F.A.O. No. 3707 of 2009 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH -- F.A.O. No. 3707 of 2009 Date of decision: October 12, 2009 Parveen Kumar and another ........ Appellants Versus Kuldeep Chand Jain .......Respondent Coram: Hon'ble Ms Justice Nirmaljit Kaur -.- Present: Mr. Amar Vivek, Advocate for the appellants Mr. Ashok Singla, Advocate for the respondent -.- 1. Whether Reporters of local papers may be allowed to see the judgement? 2. To be referred to the Reporter or not? 3. Whether the judgement should be reported in the Digest? Nirmaljit Kaur, J. This is an appeal against the judgement and interim orders dated 14.05.2009 passed by learned Additional District Judge, Ludhiana, granting interim injunction to the respondent/plaintiff and restraining the appellant/ defendants during the pendency of the civil suit from processing, blending, selling or marketing tea for sales or otherwise dealing in tea under the Trade Mark ‘Toofan Mail with the device of Train’, registered in the name of the respondent/plaintiff. Brief facts leading to the filing of the present appeal are that the appellant/defendants and the respondent/plaintiff, who are real brother, started the business of Tea under the Trade Mark ‘Toofan Mail’ with the F.A.O. No. 3707 of 2009 2 device of Train and Copy Right under the name and style of M/s Phool Chand and Sons. On 11.04.1988, the proprietorship of M/s Phool Chand and Sons was registered as a registered dealer and granted Registration Certificate No. 50839316 by the Sale Tax Department. Thereafter, on 06.03.1996, Parveen Kumar, appellant, herein, on behalf of M/s Phool Chand and Sons applied for registration of Trade Mark 'Toofan Mail' in respect of Tea. The aforesaid application remained pending with the Registrar Trade Mark and the same was circulated in Trade Mark Journals dated 21.12.2002 in the name of Parveen Kumar, but, in the meantime, the proprietorship concern M/s Phool Chand and Sons became a partnership firm with effect from 20.12.1999. After that, Parveen Kumar, joined Tarsem Lal son of Piare Lal, Narinder Kumar and Sandeep Kumar sons of Tarsem Lal, along with Kuldeep Chand Jain, respondent/plaintiff as partners and the proprietorship concern M/s Phool Chand and Sons was converted into partnership firm who took over the business along with all assets and liabilities. On 29.05.2000, Tarsem Lal, Narinder Kumar and Sandeep Kumar were retired from the partnership firm, which was constituted on 20.12.1999, and a deed of retirement was executed. Kuldeep Chand Jain, respondent/plaintiff and Parveen Kumar, appellant/defendant, continued as partners. Thereafter, the continuing partners Kuldeep Chand Jain and Parveen Kumar joined Ravi Jain and Sonu Jain as partners with them and a deed of partnership was executed on 30.05.2000. The aforesaid partnership continued the business with all assets and liabilities after the retirement of Tarsem Lal and his sons and continued the business of trading in tea with trade mark 'Toofan Mail' with the device of Train in specific get up and design. On 19.06.2000, the sale tax F.A.O. No. 3707 of 2009 3 number 50839316, granted to proprietorship concerned Phool Chand and Sons was changed in the name of M/s S R Tea Traders, whose proprietor was Parveen Kumar, and he started the business of Karyana goods etc. under the said name and style. Whereas the tea business was continued by the firm M/s Phool Chand and Sons, which became a partnership firm constituted by the plaintiff, defendant, Sonu Jain and Ravi Jain with effect from 30.05.2000. The firm M/s S.R.Tea Traders continued the business with Old Sale Tax No. 50839316, as is evident from the sale bills dated 19.06.2000, 21.06.2000, 26.06.2000, 02.01.2001, 07.01.2001. The Income Tax returns filed by Parveen Kumar for the assessment year 2001-2002 (Accounting Year 2000- 2001), wherein Parveen Kumar described himself as proprietor of M/s S.R. Tea Traders, previously Prop. M/s Phool Chand and Sons. On 26.06.2000, the partnership firm M/s Phool Chand and Sons applied fresh registration for blending, grading, packing and sale of tea etc. and was granted new Registration No. 51848711. It is stated that fresh certificate of registration in the name of M/s Phool Chand and Sons, partnership along with list of partners is placed on the file of Civil suit as well as counter claim. It was pointed out that after 30.05.2000, Parveen Kumar never filed any return of M/s Phool Chand and Sons as proprietor, but he has been filing returns of M/s S.R. Tea Traders. On 25.02.2001, an application was given to Registrar Copy Right for registration of the particular design etc. The registration certificate was issued on 13.02.2002, and by that time, Kuldeep Chand Jain, plaintiff, had already become the sole proprietor of the firm on