Bhagwan Dass Khanna Jewellers v. Bhagwan Das Khanna Jewellers Pvt. Ltd.

MANMOHAN SINGH, J.

1. By this order, I propose to decide the pending interim application being I.A No. 6779/2008 filed by the plaintiff under order xxxix, rules 1 & 2 read with section 151 cpc. The plaintiff has filed the suit for permanent injunction restraining infringement of as well as dilution of trademarks, delivery up, rendition of accounts of profits, damages etc.

2. The case of the plaintiff is that M/s Bhagwan Dass Khanna Jewellers is a partnership firm registered in the year 1992. The said firm has been carrying on business as a running partnership since the year 1963. Mr. Bhagwan Dass Khanna had six sons, namely Mr. Ramesh Dass Khanna, Mr. Shankar Lal Khanna, Mr. Mahesh Dass Khanna, Mr. Naresh Dass Khanna, Mr. Rajesh Dass Khanna and Mr. Ganesh Dass Khanna.

3. In the year 1963, Mr. Bhagwan Dass Khanna along with Mr. Ramesh Dass Khanna started the jewellery business and later on, Mr. Mahesh Dass Khanna, Mr. Naresh Dass Khanna and Mr. Ganesh Dass Khanna also joined the said business. In the year 1992, a partnership firm was incorporated in the name of “M/S BHAGWAN DASS KHANNA JEWELLERS” to conduct the said jewellery business comprised of partners namely Mr. Bhagwan Dass Khanna, Mr. Ramesh Dass Khanna, Mr. Mahesh Dass Khanna, Mr. Naresh Dass Khanna and Mr. Ganesh Dass Khanna as partners. It is stated that Mr. Shankar Lal Khanna was never the partner of the said partnership of the plaintiff, nor the part of the plaintiff's jewellery business.

4. Mr. Bhagwan Dass Khanna expired in the year 1999. As the partnership business was at will, the above said business was continued and a fresh partnership deed dated 23rd October, 1999 was executed by the partners. They have been engaged in the business of manufacture and sale of gold and diamond jewellery and related articles like precious/semi-precious stones etc. since the year 1963. The plaintiff owns a showroom located at G-17, South Extension Market, Part-I, New Delhi-110049 and apart from the sale and manufacture of gold and diamond jewellery, is also engaged in the export of jewellery items and has participated in various Gold Jewellery Exhibitions overseas.

4.1 The plaintiff's name “Bhagwan Dass Khanna” and “BDK”, either used individually or in conjunction with each other have become distinctive and well known in the jewellery business markets and have earned substantial reputation and goodwill in the jewellery business market with which it has been associated for over a period of 45 years who have also incurred a substantial amount on advertising and promoting their jewellery business and other related activities year after year.

4.2 The plaintiff is the registered proprietor of the abovementioned trademarks. The plaintiff's registrations for the said marks are in Class 14, for the word mark “BDK Bhagwan Dass Khanna” bearing registration No. 1166569, for the mark “BDK” along with the accompanying device bearing registration No. 1166570, and for the word mark “BDK” bearing registration No. 1166568. The abovementioned marks were registered in the name of the plaintiff claiming user since the year 1963.

4.3 It is alleged that the said trademarks have become extremely prominent and well known in the jewellery business market and are exclusively identified and recognized by the purchasing public as relating to the high quality goods and services of the plaintiff and the plaintiff alone.

5. The case set up by the plaintiff against the defendants is that defendant No. 1 “BHAGAWAN DAS KHANNA JEWELLERS PRIVATE LIMITED” having its registered office at E-91, South Extension, Part-I, New Delhi and also trading at M-2, M-Block Market, Greater Kailash-I, New Delhi is a company incorporated under the Indian Companies Act, 1956 and is engaged in the business of manufacture and sale of jewellery and related articles. The defendants are using the said trade name which is deceptively similar to the plaintiff's registered trade mark “BHAGWAN DASS KHANNA” for a similar business activity i.e jewellery business. Defendant No. 2, Mr. Deepak Khanna and defendant No. 3 Ms. Deepti Khanna are the Directors of defendant No. 1.

6. It came to the notice of the plaintiff in the month of September, 2007 when they received information from credible market sources that a company by the name of “BHAGWAN DAS KHANNA JEWELLERS PVT. LTD.” was carrying on jewellery business at M-2, M-Block Market, Greater Kailash-I, New Delhi. The plaintiff then conducted an online search through the website of the Ministry of Company Affairs and found out that the defendants were indeed a company incorporated under the Indian Companies Act, 1956 on 24th April, 2007.

6.1 In order to ascertain if the defendants were indeed involved in such infringing activity, the plaintiff made further enquiries as regards the activities of the defendants and obtained information that the defendants had been formerly conducting their jewellery business under the name of “B.D KHANNA JEWELLERS” and in the month of September, 2007 had changed their name to “BHAGWAN DAS KHANNA JEWELLERS PRIVATE LIMITED” which is deceptively similar to the plaintiff's registered trademark.

6.2 The defendants No. 2 & 3 are the son and daughter-in-law of one Mr. Shankar Lal Khanna. Mr. Shankar Lal Khanna is the own brother of the proprietors of the plaintiff firm “M/S BHAWAN DASS KHANNA JEWELLERS”. Mr. Shankar Lal Khanna took up a job with the Government of India and he had never participated in the said jewellery business as run by his brothers.

6.3 Mr. Shankar Lal Khanna was neither a part of the said jewellery business of the plaintiff firm nor the defendant No. 2, Mr. Deepak Khanna who is the son of Mr. Shankar Lal Khanna, however, started his own independent jewellery business and opened a showroom by the name of “B.D KHANNA JEWELLERS” at E-91, South Extension Part-I, New Delhi sometime in October, 2006. The business card of the defendants depicting use of the name “B.D KHANNA JEWELLERS” in original has been filed in the present proceedings. But in the month of September, 2007, the defendants without any justification and clearly with an intention to cash upon the reputation and goodwill of the plaintiff changed their name from “B.D KHANNA JEWELLERS” to “BHAGWAN DAS KHANNA JEWELLERS PRIVATE LIMITED” and opened a jewellery showroom at M-2, M-Block Market, Greater Kailash-I, New Delhi. The defendants also hosted an inauguration ceremony for the opening of their said showroom under their new name. They have also been circulating new business cards under their new name i.e “BHAGWAN DAS KHANNA JEWELLERS (P) LTD.” and have started using the said new name with a malafide intention so as to give an impression to the general public that their jewellery business is somehow connection with or affiliated to the plaintiff's business activities.

6.4 A perusal of the business card of the defendants clearly shows that the defendants have also copied the trade mark “BDK” of the plaintiff and are boldly displaying the same on the said card. Moreover, in order to further verify the infringing activities of the defendants, the plaintiff then directed one of its representatives to execute the purchase of a jewellery item from the defendants' showroom located at Greater Kailash, New Delhi. The plaintiff's representative then executed the purchase of a diamond ring from the defendants' showroom and was issued a retail invoice for the same. The said retail invoice was issued on the letter-head of “BHAGWAN DAS KHANNA JEWELLERS (P) LTD.”

6.5 The plaintiff avers that the defendants' identical use of the plaintiff's trade mark “BDK” and deceptively similar use of the plaintiff's trademark/trade name “BHAGWAN DASS KHANNA JEWELLERS” has clearly been done with a malafide intention to ride on the coattails of the plaintiff's reputation and goodwill in the jewellery business market. The plaintiff further submits that the defendants' identical and deceptively similar use of the plaintiff's trademarks i.e “BDK” and “BHAGWAN DAS KHANNA JEWELLERS” respectively are both visually and phonetically similar to the plaintiff's registered trademarks. Moreover, the act of the defendants in changing their name from “B.D KHANNA JEWELLERS” to “BHAGWAN DAS KHANNA JEWELLERS (P) LTD.” without any justification clearly with malafide intentions of the defendants to somehow pass off their goods and services as those of the plaintiff or somehow connected with the plaintiff.

6.6 The plaintiff states that the defendants' act of malafidely adopting a deceptively similar version of the trade mark “BHAGWAN DASS KHANNA” and the identical use of the trademark “BDK” of the plaintiff as a part of their trading name/style and business activities is a clear attempt to pass off their business/trading activities as those having some sort of connection/association/affiliation with those of the plaintiff or having been authorized by the plaintiff in some manner. The said acts of the defendants are bound to create confusion in the minds of the consumers and they would be deceived into buying the products of the defendants and accepting the services of the defendants on the assumption that the defendants are somehow connected with the plaintiff.

