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Smart Summary

Judgment Summary by D.R. Khanna, J. — Surjeet Book Depot

Factual and Procedural Background

This suit was instituted by the plaintiff (Surjeet Book Depot) seeking a permanent injunction to restrain the defendants from infringing the plaintiff's registered trade-mark and from passing off, and also seeking accounts. The plaintiff filed I.A. 1013 of 1982 for an interim injunction restraining the defendants, during pendency of the suit, from printing, publishing and trading under the trade-mark "Surjeet Book Depot (P) Ltd." or any identical or deceptively similar name.

The plaintiff's pleaded history: the business "Surjeet Book Depot" began in 1950 (initially owned by Harnam Singh); Satnam Singh was admitted as partner in 1957; Surjeet Singh (defendant No. 2) was admitted in 1968. Disputes led to appointment of their father Sardar Lal Singh as arbitrator. Lal Singh purportedly gave an award dated 15.11.1976 dissolving the partnership and allotting the business and goodwill to Harnam and Satnam, with Surjeet allegedly receiving Rs. 1,00,000 in consideration for separation.

Subsequently Harnam and Satnam (together with Kamaljit) asserted they formed a new partnership carrying on the same business under the name "Surjeet Book Depot" and executed a partnership deed on 11.1.1977. That partnership applied for registration of the trade name on 30.12.1977; notice appeared in the Gazette on 16.2.1980, and registration was allowed in Part B.

Surjeet Singh denies the validity of the first dissolution deed and contends that a different (second) award was given by Lal Singh on the same day; he alleges signatures on the first deed were obtained without apprising the parties, and that Rs. 1,00,000 was not paid at the time stated. Surjeet later incorporated a company called "Surjeet Book Depot (P) Ltd." on 26.10.1981 and also conducted business under alternative names (Surjeet Publications, SBD Enterprises, Surjeet Book House).

Separate, earlier proceedings instituted by Surjeet Singh include: (a) a suit dated 10.9.1981 in the court of Shri S. M. Gupta (Sub Judge) seeking partition of shop No. VI-4074-75 Nai Sarak and a declaration of continuing partnership status (an interim order dated 26.10.1981 restrained Surjeet from holding himself out as partner; appeal pending); and (b) a December 1981 suit for possession of shop No. 4522-23 Nai Sarak (also pending).

The defendants in the present suit sought a stay under Sections 10 and 151 CPC and Section 111 of the Trade and Merchandise Marks Act, arguing that the controversy as to partnership status and rectification of the trade-mark registration were already the subject of other proceedings.

Legal Issues Presented

  1. Whether the court should stay the present suit in view of earlier proceedings and an application for rectification of the plaintiff's trade-mark registration under Section 111 of the Trade and Merchandise Marks Act.
  2. Whether an interim injunction should be granted restraining the defendants from using the trade name "Surjeet Book Depot" or "Surjeet Book Depot Pvt. Ltd." during pendency of the suit.
  3. Whether the defence based on Section 34 of the Trade and Merchandise Marks Act (use of one's own name) permits the defendant to use the impugned name despite the plaintiff's registration.
  4. Whether the question of dissolution of the original partnership on 15.11.1976 (as per the deed/award) deprives this Court of jurisdiction to grant interim relief concerning use of the trade name.

Arguments of the Parties

Plaintiff's Arguments

  • The business "Surjeet Book Depot" has historic continuity and goodwill dating from 1950, and the plaintiffs (Harnam and Satnam, with Kamaljit) are entitled to protect the registered trade-mark and prevent defendants from using an identical or deceptively similar name.
  • The plaintiffs rely on a dissolution deed / award dated 15.11.1976 (bearing signatures of the brothers and Lal Singh) which they say shows the firm was dissolved and the business and goodwill passed to Harnam and Satnam.
  • They obtained registration of the trade name and have a legitimate interest in preventing imitation while their mark remains on the register.