retirement of Parveen Kumar, Ravi Jain and Subhash Jain with effect from 31.03.2001 and Kuldeep Chand Jain continued the business as sole proprietor with the assets F.A.O. No. 3707 of 2009 4 and liabilities of the partnership firm. The firm M/s Phool Chand and Sons had a current account in UCO Bank, Jagraon and the Bank was intimated about the change in the constitution of the firm vide letter dated 19.05.2001. The Income Tax Department was also informed of the constitution of the firm and retirement of Parveen Kumar, Ravi Jain and Subhash Jain from the firm and that Kuldeep Chand Jain continued the firm as sole proprietor vide letter dated 25.04.2001. A dispute arose between the parties, who are real brothers, relating to the property as well as to business. The same was resolved through Shri Amrit Lal Gupta, Arbitrator, who brought about a settlement between the parties and agreement dated 09.01.2004 was executed between the parties and it agreed between the parties that the Trade Mark Toofan Mail, Shere Punjab and Frontier Mail shall belong to Kuldeep Chand Jain, Proprietor Phool Chand and Sons and he will continue to carry on the business of packing tea under the said trade mark and that Parveen Kumar and other brothers shall not pack and trade in tea under the said trade mark and further the shop at Nehru Market, Jagraon was confirmed to have fallen to the share of Kuldeep Chand Jain. In the agreement, it was also agreed that Parveen Kumar, who has been carrying on retail business of tea leaves in Malerkotla will continue his such business at Malerkotla and will also continue to carry on business of tea leaves at Malaudh and Kup Mandies. It was also agreed that Parveen Kumar will sell sher-e-Panjab brand tea in retail after purchasing the same from Kuldeep Chand Jain. Later on, the appellants/defendants started passing off their goods by using packing material having similar design, get up and colour as that of the plaintiff. Plaintiff issued a strict warning to the defendants to resist F.A.O. No. 3707 of 2009 5 from doing this. Parveen Kumar also applied to Registrar of Copyright, New Delhi, for registration of changes in Copy Right Work A60730/2002 vide application dated 11.12.2008, plaintiff filed objections vide letter dated 18.12.2008. Accordingly, a civil suit was filed with an application for granting interim injunction, which was allowed. The present appeal has, therefore, been filed against the order, granting interim injunction to the respondent. While challenging the aforesaid order passed by the Additional District Judge, Ludhiana, the learned counsel for the appellants submitted that;- (i) the Registrar of Copyrights granted the registration of Copyright of the artistic work ‘Toofan Mail with the device of train and photograph of a model’ to the appellant, Parveen Kumar under No. A- 60730/2002 of dated 13.02.2002 under the Copyright Act, 1957; (ii) The appellant, Parveen Kumar is an illiterate person and his elder brother, Kuldeep Chand Jain, respondent/plaintiff, was assisting him in his business as to issue of cheques, invoices and other documents, the utter breach of trust, he used to obtained signatures of the appellant Parveen Kumar even on blank papers, which the appellant used to unsuspectingly sign; (iii) The earlier proprietary concern, M/s Phool Chand and Sons, Nehru Market, Jagraon of the appellant, Parveen Kumar, was still a going concern and business of marketing of tea under his well known trade mark ‘Toofan Mail with the device of Train and photograph of an advertising F.A.O. No. 3707 of 2009 6 model” was continued to be carried on , by it as usual and respondent, Kuldeep Chand Jain, fraudulently have taken over the business of the partnership firm M/s Phool Chand and Sons constituted vide Partnership Deed dated 30.05.2000, as proprietor with effect from 01.04.2001, in spite of the fact that no dissolution was ever executed dissolving the said firm. The respondent mischievously obtained a certificate dated 13.12.2001 from UCO Bank, Sujapur, Jagraon that M/s Phool Chand and Sons had a proprietorship Account since 01.04.2001 with Kuldeep Chand Jain as a proprietor, when the requisition made to the bank was of dated 19.05.2001 as to the closure of partnership Account No. 314 in the name of M/s Phool Chand and Sons, Jagraon and for opening of a new Current Account in the name of M/s Phool Chand and Sons, Jagraon, proprietor Kuldeep Chand Jain due to change of firm deed; (iv) The respondent, Kuldeep Chand Jain, in furtherance of his mala fide intention and ulterior motive got executed an agreement dated 09.01.2004 in the garb of an arbitration award given by one Shri Amrit Lal, who was an interested party and thus, tried to divest the appellant, Parveen Kumar of all his rights in the trade name, trade