1. Heard Sri B.P.Singh, Senior Advocate assisted by Sri Prateek Kumar, learned counsel for the plaintiff-appellant and Sri Kunal Ravi Singh, learned counsel appearing for the defendants-respondents.
2. The order impugned is dated 27.1.2014 which has been passed in Original Suit No.2 of 2011 (Smt. Asha Agarwal and others Vs. M/s. Arvind & Company and others).
3. The plaintiffs-appellants have been refused interim injunction by the court of first instance in a suit for a decree of perpetual injunction in an action for passing off goods by the defendants-respondents as if they were good of the plaintiffs-appellants.
4. The application for interim injunction filed under Order 39 Rule 1 C.P.C. has been rejected on the ground that the plaintiffs-appellants have failed to make out a prima facie case for grant of interim injunction and consequently the balance of convenience is is not in their favour and they are not likely to suffer any irreparable loss in case injunction is refused.
5. The finding that the plaintiffs-appellants have no prima facie case has been returned primarily for the following three reasons:
(1) The firm Ravindra and Company that was using the trade mark "Bandar Dholak Chhap" stood dissolved;
(2) A dissolved firm cannot be reconstituted and the firm Ravindra and Company presently in existence is a new firm having no right over the trade mark "Bandar Dholak Chhap";
(3) The District Judge, Jorhat (Assam) in a similar suit between the parties instituted at Jorhat has rejected the application of the plaintiffs-appellants for interim injunction which order has been affirmed by the Gauhati High Court.
6. A firm M/s. J.M. Agarwal Tobacco Company Private Limited is a manufacturer of tobacco at Kaimganj, U.P. It is having registered trade mark "Bandar" and "Bandar Chhap".
7. Previously, a firm Ravindra and Company was constituted with two partners Ravindra Kumar Agarwal and Smt. Sarita Agarwal wherein subsequently, Smt. Asha Agarwal was taken as a third partner. This firm was also dealing in tobacco and was using the trade mark "Bandar Dholak Chhap". It applied for the registration of the aforesaid trade mark. It was resisted by the company M/s. J.M. Agarwal Tobacco Company Private Ltd. The matter was reconciled and a compromise was arrived into between the above two parties. M/s. J.M. Agarwal Tobacco company Private Limited permitted the firm Ravindra and Company to use the trade mark "Bandar Dholak Chhap" subject to payment of some fixed royalty. In view of the said compromise, the application for registration of the trade mark "Bandar Dholak Chhap" was withdrawn by the firm Ravindra and Company.
8. It appears that two of the partners Ravinndra Kumar Agarwal and Smt. Sarita Agarwal of the above firm Ravindra and Company decided to withdraw from the partnership as a consequence of which the third partner Smt. Asha Agarwal also expressed her intention to keep herself away from the said firm and to dissolve it.
9. After the aforesaid all three partners expressed intention to withdraw from the partnership and to dissolve the firm, the third partner Smt. Asha Agarwal inducted her husband Surendra Kumar Agarwal as a new partner and is said to have reconstituted the firm on 1.12.2008. The firm continued with the existing business of the tobacco with the same trade mark "Bandar Dholak Chhap".
10. On the other hand, a entirely new firm M/s. Arvind and Company was constituted and got registered w.e.f. 1.4.2008 with Arvind Kumar Agarwal, Smt. Beena Agarwal, Ankit Agarwal and Rohit Agarwal as partners. The aforesaid new firm also started doing business in tobacco and adopted the trade mark "Bandar Dholak Chhap".
11. The supply of tobacco by the aforesaid firms was not confined to the State of U.P. but was also in the State of Assam.