Defendant's (Surjeet Singh's) Arguments

  • The purported dissolution deed relied upon by the plaintiffs is not the true basis for dissolution; Surjeet contends a different (second) award was made on the same day and the earlier document was either procured without proper notice or collusively created.
  • He asserts that Rs. 1,00,000 was not paid at the time stated in the first document and that signatures on that document were not genuine or obtained with full knowledge of its nature.
  • He challenged the registration of the plaintiff's trade name by moving for rectification under Section 111 of the Trade and Merchandise Marks Act and sought stay of the present suit on that basis and under Section 10 CPC because related controversies were pending before another court.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The court's reasoning proceeds as follows:

  1. On Section 111 (Trade and Merchandise Marks Act): The court accepted that an application for rectification before the High Court can render the suit liable to be stayed; however, Section 111(5) empowers the Court to make interim orders (including injunctions) even while staying the suit. Thus, the existence of a rectification petition did not automatically preclude the court from granting interim relief in the present suit.
  2. On Section 10 CPC: The court recognized that one controversy in the suit—whether the partnership was dissolved on 15.11.1976 as per the deed filed by the plaintiffs—is already raised in the earlier suit before Shri S. M. Gupta. Nevertheless, because that earlier suit had an interim order restraining Surjeet Singh from holding himself out as partner, the specific question of proprietary interim relief concerning use of the trade name (which could not be agitated before Shri S. M. Gupta) remained open for adjudication by the present Court.
  3. On the defence of use of one's own name under Section 34 (Trade and Merchandise Marks Act): The court held that Section 34 presupposes bona fide user. If plaintiffs can demonstrate an absence of bona fide user by the defendant, they may obtain interim relief. Thus the bare fact that the defendant's name is "Surjeet Singh" does not automatically permit him to use the impugned trade name if his use is not bona fide.
  4. On documentary evidence: The court examined two documents dated 15.11.1976 (each termed an award of Lal Singh). One document (relied upon by plaintiffs) bears signatures of the partners and Lal Singh; the other lacks the parties' signatures. While the signature-bearing document attracts a presumption in its favour, the court identified infirmities that cast doubt on it:
    • The first document states Rs. 1,00,000 had already been paid to Surjeet Singh, whereas all parties admit payment occurred later and at different stages — a fact more consistent with the second document.
    • The first deed mentions division of four rooms of godown no. 4568 and an attached plan, but no plan has been produced or shown to exist, and there is no demonstration of how such division was effected.
    • A notice dated 17 July 1981 served by the plaintiff's counsel narrates that the godown had fallen entirely to Surjeet Singh's share, a position at variance with the first award and more consistent with the second award.
    The court noted that the second award appears to be a comprehensive decision disposing of disputes inter se the brothers, but the court declined to decide validity or effect of that second award in this suit, as those questions are subject to other proceedings.
  5. On overall effect of both documents: Even assuming the second award, both documents purport to dissolve the firm and allot the business to Harnam and Satnam. Questions about any rights reserved to Surjeet Singh (e.g., to use the shop) were held not germane to the present suit's trade-mark/injunction issue and could be litigated elsewhere.
  6. On conduct of the parties: The court observed conduct that prima facie supported the conclusion that a dissolution had occurred: Surjeet Singh began business under other names; tax records recognized the dissolution; the new firm was registered showing Kamaljit as partner; registration with Registrar of Firms occurred; and Surjeet's tax returns allegedly did not disclose share income (which he explained as non-information by partners). Taken together, these circumstances suggested the parties acted in furtherance of dissolution.
  7. Balance of convenience and interim relief rationale: Given that the plaintiffs had obtained registration of the trade name and that while a mark remains on the register it is undesirable for others to imitate it, the court found the balance of convenience lay with the plaintiff. Accordingly interim relief restraining the defendants from using the disputed trade name was appropriate, subject to the court's clarification that the order did not express any final opinion on issues to be decided in this suit or in related proceedings.

Holding and Implications

Holding: The court granted an interim injunction and restrained the defendants from using the trade name "Surjeet Book Depot" or "Surjeet Book Depot Pvt. Ltd." in their business during the pendency of this suit.