marks as well as goodwill and reputation acquired by the appellant Parveen Kumar, on account of extensive, regular and open use of his trade marks, trade name and copyrights. (v) The application No. 700862 for the registration of trade mark ‘Toofan Mail’ words per se, was advertised in the Trade Marks Journal No. 1285 (S-1) of dated 21.12.2002 at page No. 220 in the name of the appellant, Parveen Kumar, trading as M/s Phool Chand and Sons, Nehru Market, Jagraon, the respondent, Kuldeep Chand Jain, fraudulently obtained F.A.O. No. 3707 of 2009 7 registration certificate of the said Trade Mark No. 700862 in his name in contravention of the provisions of Section 23(2) of the Trade Marks Act, 1999, which Trade Mark ‘Toofan Mail’ in the name of the respondent is illegal and remains wrongly on the Register of Trade Marks and, as such, is liable to be rectified/removed, as the entry relating to the same is invalid. The appellant Parveen Kumar has filed a Rectification Petition under No. DEL 259515 as of dated 27.11.2008 before the Competent Authority for the rectification of the entry relating to the said Trade Mark No. 700862. (vi) The alleged copyright ‘Toofan Mail’ with the device of Train and photograph of an advertising Model is registered in the name of the appellant, Parveen Kumar and not in the name of the respondent, Kuldeep Chand Jain. The registration certificate produced by the plaintiff/respondent admittedly contains the name of the appellant Parveen Kumar as the owner of the artistic work Toofan Mail, registered under No. A-60730/2002 and all the rights comprising the Copyright vest in appellant Parveen Kumar only. The learned Trial Court ignored the mandatory provisions of Section 124 of the Trade Marks Act, 1999 that where rectification proceedings are pending before the competent authority, the suit proceedings are liable to be stayed. (vii) It was further submitted that under Section 20 of the Trade Marks Act, advertisement of the application has to be made in the prescribed manner. The procedure under Sections 20,21 and 22 has to be followed in the application so submitted for registration and thereafter under Section 23, the registration is to be granted to the applicant by the Registrar. In the instant case, any correction or amendment in the mark, if at all to be made, has to follow the same procedure, as is for the submission of the original application F.A.O. No. 3707 of 2009 8 for registration of a trade mark meaning thereby, that the learned trial Court has omitted to notice the mandatory provisions of the Trade Mark Act. It was further argued that since in the instant case, admittedly, application for registration had been submitted by the appellant as an applicant claiming to be the owner of the mark, if at all while granting registration, the Registrar was to include the name of the respondent/plaintiff as the owner of the mark, then it could be done so only if there was re-advertisement of the application for registration under Section 20(2) thereof. Once, no such re-advertisement had been done, then very grant of certificate of registration of the trade mark containing the name of the respondent/plaintiff was illegal and contrary to the provisions of the Trade Mark Act. (viii) It was further argued that under Section 34 of the Trade Mark Act, a prior user of a mark was always to be protected from any proceedings at the behest of any person even if he claims the proprietorship of the trade mark subsequently. In the instant case, admittedly in the year 1986, the appellant had been the proprietor of the trade mark as demonstrated by the plaintiff, himself. Therefore, the subsequent claim of the respondent/plaintiff against the appellant is not at all maintainable before the learned trial Court. It was also argued that the respondent/plaintiff claimed the assignment of registered copyright in the name of the appellant also in favour of the plaintiff. In this regard, the application for issuance of Copyright Certificate with respect to the artistic work “Toofan Mail with the device of Train and photograph of an advertising model” was granted to the appellant in the name of appellant Parveen Kumar, who thereafter submitted his application on 25.02.2001 for registration of the aforesaid copyright as F.A.O. No. 3707 of 2009 9 proprietor of M/s Phool Chand and Sons. On 13.02.2002, the copyright had been granted to the firm M/s Phool Chand and Sons, showing the appellant Parveen Kumar as proprietor and owner of the Copyright, as admittedly, a perusal of the certificate of copyrights, would reveal that appellant Parveen Kumar is the owner thereof. However, the pleadings of the suit claimed the assignment or the deemed assignment of the copyright of the appellant allegedly in favour of the plaintiff. In this regard, various