7. Defendants' Case:

a) That the plaintiff cannot have any exclusive right on the goodwill of the name Bhagwan Dass Khanna or claim or have exclusive right to the enjoyment and user of the Trade Mark and other assets of the erstwhile firm for business.

b) It is submitted that late Sh. Bhagwan Dass Khanna started the business of jewellery in the name and style of M/s. Bhagwan Dass Khanna Jewellers since about 1937. Sh. Bhagwan Dass Khanna after commencing the business in the year 1937 took premises on rent in or about 1950 at 1671, Dariba Kalan, Chandni Chowk, Delhi and carried out the business from the said premises as a Proprietor of M/s Bhagwan Dass Khanna Jewellers. Sh. Bhagwan Dass Khanna over a period of time, i.e from the year 1937, has an established name, reputation and goodwill of M/s Bhagwan Dass Khanna Jewellers.

c) Subsequently, a partnership firm was constituted vide partnership deed dated 25 April, 1985 in which Sh. Bhagwan Dass Khanna was to manage, supervise and control the partnership affairs, M/s Bhagwan Dass Khanna Jewellers carried on its business from 1671, Dariba Kalan, Chandni Chowk, Delhi and G-17, N.D.S.E, Part-I, New Delhi. However, Sh. Bhagwan Dass Khanna continued to own the reputation, goodwill built by him over a period of 35-40 years which goodwill was never merged in the partnership firm.

d) The said Sh. Bhagwan Dass Khanna died intestate on 21st October, 1999. Prior to his death since 1995 he was suffering from old CVA cerebral hemorrhage with residual Rt Hemepare's and Parkinson disease and was incapable and his mental faculties were seriously and adversely impaired. He was admitted in Aashlok Hospital, Safdarjung Enclave on several occasions from 1995 till his death and as per medical opinion obtained and the record available with Aashlok Hospital, Sh. Bhagwan Dass Khanna was not in a position to understand about the existence or execution or contents of any documents.

e) Even otherwise at the time of his death he was aged about 85 years and the patient suffering from such diseases, his mental capacity to think is reduced to zero as the brain cells of an old person suffering from such diseases become totally redundant, ineffective and during the said period when he was suffering from the various ailments, he was not even in a position to sign, understand and or execute any documents and or even recognize his own family members. He was totally confined to the bed since 1995 as apart from the disease of Parkinson he had suffered a complete paralysis of left portion.

f) Taking advantage of serious ailments, incapacitating and adverse mental and physical condition of Sh. Bhagwan Dass Khanna, his four sons Sh. Ramesh Dass Khanna, Sh. Mahesh Dass Khanna, Sh. Naresh Dass Khanna and Sh. Ganesh Dass Khanna presumably procured and/or affixed his thumb impression on the purported partnership deed dated 1 April, 1997 of which the validity, legality and efficacy is highly suspected and is disputed.

g) His share was reduced to nominal 4% in the purported partnership dated 1 April, 1997 which was at will and provided for a right to all the partners to maintain account in the name of the firm and to operate the account jointly. The said partnership deed also contained a clause that in the event of dissolution of the partnership, the partnership shall be wound up and assets and liabilities shall be dealt with as per partnership deed. After the death of Sh. Bhagwan Dass Khanna, the partnership which stood automatically dissolved by agreement as well as by law, necessitating winding up of the firm and vesting of entire rights, entitlement and share of the deceased in all assets etc. amongst all the heirs including Sh. Shanker Lal Khanna, father of defendant No. 1 and father-in-law of defendant No. 3 as he is the brother of the partners of the plaintiff's firm.

8. The plaintiff firm which is run by four sons of Late Sh. Bhagwan Dass Khanna who are partners of the firm, are wrongfully and illegally using the assets of the erstwhile firm and usurped to themselves the share, right, title and interest including goodwill etc. that have also devolved on Sh. Shanker Lal Khanna and his family members. In law, firm had to wind up and all its assets sold and dealt with as per provisions of the partnership act, deceased's share distributed amongst all his legal heirs. The suit, therefore, is not maintainable.

The plaintiff firm cannot claim any right in the Trade Mark/goodwill nor can institute any suit and the plaintiff has no right to object the use by the defendants of their corporate name viz. defendant No. 1 which has been granted by the competent authority under the relevant provisions of the companies act and in law is entitled to carry on business in its corporate name.

9. There are other companies also registered with the name Bhagwan Dass Khanna and Co. with Registrar of Companies. The defendant No. 1 was registered with no intentions to deceive anyone and corporate name being used by defendant No. 2 and 3 is not the description of any article. The articles of jewellery sold by the defendants are not sold by the name of defendants and defendants have its own designs and manufacturers.

10. The defendant No. 1 was incorporated and registered as a company under the Companies Act, 1956 in April, 2007. The partners are closely related to Sh. Deepak Khanna who himself has been associated with other concerns like “Jass Jewellers Silver Room” and “Jass Jewellers Gold Room” as a partner with sons of such partners. The plaintiff was aware of the business and activities of the defendants and is guilty of laches and delay apart from having no right to maintain the suit or seek any reliefs sought in these proceedings. It is also alleged that the Director of defendant No. 1 Sh. Deepak Khanna had sent invitation cards to all uncles when he commenced his business of jewellery in the name and style of Bhagwan Dass Khanna Jewellers Pvt. Ltd. at Greater Kailash, Part-I, New Delhi. All the partners and their sons and other family members were in constant touch with each others. The suit was filed after the expiry of one year and hence, the plaintiff is not entitled to interim relief claimed for even on account of delay and latches.

11. There is also no chance of any confusion as the customers and the clients who are purchasing the jewellery are educated and rich people and the defendant No. 1 is carrying on the business in a different market with a different name. The plaintiff also deals with kundan and gold jewellery and the defendants mainly deal with precious stones and diamond jewellery. The customers normally come with personal contacts and not with names on the sign boards and there is no brand name in the jewellery being sold by the defendants. The defendants are using only the corporate name in the memory of their grand-father with the consent of their father. Use of name of the Head of the family by different members of the family for purposes of their individual business is not uncommon and is well accepted and there is a clear bonafide on the part of the Directors to use and adopt the said name as no exclusive rights are permissible or even given to the plaintiff. the intentions of the defendants are bonafide.

12. The suit is liable to be stayed under section 10 of cpc. The issue whether the goodwill exclusively belongs to the plaintiff and/or other heirs have rights in the goodwill is the subject matter of earlier suit, as filed by Sh. S.L Khanna against Sh. Ramesh Dass Khanna, Sh. Mahesh Dass Khanna, Sh. Ganesh Dass Khanna and Sh. Rajesh Dass Khanna, pending in this Court. The issue in both the cases is identical. Therefore, the suit is liable to be stayed.

13. In the replication, the plaintiff has given the details of partnership executed between the partners from time to time from beginning of the business. The details given are read as under:

(i) The first partnership deed was executed on 4 April, 1974 between Mr. Bhagwan Dass Khanna and his sons Mr. Ramesh Dass Khanna, Mr. Mahesh Dass Khanna, Mr. Naresh Dass Khanna, Mr. Rajesh Dass Khanna and Mr. Ganesh Dass Khanna. Thereafter, Rajesh Dass Khanna retired from the partnership firm with effect from 31 March, 1985 pursuant to which a dissolution deed dated 31 March, 1985 was executed between the parties.

Subsequently, the partnership was then reconstituted pursuant to which a fresh partnership deed was executed on 24 April, 1985 between Mr. Bhagwan Dass Khanna and his sons Mr. Ramesh Dass Khanna, Mr. Mahesh Dass Khanna, Mr. Naresh Dass Khanna and Mr. Ganesh Dass Khanna.

(ii) Prior to Mr. Bhagwan Dass Khanna's death in 1999, another partnership deed dated 1 April, 1997 was executed wherein the shares of the erstwhile partners of the plaintiff firm were rearranged. After the death of Mr. Bhagwan Dass Khanna, a fresh partnership deed was executed between Mr. Ramesh Dass Khanna, Mr. Mahesh Dass Khanna, Mr. Naresh Dass Khanna and Mr. Ganesh Dass Khanna on 23 October, 1999. As per Clause 18 of the said partnership deed, the goodwill of the firm would not be considered for the purposes of determining of the interest of the deceased partner.

In fact, in all the partnership deed as mentioned above, there is a specific provisions stating that goodwill of the firm shall not be considered for the purpose of determining the interest of a retiring or a deceased partner and that the retiring partner shall have no claim to the goodwill of the firm.

14. The plaintiff has specifically denied in the replication that prior to his death in 1999, Mr. Bhagwan Dass Khanna was not in control of his mental faculties so much so that his four sons (Mr. Ramesh Dass Khanna, Mr. Mahesh Dass Khanna, Mr. Naresh Dass Khanna and Mr. Ganesh Dass Khanna) procured and/or affixed his thumb impression on the partnership deed dated 1 April, 1997, however it is not denied that Mr. Bhagwan Dass Khanna did suffer a paralytic attack in the year 1995.

15. It is alleged that after the death of Mr. Bhagwan Dass Khanna, the remaining partners agreed to continue the partnership firm. Moreover, the said partnership has been continued “at Will” between the partners. Under Section 43 of the Partnership Act, 1932, where the partnership is at will, the firm may only be dissolved by any partner giving notice in writing to all other partners of his intention to dissolve the firm. It was stated that no such notice was given by any of the remaining partners to dissolve the partnership firm. Moreover, as per the terms and conditions of the partnership deed dated 23 October, 1999, goodwill, if any, of the firm shall not be considered for determining the interest of the deceased partner, thereby by written contract and implying that no goodwill would be carried out of the firm upon the death of any partner. Moreover, previous partnership deeds of 1974 and 1985 also state that a retiring partner shall have no claim to the goodwill of the firm.

As far as Mr. Shankar Lal Khanna is concerned, it is submitted that the same including his family members have no right whatsoever over the plaintiff's firm or the trademarks as owned by the firm. The trademarks certificates as issued in favour of the plaintiff as well as the partnership deed dated 23 October, 1999 have already been filed in the present proceedings and may be kindly referred to.

16. It is argued by the plaintiff that the present suit filed is well within the limitation period as prescribed under Article 113 of the Limitation Act, 1963 which provides for a period of 3 years for filing the present suit. It is further submitted that in September 2007, the plaintiff received information that the defendants had started a business under the name and style of ‘Bhagwan Dass Khanna Private Limited’ and subsequently, the present suit was filed on 27 May, 2008.

With regard to deception, it is alleged that there is not only a likelihood of confusion, but there are various instances of confusion wherein the purchasing public has been deceived due to the similarity in names of the plaintiff firm and the defendant No. 1-company. The state of confusion is such that besides general public, specialized agencies such as courier companies, banking organizations as well as the IT Department itself gets confused with the said names.

As far as the Civil Suit bearing No. 2315/2007 is concerned, it was submitted that the said suit is with respect to the declaration of cancellation of Gift Deed dated 17 May, 1999 and the present suit is with respect to the infringement of the registered trademarks of the plaintiff and that there is no connection whatsoever between the two.

17. The matter was listed before the Court from time to time for hearing of the interim application. It has been noticed by this Court that both parties had taken adjournments either to argue the pending applications or to settle the matter. Since, as informed by the plaintiff, settlement was not possible, Mr. Parvin Anand, learned counsel appearing on behalf of the plaintiff addressed his submissions on 27 April, 2012 as well as on 15 May, 2012. The matter was kept for arguments on behalf of the defendants for 24 May, 2012.

