including Balakrishna Rao have entered into a family arrangement on 03.05.1989 and in the suit in C.S.No.285 of 1988 in which a compromise was entered into, the arrangement between the parties was actually incorporated. Clause 16 of the same reads as follows:
"It was further agreed to by all of us that any of the sons of late Mr.K.Seetharama Rao or their legal representatives can use the brand name of 'DASAPRAKASH' or 'DASAPRAKASH Ice Creams' or any combination of the term DASAPRAKASH in any part of India. However, it was clearly understood among them that in such an event, the said party or his/her respective legal heirs must remain in such undertaking if outsiders are taken into the said undertaking as a participant in any capacity whether as director or as a major share holder or as partner".
12. Now, it is the case of the plaintiffs before the trial court and equally here also, that according to the above clause 16, which was entered into between the parties, they were permitted to enter or allow third parties to join with them, but at the same time, a condition was imposed to the effect that the party must remain in such undertaking, if outsiders are taken into the said undertaking as a participant in any capacity, whether as a Director or as a major shareholder or as a partner and hence, having given an undertaking, the said Balakrishna Rao has entered into such an agreement with the 1st defendant, which would be in violation of the undertaking and under such circumstances, it has got to be prohibited and hence, defendants 1 to 4 should be restrained. On the contrary, the case of the appellants is that after receiving the sum of Rs.50 lakhs following an MoU dated 16.01.2001, Balakrishna Rao has entered into an agreement with them and they have been permitted to use the trade name, trade mark and brand name. Balakrishna Rao is one of the promoters and is also having 10,000 shares in his favour. Apart from that, he has also given a letter of no objection for the trade name, trade mark and brand name being used by the defendants exclusively. Under such circumstances, even the interpretation of clause 16 would clearly indicate that Balakrishna Rao could enter into such agreement, as done by him and, as such, the plaintiffs cannot come forward to say that their rights are infringed or seek an order of interim injunction, as sought for before the trial court. The trial court has not appreciated the circumstances under which Balakrishna Rao entered into an agreement as well as the clause 16 which was agreed to by all the members of the family of DASAPRAKASH including Balakrishna Rao, while granting the order of interim injunction. Under such circumstances, it has got to be vacated.
13. The Court is afraid to agree with the case put forth by the appellants. Here, in the instant case, the crux of the whole matter is that the said Balakrishna Rao entered into an agreement with the 1st defendant/1st appellant and also received a sum of Rs.50 lakhs and he has given a letter of no objection before the Registrar of Firms. These things are not disputed. The grievance of the plaintiffs before the trial court as well as equally here also, as has been ventilated in the averments of the plaint and in the affidavit filed in support of the application, is that the use of those trade mark, trade name and brand name of DASAPRAKASH is violative of the terms entered into between the parties, as incorporated in the decree in C.S.No.285 of 1988 on the file of this Court. Under such circumstances, either the defendants or any other person should not be allowed, in view of the undertaking given by Balakrishna Rao, as a party to that suit. Under these circumstances, the crux of the whole matter depends on the interpretation of clause 16, that is incorporated above. It will be quite clear from a reading of the above clause that every member of DASAPRAKASH family or their legal representatives were allowed to use the brand name DASAPRAKASH or DASAPRAKASH ice creams or any combination of the term DASAPRAKASH in any part of India. Thus, the first part would make it clear that the members of the family or their legal representatives have actually been permitted to do so, while in the second part a condition was imposed, which would clearly indicate that the said party or his/her respective legal heirs must remain in such undertaking if outsiders are taken into the said undertaking as a participant in any capacity whether as director or as a major shareholder or as a partner. This would clearly indicate that while permitting one of the family members or their legal representatives to enter into an agreement with a third party, the condition imposed in the clause relates not to the third party but only to the member of the family. In the considered opinion of the Court, the word "the said party" must be taken and should be looked into to mean all the members entered into agreement or their legal representatives, and further the condition imposed "in such an event, the said party or his/her respective legal heirs must remain in such undertaking" would clearly mean any member or the legal representatives, and actually the word, person would mean the party. Apart from this, if the contention putforth by the appellants that all of them are in financial constraints and under such circumstances, the intention could have been otherwise, cannot now be countenanced. A plain reading of the said clause would clearly indicate that the members of the family, when they entered into such arrangement, permitted one of the members or the legal representatives to allow third parties to do the business. It is only on condition that the same should have been done by retaining the position that particular member of the family holds, either as a director or as a major shareholder or as a partner. If it was felt that such a condition was not necessary, there would have been no need for imposing a condition as found therein and the clause could have been otherwise stating that any member of the family or legal representative can get third parties to carry on the business. All would go to show that the party in clause 16 would mean and convey, only a member of the family and not third parties. Under such circumstances, the learned single Judge has found a prima facie case available in favour of the plaintiffs and granted the order of interim injunction. The Court is unable to see any infirmity or illegality to disturb the interim order.
Under such circumstances, the appeals are dismissed, leaving the parties to bear their costs. Connected M.Ps.are closed. It is also made clear that at the time of disposal of the suit, any of these observations would not in any way stand in disposing of the suit on merits and in accordance with law.
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