provisions of the Copy right Act 1957 were cited and relied upon before the learned Trial Court by the appellant. It was argued that under Section 14, the meaning of Copyright had been given and under Section 17, the author of the work is to be the first owner of the Copyright. Section 18 deals with the provisions of assignment of a Copyright. However, Section 19 deals with the mode of assignment and specifically bars any assignment of copyright unless it was in writing and signed by the assignor. It was further stated that a true copy of the agreement dated 09.01.2004, which of course has been denied by the appellant, reveals that although the agreement talks about the trade mark, but it does not talk about the copyright to be assigned. Therefore, the agreement was expressly hit by the provisions of Section 19. After having heard the learned counsel for the parties and having gone through the documents placed on record, the following facts emerge :- a) That appellant/defendant, Parveen Kumar carried on business of blending, grading, packing and sales of tea etc. with effect from 01.09.1986 as proprietor of the concern under the name and style of M/s Phool Chand and Sons, which is evident from the partnership deed dated 20.12.1999 and Tarsem Lal son of Pyare Lal, Narinder Kumar and Sandeep Kumar sons of F.A.O. No. 3707 of 2009 10 Tarsem Lal and Kuldeep Chand joined as partnership with appellant/defendant, Parveen Kumar with effect from 20.12.1999. Partnership Deed is placed on record as Annexure P-15. b) Vide retirement deed dated 29.05.2000, Tarsem Lal son of Pyare Lal, Narinder Kumar and Sandeep Kumar sons of Tarsem Lal retired from the partnership of the firm M/s Phool Chand and Sons, which is obvious from the retirement deem dated 29.05.2000 placed on record as Annexure P-16. c) The continuing partners, appellant, Parveen Kumar and respondent Kuldeep Chand Jain joined Shri Ravi Jain son of Phool Chand and Sonu Jain son of Subhash Jain as partners of M/s Phool Chand and Sons on 29.05.2000 and continued the business of Tea mentioned in the Deed of Partnership dated 30.05.2000. d) The aforesaid partnership continued the business of Tea under the Trademark ‘Toofan Mail with the device of Train’, along with other Trade names. The appellant, Parveen Kumar, along with Ravi Kumar and Sonu Jain also retired from the partnership with effect from 31.03.2001. The plaintiff, Kuldeep Chand Jain, after settling the accounts took over all the assets and liabilities of the partnership M/s Phool Chand and Sons, including the aforesaid Trademark/Copyright. e) After 30.05.2000, Parveen Kumar, appellant never filed any return of M/s Phool Chand and Sons as proprietor, but he has been filing returns of M/s S.R. Traders. f) From the application (Annexure P-1), it is apparent that against Col. No. 2 (Name, address and nationality of the applicant), M/s Phool Chand and Sons, Nehru Mark, Jagraon (Punjab) has been mentioned. F.A.O. No. 3707 of 2009 11 Whereas against Col. No. 11- (i.e. Name, addresses and nationalities of the owners of various rights comprising the copyright in the work and the extent of rights held by each, together with particulars of assignments and licence, if any), it has been written that as in Col. 2 above although prop. is stated to be Shri Parveen Kumar. Meaning, thereby, that owner is Phool Chand and Sons and not any individual. g) An agreement dated 09.01.2004 was got entered into between the parties, where under it was declared that firm M/s Phool Chand and Sons along with its Trademark and copy right Toofan Mail with the device of Train along with Shere Punjab and Frontier Mail would continue to vest in the plaintiff, who solely shall be entitled to the use of aforesaid trademark and do business of Tea there under. The aforesaid agreement (P-14) was duly signed by the appellant, Parveen Kumar. h) In a family agreement dated 09.01.2004, it was also agreed between the parties that Parveen Kumar, appellant, herein, who has been carrying on retail business of tea leaves in Malerkotla will continue his such business at Malerkotla and will also continue to carry on business of tea leaves at Malaudh and Kup Mandies. It was also agreed that Parveen Kumar will sell sher-e-Panjab brand tea in retail after purchasing the same from Kuldeep Chand Jain. i) Parveen Kumar, appellant, who was earlier carrying on the business under the name and style of M/s S.R.Tea Traders, started the business under the new name and style of M/s R.G.S. Tea Company. j) On 16.04.2003, Parveen Kumar, as proprietor of M/s S.R.Tea Traders, wrote a letter to the Assessing Authority, Jagraon, for cancellation of F.A.O. No. 3707 of 2009 12 the Registration Certificate of Sales Tax No. 50839316 on the plea that M/s S.R.Tea Traders have closed the business