Implications:

  • Direct effect: The defendants are temporarily prohibited from using the specified trade names in their business pending final adjudication. This is an interim, interlocutory order and not a final adjudication on ownership or validity of rights.
  • No broad precedent: The court expressly clarified that nothing in the order should be taken as an expression of opinion on matters the parties may ultimately establish in this Court or in other pending litigations; the decision therefore does not purport to resolve the underlying disputes about the validity of the awards, the exact rights of the parties arising from them, or the final entitlement to the mark.

Note: This summary is confined to the statements and findings contained in the provided opinion and does not add or infer facts beyond that text.

Show full summary ...

    Surjeet Book Depot v. Surjeet Book Depot P Ltd. and Ors.

    JUDGMENT

    D.R. Khanna, J.

    1. In this suit brought by Surjeet Book Depot for permanent injunction restraining the defendants from infringing plaintiff's registered trade-mark and passing off and further for accounts, an application (I.A. 1013 of 1982) has been moved for interim injunction to the effect that the defendants be restrained during the pendency of the suit from printing, publishing and trading under the trade-mark 'Surjeet Book Depot (P) Ltd. and/or any other name which may be identical to and/or deceptively similar to that of the plaintiff. Briefly stated the plaintiff's case has been that the business known as 'Surjeet Book Depot' was started in the year 1950. It was initially owned by Harnam Singh. In 1957 he co-opted his brother Satnam Singh on his attaining majority as partner. Similarly in 1968 the third brother Surjeet Singh defendant No. 2 was taken in as partner in the business. Its nature was publication and sale of books. Some differences however later developed between the brothers and as such they appointed their father Sardar Lal Singh as Arbitrator. Lal Singh gave his award on 15.11.1976 in terms of which the partnership stood dissolved and the business and goodwill fell to the share of Harnam Singh and Satnam Singh. Surjeet Singh was given Rs. 1,00,000/- by them and in this manner he separated.

    2. On 16.11.1976, Harnam Singh and Satnam Singh claimed that they entered into another partnership alongwith Kamaljit son of Harnam Singh and started the same business in the same premises under the name Surjeet Book Depot. Partnership deed in this regard was executed by them on 11.1.1977. On 30.12.1977, this partnership applied for registration of the trade name Surjeet Book Depot under the Trade and Merchandise Marks Act. Notice of this published in the gazette on 16.2.1980 and finally the registration was allowed in part-B.

    3. The dissolution deed of 15.11.1976 of the partnership Surjeet Book Depot in which Surjeet Singh defendant No. 2 was also a partner has been filed on record and this bears the signatures of the brothers as well as their father Lal Singh. It purports to be Lal Singh's award.

    4. The case of Surjeet Singh who has now floated a company under the name Surjeet Book Depot (P) Ltd. from 26.10.1981 is that the dissolution did not take place by the document which the plaintiffs have placed on record. It rather narrated that Rs. 1,00,000/- had been paid to him which admittedly was not a fact. Both Harnam Singh and Satnam Singh could not arrange that amount and as such Lal Singh gave his award on the same evening a copy of which has been placed on record. The signatures on the first deed were said to have been obtained by Lal Singh at the morning time without apprising them of its true nature, and when it was discovered by him that the amount of Rs. 1,00,000 could not be paid by two brothers, he gave his detailed award relating to all their disputes on the same evening. This award was not filed in any court nor the signatures of any of the parties obtained on the same. The plaintiffs have disputed this award and have rather taken the stand that this document has been collusively created by Surjeet Singh and Lal Singh.

    5. Under this document also the business of Surjeet Book Depot was to pass to Harnam Singh and Satnam Singh. Surjeet Singh was to be allowed Rs. 1,00,000/- which was payable later. There is no dispute that the whole of this amount was later paid to Surjeet Singh. There were other clauses in this document which according to Surjeet Singh, his brothers have not abided, and as such have been declining to comply and stand by with the same. One of the classes was that they were to procure to Surjeet Singh a business premises in Nai Sarak so that he could operate his business from there and till this was done, he was entitled to continue his business in the premises where Surjeet Book Depot was running. He by then started business under the names Surjeet Publications, SBD Enterprises and Surjeet Book House.