12. Smt. Asha Agarwal, one of the partners in the alleged reconstituted firm Ravindra and Company herself and on behalf of the said firm instituted a suit for a decree of permanent injunction and for action of passing off in the court of District Judge, Jorhat along with an application for temporary injunction against M/s. Arvind and Company and its partners. The said injunction application on contest by M/s. Arvind and Company and its partners was rejected by the District Judge vide order dated 9.12.2009 on the ground that the original partnership firm Ravindra and Company stood dissolved and that the Court had no jurisdiction. The matter was taken in appeal by Smt. Asha Agarwal and the firm Ravindra and Company to the Gauhati High Court. The appeal was dismissed vide judgment and order dated 25.5.2011 upholding the order of the District Judge that as the original firm Ravindra and Company was a partnership at will, it stood dissolved in view of the correspondence between the partners w.e.f. 20.6.2008 or latest from 15.7.2008. The newly constituted firm Ravindra and Company has no right or claim over the trade mark "Bandar Dholak Chhap". The finding on the point of jurisdiction was reversed and it was held that the District Judge was not correct in holding that the court at Jorhat does not have jurisdiction to entertain the suit.
13. The above suit was later got dismissed as withdrawn on 8.3.2013.
14. It is in this background that the plaintiffs-appellants instituted the present suit at Farrukhabad in U.P. wherein the application for interim injunction came to be rejected by the impugned order.
15. The submission of Sri Singh, learned counsel appearing for the plaintiff appellant is that the material on record specially the notices inter se the partners of the original firm Ravindra and Company establishes beyond doubt that the firm was not dissolved rather two of its partners took voluntary retirement leaving all liabilities of the firm upon the third partner Smt. Asha Agrawal who had reconstituted the firm by inducting her husband as a new partner. The said firm is continuing with the tobacco business and is the prior user of the trade mark "Bandar Dholak Chhap". There is no bar in law for the surviving partners of the firm to reconstitute it and to continue with the business of the firm. The judgment and order of the District Judge, Jorhat as affirmed by Guwahati High Court can not come in way of granting interim injunction, as the court at Jorhat was not the court of competent jurisdiction on account of which the suit filed was ultimately withdrawn. The finding of the court having no jurisdiction would not be binding upon the competent court dealing with the matter.
16. On the other hand the submission of Sri Kunal Ravi Singh, learned counsel appearing for the defendant respondent is that the dissolution of the original firm Ravindra and company is implicit from the correspondence/notice of the parties and that since two of the partners have withdrawn themselves, a single partner could not have continued with the partnership in any manner which means the firm stood dissolved automatically. Once the firm stood dissolved, it could not have been reconstituted. The alleged reconstituted firm is in fact a new firm which can not be recognized as the prior use of the trade mark "Bandar Dholak Chhap".
17. In the light of the aforesaid facts and the submissions of the counsel for the parties, this court has been called upon to see if the court below is justified in refusing interim injunction to the plaintiffs-appellants.
18. The grant of interim injunction is primarily dependent upon three golden principles of prima facie case, balance of convenience and irreparable loss, apart from host of other relevant factors. The court can refuse to grant interim injunction where despite establishment of prima facie case, balance of convenience as well as irreparable loss the court is ex-facie satisfied that the suit itself is not maintainable for any reason or is likely to fail in the end.
19. It is admitted to the parties that the trade mark "Bandar Dholak Chhap" is not a registered trade mark of any of the rival parties, namely, the firm Ravindra and Company and the firm Arvind and Company.
20. Section 27 of the Trade Marks Act, 1999 (hereinafter referred to as the 'Act' reads as under:
"1. No action for infringement of unregistered trade mark. - (1) No person shall be entitled to institute any proceedings to prevent, or to recover damages for, the infringement of an unregistered trade mark.
(2) Nothing in this Act shall be deemed to affect right of action against any person for passing off goods or services as the goods of another persons or as services provided by another person, or the remedies in respect thereof."
21. It provides that no person is entitle to institute suit to prevent or to recover damages for the infringement of an unregistered trade mark. In view of plain and simple language of Section 27 of the Act, a suit for infringement of an unregistered trade mark or for an injunction in respect thereof is not maintainable.