permanently with effect from 31.03.2003. k) In the Trade Mark Journal, the trade mark Toofan Mail, advertised before acceptance under Section 20 (1) proviso, was also in the name of Parveen Kumar but trading as Phool Chand and Sons, Nehru Market, Jagraon. l) Similarly, Certificate of Registration of Trade Mark although issued in the name of Kuldeep Chand Jain, but trading as Phool Chand and Sons. The arguments raised by the learned counsel for the appellants is, therefore, paramount in view of the fact that the respondent, Kuldeep Chand Jain was only a partner and the certificate of Registration of Trade Mark was issued to Kuldeep Chand as partner of Phool Chand and Sons. Similarly, it is also apparent that the application has been filed although in the name of Parveen Kumar, but on behalf of Phool Chand and Sons and the Certificate of registration has been issued in the name of Phool Chand and Sons. Parveen Kumar, appellant and Kuldeep Chand Jain, respondent are only proprietors/partners of the firm M/s Phool Chand and Sons. Thus, it is evident that the application is on behalf of M/s Phool Chand and Sons and the Certificate of registration is also on behalf of M/s Phool Chand and Sons. Same would apply to grant of copyright. Secondly, the fact that Parveen Kumar had left the concern of M/s Phool Chand and Sons, is proved from the fact that the appellant/defendant, Parveen Kumar, started carrying on his business in the name of M/s S.R. Tea Traders and the Sale Tax No., 5089316 granted to the F.A.O. No. 3707 of 2009 13 proprietorship concern M/s Phool Chand and Sons was changed in the name of M/s S.R.Tea Traders. Thereafter, the appellant started the business of M/s R.G.S. Tea Co., which was his sole proprietorship firm. On 11.12.2008, Parveen Kumar through Shri D K Dhingra Advocate applied to Registrar of Copy Right to make changes in the existing register of Copy right from Phool Chand and Sons to M/s R.G.S. Tea Co. on the basis of a family settlement and on 05.01.2009, Shri D K Dhingra, Advocate for and on behalf of Parveen Kumar Proprietor M/s R.G.S. Tea Co., Geeta Colony, Jagraon applied for fresh registration of Trade Mark Toofan Mail with the device of Train. Reliance has been placed by the learned Counsel for the appellants on the various judgements rendered by other High Courts in the cases of ‘Nav Sahitya Prakash v. Anand Kumar-1981 (Allahabad) All 200, Hawkins Cookers Ltd. v. Magicook Appliance Co.- AIR 2003 (Delhi) 191, Brooke Bond India v. Sona Spices- 1991 PTC (Madras) 13, Sona Spcies v. Brooke Bond-1992 PTC 297 (DB), Rohit Dhawan v. G K Malhotra and another-2002 (24) PTC 474, Bhikusa Yamasa Kshatriya Pvt Ltd. v. Jagannath Bhikusa Kshatriya and others-AIR 1979 (Bombay) 302, Bawa Jagmohan Singh and others v. The Registrar of Trade Marks and others- 2002 (24) PTC 417 (Delhi), Gramophone Co v. Shanti Film- A 1997 (Cal.) 63, K A Venugopala Shetty v. Dr. Suryakanta U Kamath-A 1992 (Karn.) 1 (DB), Susiah v. S Muniswamy- A 1966 (Madras) 175, basically to prove that under the various provisions of Copyright Act, the appellant, Parveen Kumar, is the owner of the Copyright, and not Phool Chand. The appellant may or may not have anything to do with Phool Chand, but so long as the particulars of the ownership are not amended or rectified in column 11, the appellant F.A.O. No. 3707 of 2009 14 Parveen Kumar alone would be and is the actual owner thereof. The judgements referred by the learned counsel for the appellants would not be applicable in the facts and circumstances of the present case, wherein a family agreement dated 09.01.2004 has been entered into between Parveen Kumar and Kuldeep Chand Jain and the conduct of the parties as mentioned shows that the same was duly acted upon by them. Moreover, as observed above, the grant of copyright and Certificate of registration of Trademark is actually in the name of M/s Phool Chand and Sons and both of them were partners of the said firm at one point of time. From the entire facts and discussion made above, it is apparent that the parties are real brothers. They had other brothers also. There was a dispute with respect to the property and business, which was resolved amicably between the parties through an agreement dated 09.01.2004 (P-14) with the following understanding:- i) That the Trade Marks, Sher-e-Panjab, Toofan Mail and Frontier Mail shall belong to the respondent, Kuldeep Chand Jain Prop./owner of M/s Phool Chand and sons; ii) That Parveen Kumar, appellant, and other brothers can do trading in tea in retail after purchasing the same from Kuldeep Chand Jain in different markets. As per the agreement, even the markets were defined under which the parties could carry on their business. The factum of Parveen Kumar son of Phool Chand, trading as M/s R.G.S. Tea Co. Jagraon is