Later on, the roster was changed and the matter was again sent before me being a part heard matter. The same was taken up on 7 September, 2012. As no one appeared on behalf of the defendants, the matter was adjourned to 19 October, 2012. On said date, no one addressed arguments on behalf of the defendants, nor any counsel on their behalf had appeared before the Court. The order was reserved in the interim application. The defendants were granted two weeks time to file the written submissions.

On 2nd November, 2012 the matter was mentioned by Mr. Ashok Chhabra, learned counsel appearing on behalf of the defendants seeking liberty to move an application for hearing arguments as well as to file the written submissions. In the interest of justice, equity and fair play, the oral request of the defendants' counsel was accepted and the matter was kept for hearing on 9 November, 2012 on behalf of the defendants.

18. Mr. Sudhir Chandra, learned Senior counsel appearing on behalf of the defendants made his submissions on 9 November, 2012 and 16 November, 2012. No rejoinder arguments was addressed by the plaintiff, however, time was sought to file only the written submissions.

19. Mr. Anand has made his submissions earlier which can be outlined in the following manner:

• Mr. Anand argued that the present case is clear infringement of the plaintiff's registered trade mark BDK and BHAGWAN DASS KHANNA JEWELLERS. It has been argued that the defendants are using the said trade mark, which belongs to the partnership, without the permission of the plaintiff and thus, cause infringement of the trade mark of the plaintiff.

• Mr. Anand argued that the defendant is deriving some aid on the strength that some permission is obtained from Mr. Shankal Lal Khanna. The said person was never the part of the partnership and was also not into the business of jewelleries at all. Therefore, the incorporation of the company by the relatives of the Mr. Shankar Lal Khanna is totally mischievous and for the plaintiff the defendant is a third party who is infringing the trade mark of the plaintiff and no aid can be drawn whatsoever from anything which may be due to Shankar Lal Khanna as the said person is not within the right to give any such permission to the defendant.

• Mr. Anand argued that the adoption of the mark BHAGWAN DASS KHANNA by the defendant in the part of the trade name and trade mark of the plaintiff is dishonest in as much as the defendants were earlier trading under the different trade name and eventually in order to encash the goodwill and reputation of the mark BHAGWAN DASS KHANNA of the plaintiff, the defendants have consciously adopted the trade mark and trade name to take unfair advantage of the said mark.

• Mr. Anand argued that the partnership of the plaintiff has always been partnership at will. The surviving partners decided to continue to do the business under the said partnership after the death of Sh. Bhagwan Dass Khanna. There has always been a stipulation under the deed of the partnership deeds entered into from time to time that the plaintiff firm shall not part with the goodwill of the firm. Under these circumstances, the justification given by the defendants that they are entitled to goodwill and therefore entitled to use the trade name should not be accepted by the court and should be rejected.

By making the aforenoted submissions, Mr. Anand prayed that this court should pass interim injunction against the defendants as per the prayers made in I.A No. 6779/2008.

20. Per Contra, Mr. Sudhir Chandra, learned Senior counsel appearing on behalf of the defendants has made his submissions as well as referred various paras of the written statement and the clauses of the partnership deeds filed by the plaintiff, which can be outlined as under:

a) Mr. Chandra firstly explained that how Sh. Bhagwan Dass Khanna started his business of jewellery in the shop taken on rent by him in Dariba Kalan, Delhi in the year 1937. Mr. Chandra argued that Sh. Bhagwan Dass Khanna was extremely careful about the goodwill of the firm and made it clear that he could expel any of his sons from the partnership and they would have no right or claim on the goodwill of the firm. The said term was also incorporated in the partnership deed executed between Sh. Bhagwan Dass Khanna and his sons in the year 1985. In the year 1995 Sh. Bhagwan Dass Khanna had suffered a paralytic stroke and he was also suffering from old CVA cerebral hemorrhage and also developed Parkinson disease, as a result of which he became completely incapacitate and was admitted to Aashlok Hospital on several occasions. He was at the age of 82 years.

b) Mr. Chandra argued that Sh. Ramesh Dass Khanna, Sh. Mahesh Dass Khanna, Sh. Ganesh Dass Khanna and Sh. Naresh Dass Khanna, his sons forged a partnership deed in the year 1997 wherein they reduced the share of Sh. Bhagwan Dass Khanna from 20% to 4% and also obtained his smudged thumb impression. The genuineness of the deed is also challenged by Sh. Shankar Lal Khanna in his suit bearing No. 2315/2007 filed by two of the sons of Sh. Bhagwan Dass Khanna including Sh. Shankar Lal Khanna.

c) His next submission is that Sh. Bhagwan Dass Khanna died on 21 October, 1999 and a partnership deed dated 23 October, 1999 came into existence recording that in accordance with the terms of the said partnership deed and decision of all the partners, the partnership firm has continued. However, in Form A before the Registrar of Firms maintained under Section 59 of the Partnership Act, 1932, Sh. Bhagwan Dass Khanna was noted to have retired on 21 October, 1999 (due to death). His argument is that the goodwill of Sh. Bhagwan Dass Khanna was his personal asset which was earned by him working hard for the last 40 years when the first partnership in 1974 was created. The goodwill became asset even before 1974 which was never parted with by Sh. Bhagwan Dass Khanna as it appears from the partnership deeds of 1974 and 1985 that no retiring partner would be entitled to goodwill and that a complete control of partnership would rest in Sh. Bhagwan Dass Khanna.

d) Mr. Chandra has also referred various clauses of the said partnership deed, particularly, clauses 8, 9 & 10. In nut-shell, his argument is that Sh. Bhagwan Dass Khanna never had any intention to part with the goodwill or reputation with either of the partners. He was worried about the same. Now, the remaining sons who are also the partners of the plaintiff firm have taken the full advantage of his disease and got the fresh partnership deed in the year 1997 wherein they reduced the share of Sh. Bhagwan Dass Khanna from 20% to 4% and his smudged thumb impression was taken. Had he been conscious in his mind, he ought not to put the condition mentioned in the clauses of the said partnership deed. The purported 1997 partnership deed is fraudulent and forged. Therefore, the evidence in this regard is necessary to be recorded before passing any order in the interim application.

e) Learned Senior counsel further submits that since no ex parte interim order was granted in the matter, therefore, at the maximum this Court should expedite the trial but not to issue the interim order on the application. He submits that admittedly, late Sh. Bhagwan Dass Khanna had a share of 20% by virtue of deed of partnership of 1975. The goodwill belonged entirely to him and part of the goodwill was inherited by all his heirs including Sh. Shankar Lal Khanna, father of defendant No. 2 who carries on his business with his permission. Being a part of the goodwill, the defendants cannot be restrained by means of an injunction and they are entitled to use the corporate name. The father of defendant No. 2, Shankar Lal Khanna and his family have interest, right, title and share in the partnership including the goodwill and trade name and other assets and estate of deceased Sh. Bhagwan Dass Khanna. Therefore, the plaintiff cannot claim the monopoly rights in the use of the said name.

f) Mr. Chandra heavily relied upon the decision of the Supreme Court reported in (1970) 1 SCC 415, Khushal Khemgar Shah v. Mrs. Khorshed Banu Dadiba Boatwalla, relevant paras 5 & 6 thereof read as under:-

“5. Our attention was invited to Hunter v. Dowling, (1895) 2 Chd 223; Smith v. Nelson, 96 Law Times Reports 313; and Bachubai and L.A Watkins v. Shamji Jadowji, ILR 9 Bom 536. The first two cases proceeded upon the interpretation of certain clauses in partnership agreements. It was inferred in those cases from the terms of the agreement that the right in the goodwill of a partner in a firm dying or retiring shall not survive to his legal representatives. Bachubai and L.A Watkin's case (supra) arose out of a case in which in the partnership agreement it was provided that the firm shall be the agents of a company carrying on business as a manufacturer of cotton textiles so long as the firm carries on business in Bombay, or until the firm should resign. The firm were appointed the agents of the Company and continued to act as agents. One of the partners died, and a representative of the partner filed a suit, claiming a certain share in the assets of the firm including the goodwill. It was observed by Sargent, C.J, in rejecting the claim of the plaintiff to a share in the goodwill of the business as an asset of the firm, that:

“Assuming (which may well be doubted) that the term “goodwill” is applicable to a business of this nature, it is plain that it is attached to the name of the firm which, by the partnership agreement itself is to be used by the surviving partners, or partner for their own benefit. Such an arrangement between the partners must take away all value from the goodwill; even if it be not, - as Mr. Justice Lindley in his Treatise on Partnership, p. 887, (3 ed.), considers it to be - inconsistent with its being an asset at all.”

The learned Chief Justice expressed a doubt-presumably relying upon old English decisions - that the goodwill of a firm may not be an asset at all. These observations do not set out any rule, of interpretation of a deed of partnership. But the question is now settled by statutory enactment. Under the Partnership Act, 1932, it is expressly declared that the goodwill of a business is an asset. Whether the goodwill has any substantial value may be determined on the facts of each case.

6. We are unable to agree with Mr. Nariman that in interpreting a deed of partnership, business whereof it is stipulated shall be continued by the surviving partners after the death of a partner, the Court will not award to the legal representatives of the deceased partner a share in the goodwill in the absence of an express stipulation to the contrary. The goodwill of a firm is an asset. In interpreting the deed of partnership, the Court will insist upon some indication that the right to a share in the assets is, by virtue of the agreement that the surviving partners are entitled to carry on the business on the death of the partner, to be extinguished. In the absence of a provision expressly made or clearly implied, the normal rule that the share of a partner in the assets devolves upon his legal representatives will apply to the goodwill as well as to other assets.”

By placing reliance upon the aforementioned decision of the Supreme Court, it has been argued that the defendant Nos. 2 and 3 are son and daughter-in-law of Shri Shankar Lal Khanna, to whom the right to goodwill cannot be deprived of. Therefore, the use of the said name Bhagwan Dass Khanna by the defendants cannot be faulted with as the defendants are deriving the permission from Shri Shankar Lal Khanna. It is alleged that under the various provisions of the partnership act and in law Sh. Shanker Lal Khanna and his family have interest in the share, right, title of deceased Sh. Bhagwan Dass Khanna in the partnership including goodwill and trade name and his other assets and estate and the plaintiff and the plaintiff cannot claim monopoly rights in the use of name.