22. The plaint of the original suit giving rise to the present appeal makes a prayer for the relief of permanent restraining the defendants, their servants, agents, stockists, whole-sellers, retailers and all other persons manufacturing, selling, advertising or directly or indirectly dealing in chewing tobacco on their behalf from using the trade mark "Bandar Dholak Chhap" or identical or similar mark of a deceptive nature as it amounts to passing of the goods as those of the plaintiffs-appellants and for damages to the tune of Rs.10,000/- on account of the above infringement.
23. In view of the relief claimed in the suit by the plaintiffs-appellants, the suit is apparently for infringement of the trade mark, permanent injunction restraining the use of the trade mark "Bandar Dholak Chhap" or any imitation thereof and for recovery of damages so that the defendants-respondents may not pass off their goods as if they are the goods of the plaintiffs-appellants. Therefore, the relief claimed in the suit is per se within the teeth of Section 27 of the Act.
24. In addition to the above, though generally two persons or parties cannot use the same trade mark for trading of a particular commodity or allied products, a person or the party in prior use of a particular trade mark has preference to use it viz-a-viz the subsequent user.
25. In this situation, a question arises as to which out of the two firms is the prior user of the aforesaid trade mark. The answer to it depends upon the status of the presently existing firm Ravindra and Company i.e. whether prima facie it is a reconstituted partnership of the original or all together a new partnership.
26. There is no dispute that the original firm Ravindra and Company with its erstwhile partners Ravindra Kumar Agarwal, Smt. Sarita Agarwal and Smt. Asha Agarwal had been in existence since 1986 and was reconstituted w.e.f. 1.4.1994. It was using trade mark "Bandar Dholak Chhap". The two of its partners Ravindra Kumar Agarwal and Smt. Sarita Agarwal had addressed letters dated 15.7.2008 to the third partner Smt. Asha Agarwal expressing their intention to retire from the firm w.e.f. 20.6.2008 and that the firm be dissolved. The third partner vide letter dated 15.7.2008 addressed to other two partners declared dissolution of the firm with immediate effect. The information of dissolution of the firm was also sent to the Superintendent, Central Excise, Kaimganj.
27. Section 32 of the Partnership Act, 1932 speaks about the retirement of the partners of the firm. It provides that a partner of a firm may retire:
(a) with the consent of other partners;
(b) in accordance with the express agreement by the partners; and
(c) where the partnership is at will, by giving notice in writing to all other partners of his intention to retire.
28. The original firm Ravindra and Company was a partnership at will. Therefore, any of the partner of the firm could have retired from the partnership by giving notice in writing to all other partners.
29. In view of the above legal position and the letters of the two of the partners, it is implicit that they had at least retired w.e.f. 20.6.2008 but as the said letters as well as the letter of the third partner talks about dissolution of the firm also it becomes essential to ascertain if it is a case of mere retirement of two of the partners of the firm or of its dissolution.
30. Section 43 of the Partnership Act, 1932 provides for the procedure for dissolution of partnership at will. It provides that a partnership at will may be dissolved by any partner by giving notice in writing to all other partners of his intention to dissolve the firm and the firm is dissolved from the date mentioned in the notice and, if no date is mentioned, from the date the notice is communicated.
31. In the instant case, the correspondence on record as referred to above prima facie indicates that all the partners, expressed their intention and desire to dissolve the firm though two of them have volunteered for retirement also. The letters not only contain the intention to retire but also to dissolve the firm.
32. In Eruch F. D. Mehta Vs. Minoo F. D. Mehta AIR SC 1653 it was observed that where a firm consists of two partners, the withdrawal of one will automatically result in its dissolution. Similarly, in a case of a firm consisting of more than two partners, if all but one withdraw, the partnership cannot continue and comes to an end.