21. The last submission of Mr. Chandra is that since Sh. Bhagwan Dass Khanna was the prior and first user of the mark in question and he died intestate and both the defendant No. 2 and his father are his legal heirs, the defendants cannot be restrained by means of an injunction. Further, the plaintiff is guilty of concealing of material facts from this Court by not disclosing the fact that Sh. Bhagwan Dass Khanna was using the name since 1937 as a sole proprietor.

The present suit has been filed as a counter-blast to the suit filed by the father of defendant No. 2 on 5 November, 2007 by which his father and other brothers are claiming their rights on the estate of Sh. Bhagwan Dass Khanna. The suit was also filed for rendition of accounts for all the movable properties, jewellery and goodwill which has been grabbed by the partners of the plaintiff firm.

22. I have gone through the plaint, written statement, applications and the documents filed by the parties. I have also given my careful consideration to the submissions advanced by the learned counsel for the parties across the bar. I shall now proceed to discuss the legal position in the light of the submissions advanced by the parties.

23. Scanned copies of two visiting cards and the photographs of the display boards used by the parties are shown as under:-

Plaintiff's display board and visiting card

Defendants' display board and visiting card

24. The question which arises for consideration in the instant case is as to what happens to the affairs of the partnership business in the event of death of the partner and what is the share or entitlement of the outgoing partner or his legal heirs pursuant to the death of the partner as per partnership act in the event of continuation of the business by the surviving partners in the partnership. I think the said question is necessarily required to be answered as the entire case of the defendants is that they are deriving some authority or permission from Sh. Shankar Lal Khanna who is the legal heir of Bhagwan Dass Khanna, who died intestate.

25. It needs no reiteration that the relation between the partners in the partnership is contractual one and is governed by the Partnership Act 1932. The said principle is itself recognized by the Partnership Act in the Section 42 of the Indian Partnership Act, 1932.

26. In the context of consequences on account of happening of contingency like the death of the partner, Section 42 of the Act provides for the dissolution which reads as under:

“Section 42.— Dissolution on the happening of certain contingencies: Subject to contract between the partners a firm is dissolved-

(a) if constituted for a fixed term, by the expiry of that term;

(b) if constituted to carry out one or more adventures or undertakings, by the completion thereof;

(c) by the death of a partner; and

(d) by the adjudication of a partner as an insolvent.”

27. A bare reading of the said section makes it evident that subject to the contract between the partners a firm is dissolved by the death of a partner. All this would mean that the partners amongst themselves decide by way of covenant in the partnership deed that firm shall not dissolved in the event of death of a partner and in such eventuality the firm shall not be dissolved and continue to do business. Ordinarily in the absence of contract to the contrary in the partnership or agreement between the partners, the firm will be dissolved upon death of a partner.

28. Once it is clear that the subject to the contract between the partners, the firm shall be dissolved in the event of the death of the partner. Applying the said principle to the instant case, it can be said that there was no provision under the partnership deed dated 23 October, 1999 with regard to consequences as to what will happen on the death of the partner. But there is certainly a provision in the form of clause 6 which provides that the said partnership shall be partnership at will.

29. If one sees the partnership deed dated 23 October, 1999 the surviving partners in the partnership had exercised their will to continue to run the partnership by entering into fresh partnership. The said deed was entered into on 23 October 1999 which is two days after the death of Shri Bhagwan Dass Khanna. Therefore, the surviving partners have reconstituted the firm after the death of one of the partners with the consensus between them.

30. Now, then the question remains what shall happen to share of the deceased partner or his legal representative when the surviving partners continue with their business in the firm. Section 37 of the Act provides for such an eventuality and in this respect recognizes the right of outgoing partner or the deceased partner or his legal representative. Section 37 reads as under:

“Right of outgoing partner in certain cases to share subsequent profits. Where any member of a firm has died or otherwise ceased to be a partner, and the surviving or continuing partners carry on the business of the firm with the property of the firm without any final settlement of accounts as between them and the outgoing partner or his estate, then, in the absence of a contract to the contrary, the outgoing partner or his estate is entitled at the option of himself or his representatives to such share of the profits made since he ceased to be a partner as may be attributable to the use of his share of the property of the firm or to interest at the rate of six per cent. per annum on the amount of his share in the property of the firm:

Provided that where by contract between the partners an option is given to surviving or continuing partners to purchase the interest of a deceased or outgoing partner, and that option is duly exercised, the estate of the deceased partner, or the outgoing partner or his estate, as the case may be, is not entitled to any further or other share of profits; but if any partner assuming to act in exercise of the option does not in all material respects comply with the terms thereof, he is liable to account under the foregoing provisions of this section.”

31. From the bare reading of Section 37, it is manifest that the said section provides that the whenever there is a death of a partner (as it uses the expression death of a member of firm or otherwise ceases to be a partner and thereafter uses the words “surviving partners”) and the surviving partners carry on the business of the firm without settling the accounts of the outgoing partner or the representatives, the said estate of the partner or his representative has the option either a share of profit “since he ceased to be a partner” made as per his share in the property of the firm or six percent of interest of his share of the property of the firm.

32. All this would mean that there is a clear eventuality prescribed in the form of Section 37 of the Act of 1932 where under the legal representative of the deceased partners has the option to share the profit or the interest which are all in the form of money. The proviso appended to Section 37 would not be applicable as there is no provision under the deed where the option is given to the legal representative to purchase the share of the deceased partner and enter into the partnership. There is no provision under the partnership deed to the contrary, therefore as per the provisions of Partnership Act, the entitlement of the legal representative of the deceased partner shall be confined to the payment of the commensurate share of the profit as the mode prescribed under Section 37 of the Act.

33. Mr. Chandra, learned Senior counsel laid stress on the aspect of entitlement of the defendant in the goodwill of the firm. Therefore, let me also analyze the provisions relating to goodwill as envisaged under the partnership Act in order to ascertain whether the entitlement of the goodwill under the Act gives any right to the person to use the name of the business of the partnership or not.

34. Section 55 of the Act provides for the provisions relating to goodwill. The said section reads as under:

“Sale of goodwill after dissolution.

(1) In settling the accounts of a firm after dissolution, the goodwill shall, subject to contract between the partners, be included in the assets, and it may be sold either separately or along with other property of the firm.

(2) Rights of buyer and seller of goodwill. Where the goodwill of a firm is sold after dissolution, a partner may carry on a business competing with that of the buyer and he may advertise such business, but, subject to agreement between him and the buyer, he may not-

(a) use the firm name,

(b) represent himself as carrying on the business of the firm, or

(c) solicit the custom of persons who were dealing with the firm before its dissolution.

(3) Agreements in restraint of trade. Any partner may, upon the sale of the goodwill of a firm, make an agreement with the buyer that such partner will not carry on any business similar to that of the firm within a specified period or within specified local limits, and, notwithstanding anything contained in section 27 of the Indian Contract Act, 1872 (9 of 1872), such agreement shall be valid if the restrictions imposed are reasonable.”

35. From the bare reading of Section 37, it is abundantly clear that the said section merely provides that in settling the accounts of a firm, the goodwill shall be included in the assets and may be sold either separately or along with the other property of the firm. This section again gives an indication that while settling the accounts after the dissolution, the goodwill shall be taken into consideration while arriving at the share of the profits of the partners of the firm. The said Section 55 when read with Section 37 would further reveal that the while settling the accounts of the outgoing partner, if the agreement between the partner allows so, then the goodwill shall also be taken into consideration.

36. It is noteworthy to mention that what the outgoing partner or his estate is entitle to is the share of the profits or interest as laid down under Section 37 of the Act and while arriving at the said figure of the profits and settling the accounts if need be, the valuation of the goodwill shall be also be considered. Therefore, what the outgoing partner is entitled to is the monetary value of the profits and it may include goodwill if the share on the property is computed. This would not in any circumstances mean that the in the absence of the settlement of the accounts, the goodwill or the portion of the same shall be deemed to be sold to the legal representative of the deceased partner of firm. The consequence of the same is that the estate of the deceased partner or legal representative is only entitled into monetary value of the profits and goodwill and not any right over the use of the name of the firm.

37. It is required to be seen that the right to use the name of the firm is the right of the buyer of the goodwill of the firm. The same cannot be said to accrue as a matter of lien in lieu of unsettlement of the accounts of the deceased partner or his estate when the partnership is continued by the surviving partners. Doing the same would mean creating the right which does not exist in law, therefore, even if the submission of Mr. Chandra is believed still, what Mr. Shankar Lal Khanna is entitled under the law if the civil court decides his entitlement is the monetary share of the profits as per the division of estate of the deceased partner and not any right to use the name of the firm.

38. The entitlement of Mr. Shankar Lal Khanna of the goodwill of the firm is also subject to the civil court deciding the provisions of the partnership deeds entered into by the partners from time to time. Mr. Chandra also relied upon the averments made in the written statement that Mr. Bhagwan Dass Khanna was careful about the goodwill of the firm as he has made a clause in the partnership deed dated 1 April 1997 and 23 October 1999 in the form of clause 18 and 19 respectively that goodwill shall not be considered for the purpose of determining the interest of the deceased partner. If such clause is existing under the partnership deed, it is highly doubtful whether at all the defendants or for that matter Mr. Shankar Lal Khanna can be entitled to goodwill of the business as the presence of the said clause in the partnership deed read with Section 55 of the Act clearly makes the clause 18 or clause 19 of the 1997 or 1999 deed applicable. Clause 18 of the partnership deed dated 1 April, 1997 and Clause 19 of the fresh partnership deed dated 23 October, 1999 are reproduced hereinbelow:

Clause 18

“18. That unless so expressly agreed to by the partners at the time of retirement, the share of a retiring partner shall not be in any way more than the amount due and found payable at the time of retirement. That in case of death of a partner, his interest in the partnership shall not exceed the amount found due and payable upto the date of death. Goodwill, if any, of this firm shall not be considered for determining the interest of the deceased partner. That in the case of death of any of the partners, other than the FIRST PARTY hereto, his share as from the date of his death shall belong to his son and the partnership business shall be continued to be carried on by the partnership constituted by the remaining partners and the son of the deceased partner under the provisions recorded in his Partnership Deed.

Clause 19

“That unless so expressly agreed to by the partners at the time of retirement, the share of a retiring partner shall not be in any way more than the amount due and found payable at the time of retirement. That in case of death of a partner, his interest in the partnership shall not exceed the amount found due and payable upto the date of death. Goodwill, if any, of this firm shall not be considered for determining the interest of the deceased partner. That in the case of death of any of the partners, his share as from the date of his death shall belong to his son and the partnership business shall be continued to be carried on by the son of the deceased partner under the provisions recorded in this Partnership Deed.”

This is due to the reason that Section 55 relating to the goodwill is subject to the contract to the contrary. In the present case, there is a clause to the contrary. In any case, the said aspect relating to entitlement of the goodwill shall be dealt with by the civil court seized of the dispute in more detail. At this stage for the purposes of prima facie view, the submission of Mr. Chandra cannot be acceded to.

39. Mr. Chandra in order to canvass his submission that Mr. Shankar Lal Khanna is entitled to the goodwill of the business has relied upon the judgment of the apex in the case of Khushal Khemgar Shah (supra) wherein the Supreme Court has held as under:

“But it is not enacted thereby that goodwill may be taken into account only when there is a general dissolution of the firm, and not when the representatives of a partner claim his share in the firm, which by express stipulation is to continue notwithstanding the death of a partner. Nor do ss. 39, 42 and 46 which were relied upon by counsel for the ‘defendants support that contention. Under s. 39 the dissolution of partnership between all the partners of a firm is called the “dissolution of the firm”; and by s. 42 a firm is said to be dissolved subject to the contract between the partners on the happening of certain contingencies. Section 46 provides that on the dissolution of a firm every partner or his representative is entitled as against all the other partners or their representatives, to have the property of the firm applied in payment of the debts and liabilities of the firm, and to have the surplus distributed among the partners or their representatives according to their rights.

These provisions deal with the concept and consequences of dissolution of the firm: they do not either abrogate the terms of the contract between the partners relating to the consequences to ensue in the event of the death of a partner when the firm is not to stand dissolved by such death, nor to the right which the partner has in the, assets an (property of the firm. The Partnership Act does not operate to extinguish the right in the assets of the firm of a partner who dies when the partnership agreement provides that on death the partnership is to continue. In the absence of a term in the deed of partnership to that effect, it cannot be inferred that a term that the partnership shall continue notwithstanding the, death of a partner will operate to extinguish his proprietary right in the assets of the firm.”

40. The observations of the Supreme Court in the case of Kushal Khemkar (supra) are noteworthy and there is no quarrel to the said proposition. It is true that the goodwill cannot be said to be put aside at the time when the firm is dissolved even by the death of the partner. The said circumstance cannot be treated differently from any other event by virtue of which the dissolution of the firm occurs. The proprietary right of the partner in the asset of the firm cannot be overlooked even in case of dissolution by the death of the partner. The combined effect of the said observations of the Supreme Court in Khushal Kemkar (supra) is that the goodwill as an asset shall be taken into consideration when the firm is dissolved by the death of the partner.

41. It is true that the proprietary rights of the partner in the assets of the firm cannot be forgotten including the one in goodwill at the time of dissolution of the firm by way of the death of the partner. But that by itself does not mean that the deceased partner or his estate is entitled to the property of the firm as such. The entitlement of the estate of deceased partner or his legal representative shall be the share of the profits as per the mode of the computation as prescribed under the provisions of the partnership act unless there is a contract to the contrary. It is only for the purposes of computing the said share of profits or interest, the proprietary right or share of the partner in the partnership property shall be taken into consideration. The said observations of the Supreme Court in Khushal Khemkar (supra) has nowhere held that the estate of the partner is entitled to the assets of the firm as such. The mode prescribed under the partnership act for settling the accounts of the partner under the relevant provisions shall continue to operate in such respect subject to anything contained in the contrary wherever provisions provides so.

42. This proposition has been clarified by the Supreme Court time and again that the share of the partner at the time of dissolution is nothing but a monetary value of sum of profits of his share in the partnership property. The Supreme Court time and again in this respect relied upon the often quoted passage from Lindley on Partnership (12ed at page 375) which reads as under:

“What is meant by the share of a partner is his proportion of the partnership assets after they have been realised and converted into money, and all the partnership debts and liabilities have’ been paid and discharged. This it is, and this only which on the death of a partner passes to his representatives, or to a legatee of his share ………. and which on his, bankruptcy passes to his trustee” (Emphasis Supplied).

43. The aforenoted excerpt from Lindley on Partnership was approved by Supreme Court in the case of Addanki Narayanappa v. Bhaskara Krishtappa, 1966 SCR (3) 400 wherein Hon'ble Apex court after approving Lindley on partnership observed thus:

“The interest of a partner in partnership assets comprising of movable as well as immovable property should be treated only as movable property. His right during the insistence of the partnership is to get his share of the profits from time to time, as may be agreed upon among the partners, and his right after the dissolution of the partnership, or with his retirement from, the partnership, is only to receive the money value of his share in the net partnership assets as on the date of dissolution or retirement, after a deduction of Liabilities and prior charges.” (Emphasis Supplied)

44. The view taken by the Supreme Court in Addanki (supra) has been further approved later after the decision of Kushnal (supra) has been rendered by the Supreme Court in the case of Controller of Estate Duty Gujarat-I, Ahmedabad v. Mrudula Nareshchandra, 1986 SCR (3) 45, wherein Hon'ble Sabyasachi Mukherjee (as his lordship then was) again approved the same view after considering Kushnal (supra). In the words of the court, it was observed thus:

“In a partnership there is a community of interest in which all the partners take in the property of the firm. But that does not mean that during the subsistence of the partnership a particular partner has any proprietary interest in the assets of the firm. Every partner of the firm has a right to get his share of profits till the firm subsists, and he has also a right to see that all the assets of the partnership are applied to and used for the purpose of the partnership business. All these rights of a partner show that he has got a marketable interest in all the capital assets of the firm including the goodwill asset even during the subsistence of the partnership. This interest is ‘property’ within the meaning of s. 2(15) of the Estate Duty Act, 1953. [53 D-F]

The goodwill of the firm is an asset in which the dying partner has a share. It passes on the death of the dying partner and the beneficiary of such passing would be one who by virtue of the partnership agreement would be entitled to the value of that asset. The fact that such interest might devolve not on the legal representatives but on a different group or category of persons or that from the goodwill the legal representatives might be excluded, would not make any difference for the purpose of assessment of estate duty. The entirety of the interest of the deceased partner that would pass, which necessarily included goodwill, would be includible in the estate. The valuation of such entire interest has to be determined as provided under s. 36 of the Estate Duty Act, 1953 read with Rule 7(2) of the Estate Duty Rules, 1953. (Emphasis Supplied)”

45. From the bare reading of the aforenoted observations of Supreme Court in the case of Mrudula (supra), it is clear that the beneficiary of the goodwill under the partnership is entitled to the value of the said asset. The said value shall be considered in the form of money. It is not as if the said goodwill itself gets transferred or deemed to be sold to the legal representative of the deceased partner. The observations of the Supreme Court in this context still hold the field and relied upon by the courts from time to time.

46. In answer to the argument of Mr. Chandra that Bhagwan Dass Khanna was using the name M/s. Bhagwan Dass Khanna in the year 1937 as a sole proprietor, he never wanted to part with goodwill and reputation with any of his sons as appears from the tone of many clauses of partnership deeds, it is the admitted in law that the Indian Partnership Act, 1932 provides for a mechanism for dealing in property which has been the subject matter of partnership firm upon dissolution of the firm. In this context, the relevant Section of the Partnership Act, 1932 relating to the same is reproduced herein after:-

“Section 46:

46. Right of partners to have business wound up after dissolution. On the dissolution of a firm every partner or his representative is entitled, as against all the other partners or their representatives, to have the property of the firm applied in payment of the debts and liabilities of the firm, and to have the surplus distributed among the partners or their representatives according to their rights.”

47. From a bare reading of the above Section 46, it becomes clear that the assets/properties belonging to the partnership vests in the firm as the section uses the expression “property of the firm” and not in the individuals and upon dissolution.

In this context, the observations of Supreme Court in the case of Commissioner Of Income Tax, Madhya Pradesh v. Dewas Cine Corporation, AIR 1968 SC 676 are worth noting wherein the Court observed thus:

“Under the Partnership Act, 1932, property which is brought into the partnership by the partners when it is formed or which may be acquired in the course of the business becomes the property of the partnership and a partner is, subject to any special agreement between the partners, entitled upon dissolution to a share in the money representing the value of the property. When the two partners brought in the theatres of their respective ownership into the partnership, the theatres must be deemed to have become the property of the partnership. Under s. 46 of the Partnership Act, 1932, on the dissolution of-the firm every partner or his representative is entitled, as against all the other partners or their representatives, to have the property of the firm applied in payment of the debts and liabilities of the firm, and to have the surplus distributed among the partners or their representatives according to their rights. Section 48 of the Partnership Act provides for the mode of settlement of accounts between the partners. It prescribes the sequence in which the various outgoing are to be applied and. the residue remaining is to be divided between the partners. The distribution of surplus is for the purpose of adjustment of the rights of the partners in the assets of the partnership; it does not amount to transfer of assets.

On dissolution of the partnership, each theatre must be deemed to be returned to the original owner, in satisfaction partially or wholly of his claim to a share in the residue of the assets after discharging the debts and other obligations. But thereby the theaters were not in law sold by the partnership to the individual partners in consideration of their respective share in the residue.” (Emphasis Supplied)

48. One thing immediately becomes clear from the reading of aforesaid observation of the Apex Court which is that once the property being in ownership of the partners is brought into the partnership, it becomes the property of the firm.