33. In such circumstances, though the question of dissolution of the said firm, if any, or its reconstitution would be an issue to be decided on the basis of the evidence to be adduced at the time of hearing, the dissolution of the firm is apparent. Even if it is taken to be a case of retirement of two partners, it by necessary implication leads to dissolution of the firm as a partnership cannot be continued by a single person as till that time no new person or partner had been inducted.
34. One of the partners to the said firm Smt. Asha Agarwal is said to have inducted her husband into the said partnership on 1.12.2008 and the firm was said to have been reconstituted thereupon by virtue of partnership deed dated 1.12.2008. Thus, without expressing any final opinion on the dissolution of the aforesaid firm, prima facie, the original firm Ravindra and Company stood dissolved either w.e.f. 20.6.2008 or 15.7.2008 and the firm which is presently in existence in the name of Ravindra and Company is, therefore, not a reconstituted firm but a new firm which came into existence under the partnership deed dated 1.12.2008 which has not even been registered.
35. The firm Arvind and Company was constituted and registered w.e.f. 1.4.2008.
36. In these circumstances, the plaintiffs-appellants who owe their existence w.e.f. 1.12.2008 cannot prima facie be recognised as the prior user of the trade mark "Bandar Dholak Chhap" viz-a-viz defendants-respondents.
37. The District Judge, Jorhat as well as the Gauhati High Court have also prima facie found that the firm Ravindra and Company which was in existence stood dissolved w.e.f. 20.6.2008 or 15.7.2008 and the partnership in the name of Smt. Asha Agarwal and her husband Surendra Kumar Agarwal is new which had been constituted on 1.12.2008.
38. The court below has taken note of the aforesaid finding returned by the Courts at Assam in refusing interim injunction to the plaintiffs-appellants.
39. It is well established that the principle of resjudicata enshrined under Section 11 C.P.C. is equally applicable in respect of the decisions rendered at successive stages of the suit. Thus, even interlocutory orders passed at different stages of a suit have the binding effect provided the decision is rendered on merits.
40. The order of refusal of injunction to the plaintiffs-appellants by the Court at Jorhat cannot be said to be an order passed by a court having no jurisdiction, inasmuch as, the Gauhati High Court while affirming the order of the District Judge, Jorhat has clearly ruled that the Jorhat court had the jurisdiction in the matter and that the District Judge was not correct in holding otherwise. The order passed by the District Judge, Jorhat is therefore an order of the court of competent jurisdiction having binding effect.
41. The submission that the interlocutory order passed in a suit instituted at Jorhat had lost all relevance once the suit was withdrawn may have force but since the said order has not been set-aside on merits it at least has the persuasive value, if not the binding effect. Thus, the court below is not in error in placing reliance upon it.
42. The said suit was not decided on merits. It was withdrawn on 8.3.2013 without liberty to institute a fresh suit. Therefore, the plaintiffs-appellants could not have filed the present suit for the same cause of action. Successive suits for the same case are not maintainable. In that event the present suit would not be prima facie maintainable in view of Order 2 Rule 2 C.P.C.
43. Thus, in overall facts and circumstances of the case, the present suit of the plaintiffs-appellants is prima facie barred by Order 2 Rule 2 C.P.C. and it is not maintainable in view of Section 27 of the Act. The firm Ravindra and Company presently in existence is not prima facie the original firm which has been reconstituted, rather a new firm and, as such, the plaintiffs-appellants are not prima facie the prior user of the trade mark "Bandar Dholak Chhap". The finding of the Jorhat Court in this regard carries persuasive value and the court below is not in error in relying upon it. Therefore, I am of the opinion that the court below has not committed any error of law in denying interim protection to the plaintiffs-appellants at this stage.
44. Accordingly, I find no merit in this appeal and the same is dismissed with direction to the court below to decide the suit itself as expeditiously as possible by fixing short dates and curtailing all unnecessary adjournments in accordance with law without being influenced by any findings or observations made herein in above or otherwise.
45. The appeal is dismissed with no order as to costs.
Order Date :- 4.12.2014 Brijesh