49. From the above said facts and circumstances, it appears from all the partnership deeds that they expressly state that goodwill of the firm will not be considered while deciding the share of the partners. The goodwill is indeed inseparable from the firm as discussed above. Further, all the partnership deeds mentioned the clause “goodwill of the firm” not “goodwill of the concerned partner”. In fact, the said deeds specifically state that the goodwill of the firm shall not be taken into consideration in event of death or retirement.

50. In view of the above discussion, the submission canvassed by Mr. Sudhir Chandra, learned Senior counsel appearing on behalf of the defendants cannot be accepted that the Mr. Shankar Lal Khanna possesses any such right to use the name of the firm. Prima facie, no such right to use the firm name vests in Mr. S.L Khanna as per the provisions of the partnership act.

51. Once it is realized that the Mr. S.L Khanna prima facie does not have any right to use the firm name Bhagwan Dass Khanna Jewellers, the family members of Mr. S.L Khanna cannot derive any such aid or permissive right on the basis what Mr. S.L Khanna himself does not have. It is established principle of law that a person cannot pass a title of any kind over the property be it movable or immovable which he himself does not have. The said principle is equally apposite in the instant case. Therefore, no aid can be drawn by the defendants on the basis any such non-existent right of Mr. S.L Khanna. The submission of Mr. Sudhir Chandra, learned Senior counsel for the defendants on this count is therefore rejected.

52. The argument of the Mr. Chandra that the plaintiff and its existing partners have taken thumb impression from Late Shri Bhagwan Dass Khanna in order to reduce his share in the partnership illegally under undue influence is the matter which has to be looked into by the court which will determine the share of the Shri S.L Khanna on the basis of the entitlement of Shri Bhagwan Dass Khanna as per law. The said submission does not affect the case of the defendant in the instant proceedings. In the instant case, the fact of the matter is that Shri Bhagwan Dass Khanna has died in the year 1999 and thereafter the partnership has been continued by the surviving partners, whether the share has been reduced by fraud is the matter to be determined the civil court dealing with the said dispute, the same may not give rise to any right of the defendants to use the trade name Bhagwan Dass Khanna as their corporate name. The said submission is therefore rejected.

53. Likewise, the argument of Mr. Chandra is that the suit is pending for quite sometime and no interim order has been granted, therefore this court should expedite the trial is equally misplaced. It is true that in the trade mark matters, the Supreme Court has expressed that the trial should normally be expedited by exercise of powers. The said observations are nowhere indicative of the law that the court's power to grant the interim orders in the cases where there is prima facie case made out of infringement of the trade mark is curtailed or taken away. From nowhere it can be inferred that that the court should not grant the interim orders solely due to passage of time during the pendency of the suit in the board of the court. The grant of interim order in the trade mark matters is mandate of statute as per Section 135 of the Trade marks Act and equally has been laid by the Supreme Court time and again emphasizing the need for the grant of interim orders. The grant of interim injunctions is imperative in the cases where exfacie infringements not merely to protect the trade mark in question but also in public interest. In fact, the defendants have delayed the proceedings while taking so many adjournments in the matter.

54. It is well settled principle of law that interest of the public lies to finish the litigation. The latin maxim that interest republicae ut sit finis litium is equally apposite in the trade matters. Therefore, the grant of interim orders in trade matters is not merely required to protect the trade mark of the proprietor but also to take the litigation to the logical conclusions in the interest of the public. The sooner interim orders are granted in the cases of ex facie infringements, the earlier results in the form of ending or closure of the litigation shall be seen by the courts.

55. If the present case is tested upon the aforenoted principles of law, it is beyond any cavil of doubt that the defendants have no reason to use the name BHAGWAN DAS KHANNA JEWELLERS as a part of the corporate name and straightaway infringing the plaintiff's registered trade mark Bhagwan Dass Khanna and BDK. This can be seen as under:

56. The plaintiff is the registered proprietor of the trade mark BDK word mark and BHAGWAN DASS KHANNA in respect of jewellery goods included in class 14 since the year 2003 claiming the use since the year 1963 as per the registration no. 1166568 in class 14 and others claimed in the plaint.

57. The defendants are using the mark BDK and the name BHAGWAN DASS KHANNA as a part of the corporate name by using the name BHAGWAN DAS KHANNA JEWELLERS (P) Ltd as per the business card and the trade literature filed on record and violating the right of the plaintiff's registered trade mark BDK as well as Bhagwan Dass Khanna. The defendant's use of the mark is subsequent to that of the plaintiff.

58. Section 29 of Trade Marks Act 1999 provides for an infringement of the trade mark. In the said Section, sub section 29(5) provides for the infringement of the trade mark with respect to the trade name. The said section reads that a registered trade mark is infringed by a person if he uses such registered trade mark, as his trade name or part of his trade name, or name of his business concern or part of the name, of his business concern dealing in goods or services in respect of which the trade mark is registered.

59. On the bare perusal of the said Section 29(5), it is clear that if a trade mark is registered in respect of particular set of goods, the use of the said mark as a trade name in respect of the same goods is an infringement of trade mark. In the instant case, the provisions of Section 29(5) so far as it relates to use of the mark BHAGWAN DASS KHANNA as a corporate name are squarely attracted. Likewise the use of the word or acronym BDK attracts Section 29(1) of the Act and thereby cause infringement of the trade mark.

60. Mr. Sudhir Chandra, learned Senior counsel has sought to justify the acts of the infringement of the trade mark by contending that there is no likelihood of confusion and deception in the instant case as the jewellery items are expensive ones. All the persons who are purchasing the jewelleries are educated class and therefore there is no likelihood of confusion and deception. I find that the submission of Mr. Chandra, learned Senior counsel as meritless and the same is rejected. This is due to the reason that the present case is not of passing off but of an infringement of identical trade mark. The plaintiff is the registered proprietor of the word mark BDK along with BHAGWAN DASS KHANNA. The said mark has been used by the defendant as a part of the corporate name and BDK as a trade mark causing infringement of trade mark.

61. Section 29(5) provides for an infringement in in relation to trade names, the enquiry in such cases is not likelihood of confusion and deception as the said section itself is enacted for the use of the registered trade mark as a part of the corporate name. The enquiry of the likelihood of confusion and deception is necessitated only in cases where there are not identical marks but are deceptively similar marks or in the cases where the legislature has used the said expression under the statutory provisions.

62. Section 29 of the Trade marks Act is a self contained provision providing for distinct kinds of eventualities in the cases of infringement of trade marks. Each subsection is distinctly worded and wherever the need be legislature has prescribed in the enquiry as to likelihood of confusion and deception in the appropriate sub sections of Section 29. The same is evident if one reads Section 29(2) vis a vis Section 29(1) etc. The authorities on the subject like Kerly's on trade mark equally interpret distinctly worded sections of infringement of trade mark under the statute of UK containing similarly worded provisions distinctly and states that the enquiry as to confusion and deception cannot be read into the wordings of the section where it is not provided for.

63. Consequently, when the defendant use the identical mark BHAGWAN DASS KHANNA as a part of the corporate name in respect of identical goods, the provisions of Section 29(5) are satisfied, no separate enquiry as to likelihood of confusion and deception is required as per the provision of the law.

64. In any case, I do not find merit otherwise on the submission of Mr. Sudhir Chandra, learned Senior counsel for the defendant that there will not be any confusion and deception in the instant. It is unimaginable as to how there will be no confusion and deception when there shall be two shops operating under the same name or trade name BHAGWAN DASS KHANNA Jewellers using the same name BDK operating in the same vicinity of South Extension which are few blocks away from each other. Prima facie, I find that not merely the consumers will be taken to believe that the goods offered by or shop operated by the defendants is that of the plaintiffs but also that the said shop is affiliated to or branch office of or licensed by the plaintiffs, which is actually untrue. The consumers visiting south extension market aiming to go the shop of the plaintiffs may mistakenly arrive at the shop of the defendants having the same name which are few blocks away in the same market. Therefore, there shall be all likelihood of confusion and deception in the instant case howsoever a rich customer he or she may be. If there are identical trade names serving in the same place, there is no reason of not likelihood of confusion and deception.

65. The only difference between the plaintiff's name and defendants' name is that the defendants have very cleverly removed an “S” from “Dass” for mere purpose of causing deception and confusion in the public. This clearly shows the malafide intention of the defendants to make unfair gains on the reputation and goodwill of the plaintiff in the market. Even if a man uses his own name as to be likely to deceive and so to divert business from the plaintiff to the defendants, he will be restrained.

66. It is the admitted position that the plaintiff and defendants are in the same business of jewellery, both are located in Delhi, both are dealing with same class of customers and particularly the present case is not a likelihood of confusion and deception which is required in an action for infringement but in the present case confusion has happened not only at the customer level but also at the postal departments, banks etc.

67. The argument of the defendants is without any merit that there is no confusion or deception as mostly the jewelleries are being purchased by the rich people. The said argument is totally flimsy, false and frivolous as in the present case in fact the actual deception has happened. Two affidavits of Ganesh Dass Khanna and Atul Khanna have been filed by the plaintiffs wherein the detail of the actual confusion and deception has been given. The details of actual confusion occurred are mentioned in the said two affidavits.

a) In the first affidavit of Sh. Ganesh Dass Khanna, it is stated that there have been numerous instances of actual confusion to the general consumers of the plaintiff firm and the defendants' company. He stated that the first instance of confusion occurred in August, 2008 when the plaintiff-firm received a letter dated 8 August, 2008 from American Express Bank citing their merchant No. 9825618192 but addressed to BD Khanna Jewellers located at E-91, South Ex. Part-I, New Delhi-110049 which is the address of the defendants. The said letter referred to the acceptance of a merchant card acceptance agreement entered into between the plaintiff firm and American Express Bank. The said letter was, however, personally delivered to the plaintiff firm at G-17, South Extension Market, Part-I, New Delhi-110049 by one Mr. Sameer Jain of American Express Bank. The original letter dated 8 August, 2008 has been filed and annexed as Annexure-A. The plaintiff firm through the present deponent then addressed a letter dated 14 August, 2008 to Mr. Sunil Sachdev of American Express Bank expressing surprise and concern as to how a merchant number already allotted to the plaintiff firm had been allotted to the defendants. A true copy of the said letter dated 14 August, 2008 as sent by the plaintiff firm has been filed and annexed as Annexure-B. The plaintiff firm then received a letter dated 14 August, 2008 in response to their letter of the same date from American Express Bank. The said letter stated that American Express Bank was investigating the matter and sought two weeks' time to respond back. The original letter dated 14 August, 2008 as received from American Express Bank has been annexed as Annexure-C. The plaintiff firm then received another letter dated 4 December, 2008 from American Express Bank whereby it regretted the inconvenience caused to the plaintiff firm and requested it to ignore its letter dated 8 August, 2008. The original letter dated 4 December, 2008 has been filed and annexed as Annexure-D.

b) In the second affidavit of Mr. Atul Khanna, he stated that from 16 September, 2010 till 20 September, 2010 he represented the plaintiff firm at the “Jewellery & Gem Fair 2010” held in Hong Kong and on one occasion on 19 September, one Mr. Nileen Sonkhia visited their stall and introduced himself to said Atul as the proprietor of one Mumbai based Nileema Gems and handed over his business card. He also asked Mr. Atul if he could meet Mr. Deepak Khanna, defendant No. 2. Mr. Atul then informed him that there was no one by the name of Mr. Deepak Khanna working with them. Mr. Naleem further inquired if that was the stall of the company doing its business by the name of BHAGWAN DASS KHANNA JEWELLERS. Mr. Atul then informed him that indeed the stall belonged to M/s Bhagwan Dass Khanna Jewellers but the person he was looking for is not associated with the plaintiff firm and the person he was talking about does not work with them. Mr. Naleem got furious and told Mr. Atul that he was lying in saying that there was no Mr. Deepak Khanna associated with M/s Bhagwan Dass Khanna Jewellers. He further informed Mr. Atul that he had come to take the payment of those goods which were purchased from him earlier on credit by defendant No. 2. He further threatened Mr. Atul that he would inform the agent, Mr. Chhuter Bhuj Sharma through whom he had sold the goods to Mr. Deepak Khanna about the same. After realizing the confusion, Mr. Atul clarified to Mr. Naleem that there has been some misunderstanding as they were not the same Bhagwan Dass Khanna Jewellers he was referring to and asked him to calm down. He further informed Mr. Naleem that the goods were bought from him by the defendants which have a deceptively similar name to that of the plaintiff firm and hence the confusion. Mr. Atul Khanna in his affidavit further affirmed that the above mentioned incident is one of the several cases of confusion and the problems arising therefrom due to deceptively similar names of the plaintiff firm and the defendants' company.

Hence, the present case is of the nature in which actual confusion and deception has arisen.

68. The next submission of the learned counsel for the defendants is that since the corporate name of defendant No. 1 was registered by the Registrar of Companies under the Companies Act, 1956, the defendants are entitled to use the same as the company was registered by the authority in accordance with law.

In Bhandari Homoeopathic Laboratories v. L.R Bhandari (Homoeopaths) Pvt. Ltd.1976 Tax LR, 1382 (Delhi) one R.K Bhandari retired from the partnership business of L.R Bhandari and Sons and there was a clear condition that the retiring partner would not be entitled to carry on business in the firm's name. The cause of action for filing the suit arid application for injunction arose because a private limited company under the name of the defendant had been set up by R.K Bhandari, the retiring partner. It was stated that this was done with a view to nullify the affect of the dissolution deed. Kapur, J. held as under:

“It is settled law, that a registered company can be restrained being registered with a name similar to that of another registered company. There is considerable case law, showing that a company can also be restrained from being registered in the name of an unregistered firm. There is also case law to indicate, that if the Company has already been registered, it can be restrained from carrying on business in the registered name. The principles on which an injunction is issued by the Court have been set out in Buckley on the Companies Act thirteenth edition at page 48:-

“The jurisdiction in these cases rests either upon fraud or upon property; not that there is property in the name. but that the use of a name closely resembling that in which another carries on business is calculated to deceive or cause confusion between the two businesses and to affect property by diverting customers to the person taking, the name, or by affecting the credit or goodwill of the person whose name is taken (a), where this is not the case there is no jurisdiction (b).”

69. The said aspect has also been dealt with by a Division Bench of this Court in the case of Montari Industries Ltd. v. montari Industries Ltd., reported in 1996 PTC (16) 142, relevant paras of which read as under:-

“(9) We have considered the submission of learned counsel but we have not been persuaded to accept the same. Section 20 of the Companies Act, 1956 provides that no company will be registered by a name which is similar or identical or too nearly resembles the name by which a company in existence has been previously registered. In case where a company has been incorporated with a name which is identical or too nearly resembles the name of a company which has been previously incorporated, Section 22 makes a provision for getting the names of the former altered. No doubt, Section 22 makes provision for rectification of the name of a company which has been registered with undesirable name but that does not mean that the common law remedy available to and aggrieved party stands superseded. The plaintiff will have two independent rights of action against the defendant who may be using the corporate name of a previously incorporated company, one under Section 22 of the Companies Act and the other for injunction restraining the defendant from using the corporate name of the plaintiff or from using a name bearing close resemblance which may cause or which is likely to cause confusion in the minds of the customers or general public in view of the similarity of names. Both the remedies, one under Section 22 and the other under the common law operate in different fields. Under Section 22 of the Companies Act, the Central Government has no jurisdiction to grant any injection against the use of an undesirable name by a company whereas in a suit for permanent injection the court can pass an order injecting the defendant from using the name which is being passed off by the defendant as that of the plaintiff. In K.G Khosla Compressors Ltd. v. Khosla Extraktions Ltd., AIR 1986 Delhi 184 (2), the plaintiff filed a suit against the defendant or permanent injection restraining the latter from using, trading or carrying on business under the name and style of Khosla Extraktions Ltd. on the ground that the plaintiff was incorporated as K.G Khosla Compressors Ltd. prior to the incorporation of the defendant and it cannot be allowed to imitate or copy the trade name of the appellant. Along with the suit, the plaintiff had filed an application under Order 39, Rules 1 and 2 for temporary injection restraining the defendant from using trading and carrying on business and from entering capital market and making public issue under the name M/s. Khosla Extraktion Ltd. In that application, the defendant had taken the same plea which has been taken in the present case about the competence of the court to grant relief in view of Sections 20 and 22 of the Companies Act, 1956. The learned single Judge after review of the case law held that the Court would, have jurisdiction to grant injunction and Sections 20 and 22 of the Companies Act, 1956 in no way limit the jurisdiction of the Civil Court. In this regard the Court observed as follows:-

“But, then in the present suit the plaintiff has also based its cause of action on passing off of the name of defendant No. 1 as that of the plaintiff. I would rather say that jurisdiction of the Central Government under Ss. 20 and 22 of the Act and the jurisdiction of the Civil Court operate in two different fields. Further the Central Govt. has to act within the guidelines laid down under S. 20 of the Act, while there are no such limitations on the exercise of jurisdiction by the Civil Court.”

70. In Laxmikant V. Patel v. Chetanbhat Shah, reported in (2002) 3 SCC 65, the Hon'ble Supreme Court has held that:

“8. It is common in trade and business for a trader or a businessman to adopt a name and/or mark under which he would carry on his trade or business. According to Kerly (Law of Trade Marks and Trade Names, 12 Edn., para 16.49), the name under which a business trades will almost always be a trade mark (or if the business provides services, a service mark, or both). Independently of questions of trade or service mark, however, the name of a business (a trading business or any other) will normally have attached to it a goodwill that the courts will protect. An action for passing-off will then lie wherever the defendant company's name, or its intended name, is calculated to deceive, and so to divert business from the plaintiff, or to occasion a confusion between the two businesses. If this is not made out there is no case. The ground is not to be limited to the date of the proceedings; the court will have regard to the way in which the business may be carried on in the future, and to its not being carried on precisely as carried on at the date of the proceedings. Where there is probability of confusion in business, an injunction will be granted even though the defendants adopted the name innocently.

11. Salmond & Heuston in Law of Torts (20 Edn., at p. 395) call this form of injury as “injurious falsehood” and observe the same having been “awkwardly termed” as “passing off” and state:

“The legal and economic basis of this tort is to provide protection for the right of property which exists not in a particular name, mark or style but in an established business, commercial or professional reputation or goodwill. So to sell merchandise or carry on business under such a name, mark, description, or otherwise in such a manner as to mislead the public into believing that the merchandise or business is that of another person is a wrong actionable at the suit of that other person. This form of injury is commonly, though awkwardly, termed that of passing-off one's goods or business as the goods or business of another and is the most important example of the wrong of injurious falsehood. The gist of the conception of passing-off is that the goods are in effect telling a falsehood about themselves, are saying something about themselves which is calculated to mislead. The law on this matter is designed to protect traders against that form of unfair competition which consists in acquiring for oneself, by means of false or misleading devices, the benefit of the reputation already achieved by rival traders.”

x x x x

(22) In considering the question whether the activities of the appellant are likely to cause confusion or pose a real and tangible risk of injuring the respondents reputation or goodwill, regard must be had to the fact that appellant is using a name similar to that of the respondent and it will amount to making a representation that the appellant is associated with the defendant. The appellant cannot be permitted to appropriate the reputation and goodwill of the respondent to promote its business interests.”

71. Section 20 of the Companies Act, 1956 reads as under:

“20. Companies not to be registered with undesirable names.—(1) No company shall be registered by a name which, in the opinion of the Central Government, is undesirable.

(2) Without prejudice to the generality of the foregoing power, a name which is identical with, or too resembles, —

(i) the name by which a company in existence has been previously registered; or

(ii) a registered trade mark, or a trade mark which is subject of an application for registration, of any other person under the Trade Marks Act, 1999, may be deemed to be undesirable by the Central Government within the meaning of sub-section (1).

(3) The Central Government may, before deeming a name as undesirable under clause (ii) of sub-section (2), consult the Registrar of Trade Marks.”

Sub-section (2)(ii) of the said provision was incorporated with effect from September 15, 2003 when the Trade Mark Act, 1999 came also into operation from the said date. The said provision mandates that the companies not to be registered if a name is identical with or too nearly resembles the name which has been previously registered or a registered trade mark or a trade mark which is a subject of an application for registration under the Trade Marks Act, 1999.

It appears that the said provision of sub-section (2) of Section 20 was incorporated in order to avoid the civil litigation before the Court and duty was cast upon the Registrar of Companies to apply its mind at the time of granting the registration of the name of the company. In the present case, it is undisputed fact that when the defendant company was incorporated in the year 2007, the plaintiff was registered proprietor of two trade marks. The trade marks and trade names used by both the parties are almost identical, thus, it is evident that the Registrar of Companies granted the registration contrary to Section 20 of the Indian Companies Act. The Registrar of Company by complying the provisions of Section 20(2)(ii) obtained the search report from the office was Trade Marks Registration, the registration of the name of the company of defendant No. 1 would not have been issued under the mandatory provision and litigation could have been avoided however, it did not happened despite of direction issued by the Apex Court and in various other cases and mandatory provisions of various Acts.

72. In the case of Cadila Health Care Ltd. v. Cadila Pharmaceuticals Ltd.., 2001 (21) PTC 300 (SC), the Supreme Court has issued the following directions in para 34 of the judgment which reads as under:

“34. Keeping in view the provisions of Section 17-B of the Drugs and Cosmetics Act, 1940 which inter alia indicates that a limitation or resemblance of another drug in a manner likely to deceive being regarded as (sic) spurious drug it is but proper that before granting permission to manufacture a drug under a brand name the authority under that Act is satisfied that there will be a no confusion or deception in the market. The authorities should consider requiring such an applicant to submit an official search report from the Trade Marks Office pertaining to the trade mark in question which will enable the Drug Authority to arrive at a correct conclusion.”

Yet in another case reported as 2003 (26) PTC 200 (Del), Biochem Pharmaceutical Industries v. Astron Pharmaceuticals, this Court has given similar directions in this regard. Relevant paras of the said judgment are reproduced as under:

“18. Before parting with this judgment, in order to avoid such situation directions may also be given to the Registrar of Trade Marks as well, as were given to the Drug Authorities by the Supreme Court. The Supreme Court directed that the Drug Authorities should consider requiring such an applicant to submit Official Search Report from the Trade Marks Office pertaining to the trade mark in question which will enable the drug authorities to arrive at a correct conclusion. It would not be out of place to mention that different Acts like Drugs and Cosmetics Act, 1940, Food Adulteration Act, Trade and Merchandise Marks Act, Copyright Act, Designs Act etc. have made numerous provisions to protect the consumers. But as is bound to happen in impending legislative explosion following globalisation and numerous existing Acts, different authorities act differently. Such an approach is bound to create much more confusion and is sure to result in the problem like the present one. To avoid this, similar direction is required to be issued to the Registrar of Trade Marks so that right hand knows what the left hand is doing and there is no conflict and any problem of this kind is sorted at the very initial stage. It is also notable that the Drug Authorities do not have any centralized office system of allotting names and they are generally working in different State capitals. If similar directions are issued, some Drug Controllers may respond while others may sleep over the matter. But it would not be difficult to get the requisite information in case they are inter-connected through internet and the information is made available by all the Drug Controllers; the Registrar of Trade Marks and similar other Authorities to each other on internet itself to avoid such a situation. One has to look to the problem from the point of saving time, energy and money not only of the parties but of different offices of the Government and the Courts by undertaking few minutes exercise before accepting a trade mark after making a search. That will save hundreds of hours of several authorities. This exercise appears to be essential from another point of view. If the drug is spurious and the offence is punishable to sell the spurious drugs, then the Drug Controllers in absence of information may not take appropriate steps for prosecution of the guilty and the person who adopt this kind of trade mark innocently do not suffer prosecution for criminal offence. Ignorance would again lead to unnecessary wastage of time, energy and money of the State and innocent accused who fail to make any search about similar trade mark and the graph of ever increasing social cost in the shape of time, energy and money of the public officers and the Courts would continue to rise causing loss to national exchequer.

19. In view of the above, it is appropriate that that trade marks authority shall also take precautions by calling an Official Search Report from the Drug Controllers pertaining to a particular trade mark relating to medicine. The Law Commission and the Ministry of Law may also consider making necessary amendments for furnishing information on internet in various Acts and Rules made there under for the aforesaid purpose.”

DELAY

73. Now, on the question of delay raised by the defendant, it is the admitted case of the defendants that defendant No. 1 was incorporated on 19 April, 2007 and started business in September, 2007. The present suit was filed on 28 May, 2008. In para 9 of the plaint, it is mentioned that after having come to know about the defendants' activities in the month of September, 2007 the plaintiff conducted an online search through the website of the Ministry of Company Affairs and found out that the defendants were indeed a company incorporated under the Indian Companies Act. This took some time to take all the information and therefore, the moment all the documents are completed, the suit was filed in the month of May, 2008. Therefore, there is hardly any delay on the part of the plaintiff to initiate the action against the defendants. According to the plaintiff, the present case is a case of infringement of trade mark where the plaintiff is holding the registration of the trade name BHAGWAN DASS KHANNA Jewellers as well as the mark BDK along with the device. In case, there is a delay of few months that is immaterial and is not fatal to an action against infringement of trade mark. The only different in two trademarks is that the defendants are using single ‘s’ in the word ‘Dass’ otherwise two trading styles are almost identical. The conduct of the defendants is also to be examined by the Court. Therefore, the said delay alleged by the defendants is not fatal, not it supports the case of the defendants.

74. The following judgments have been referred:-

(i) Midas Hygiene Industries P. Ltd. v. Sudhir Bhatia, reported as 2004 (28) PTC 121 (SC), relevant para of the said judgment reads as under:

“5. The law on the subject is well settled. In cases of infringement either of Trade Mark or of Copyright normally an injunction must follow. Mere delay in bringing action is not sufficient to defeat grant of injunction in such cases. The grant of injunction also becomes necessary if it prima facie appears that the adoption of the Mark was itself dishonest.”

(ii) Swaran Singh Trading as Appliances Emporium v. Usha Industries (India) New Delhi, reported as AIR 1986 Delhi 343 (1), wherein it was observed that:

“(7) There is then the question of delay. Learned counsel for the respondents had urged that the delay is fatal to the grant of an injunction. We are not so satisfied. A delay in the matter of seeking an injunction may be aground for refusing an injunction in certain circumstances. In the present case, we are dealing with a statutory right based on the provisions of the trade and Merchandise Marks Act, 1958. An exclusive right is granted by the registration to the holder of a registered trade mark. We do not think statutory rights can be lost by delay. The effect of a registered mark is so clearly defined in the statute as to be not capable of being misunderstood. Even if there is some delay, the exclusive right cannot be lost. The registered mark cannot be reduced to a nullity. The principles governing other types of injunctions are not to be readily applied to a case like the present. of course, if it was a case of a similar mark as opposed to the same mark, the concurrent user coupled with delay might be a ground for refusing an injunction. However, when the same mark is being used, in a sense, the public is deceived into purchasing the defendant's goods on the belief that they are the plaintiff's goods, so a registered trade mark is a casualty, it is the duty of the Court to protect the registered mark. That is the whole concept of registration. So, we cannot refuse an injunction even if there is some delay especially when the mark is the same. To refuse the injunction would tantamount to permit a fraud being practiced on unwary customers. This is a matter of principle on which the Court cannot refuse the injunction.”

75. The purpose of incorporating the said provision as already mentioned was that the appropriate authorities who are granting the registration under the different Acts like Drugs and Cosmetics Act, 1940, Trade Marks Act, 1999, Copyright Act, 1957 and Companies Act in order to protect the rights of the consumers, to avoid confusion and to curtain litigations in courts. However, it has been noticed that despite specific provisions of the Acts and direction issued by the Courts, the said authorities are still granting the registrations.

76. There is no force in the submission of the defendants that the suit is liable to be stayed in view of the parties in the present suit and two causes of action are entirely different. It is the admitted position that Shanker Lal Khanna is not a party in the present case. Similarly, defendant Nos. 2 and 3, who are Directors of defendant No1, were not the partners at any point of time in M/s. Bhagwan Dass Khanna Jewellers. Therefore, the argument is rejected.

77. The argument of the defendants on Section 34 is also rejected. The said section is not applicable to the defendants as they have started the use of the alleged trade marks of the plaintiff and corporate name after the date of registration of the plaintiff's trade marks.

78. The resultant effect of the discussion done above is that the plaintiff is prima facie able to establish the case of infringement of the trade mark, the balance of convenience lies in favour of the plaintiff as the plaintiff will be put to more inconvenience with the continuing acts of the infringement of trade mark of the plaintiff when the defendant has no reason to use the said trade mark identical to that of the plaintiffs. The irreparable loss will also ensue to the plaintiff if the defendants are allowed to carry out the infringing activities without any lawful justification.

79. Accordingly, the prayers made in IA No. 6779/2008 are allowed and the defendants are restrained from using, depicting, displaying in any manner whatsoever, the trade mark/trade name “BHAGWAN DAS KHANNA”&“BDK” or similar variant thereof on any showroom display boards, packaging, advertising material, labels, stationery articles, business cards, or any other manner as used in course of the defendants' jewellery business or allied goods activities. However, defendants are allowed to use the name for the purpose of account books as well as for an operation of the bank till 31 March, 2013. I.A No. 6779/2008 is disposed of.

CS (OS) No. 1061/2008

80. List on 8 February, 2013 before the Roster Bench for further directions.