    6. On 10.9.1981, Surjeet Singh instituted a suit in the Court of Sh. S. M. Gupta, Sub Judge, Delhi in which he sought partition of shop No. VI-4074-75 Nai Sarak Delhi, where the business, Surjeet Book Depot was carried on and also sought a declaration that he continued to be its partner. Rendition of accounts was also sought and a share in a plot at Industrial Area, G.T. Karnal Road Delhi was claimed. That suit is pending. However on an application moved by the defendants in that suit an interim order was made by the Court on 26.10.1981 restraining Surjeet Singh from holding himself out as partner of the firm Surjeet Book Depot. Surjeet Singh appealed against the same which is at present pending.

    7. Another suit was brought by Surjeet Singh in December 1981 against Harnam Singh, Satnam Singh and Kamaljit Singh for possession of Shop No. 4522-23 Nai Sarak Delhi which he claimed had been obtained by him on lease from the owner for running his business and from which he was forcibly dispossessed by the defendants, claiming that they had purchased the property. That suit is also pending.

    8. The defendants in the present suit have moved an application under sections 10 and 151 of the code of civil procedure and 111 of the trade & merchandise marks act seeking stay of the suit. It has firstly been pleaded that since the controversy with regard to the status of the plaintiff as partner in the business Surjeet Book Depot is pending in the court of Shri S.M. Gupta Sub Judge in an earlier instituted suit, this suit should be stayed as the defendant is again claiming in the present suit that there was no dissolution of the firm on 15.11.1976 and he continues to be a partner. Secondly it has been contended that he has already moved High Court for cancellation of the registration obtained by his brothers and nephew of the trade mark Surjeet Book Depot under Section 111 of the Trade and Merchandise Marks Act, 1958. This suit in the circumstances it is pointed out has to be stayed.

    9. Section 111 of the Trade and Merchandise Marks Act envisages stay of suit when a defendant moves the High Court for rectification of the registration of plaintiff's trade-mark. However, sub-section (5) empowers the Court to make an interim order by way of injunction, appointment of receiver etc., even while staying the suit. This suit which is otherwise now liable to be stayed because of the defendant having already moved this Court for rectification of the plaintiff's trade mark therefore does not preclude the Court from making an interim order.

    10. As regards section 10 C.P.C., one of the controversies involved in this suit is likely to be whether the dissolution of the partnership took place on 15.11.1976 as per deed filed by the plaintiff in this suit. That part of the controversy is already lying raised in the previously instituted suit before Shri S.M. Gupta, Sub Judge, Delhi. However, in that suit itself, Surjeet Singh has been restrained from holding himself but as partner of Surjeet Book Depot. When this has been the position, the proprietary of issue of interim injunction with regard to use of trade names, which cannot be agitated before Shri S.M. Gupta, now remains open before this Court.

    11. Next contention of the defendant that since his name happens to be Surjeet Singh, he cannot be prevented from using the same in his business in view of the provisions contained in Section 34 of the Trade and Merchandise Marks Act is of no avail to him as that section itself postulates bona fide user. If the plaintiffs can show that this element is lacking in the conduct of the defendant, they are entitled to interim relief.

    12. I now advert to two documents of the date 15.11.176 each of which is termed as the award of Lal Singh. The one of which the plaintiffs rely bears the signatures of all the then partners and also of Lal Singh, while on the other the signatures of none of the parties exist. Naturally the presumption arises in favour of the former. However there are certain infirmities in this deed which somewhat caste a cloud over it. Firstly this document stated that Rs, 1,00,000/- had already been paid to Surjeet Singh. It is not the case of any of the parties that the same was paid. Its payment was much later and at different stages, and this appears to be more in consonance with the second deed. Secondly in the first deed there is a mention of the division of the four rooms of the godown no. 4568 Daiwara Delhi and the attachment of a plan with the deed. No such plan has been produced nor is shown to exist. It is also not brought out how this division was in fact, if at all, effected. There is still another document which tends to show that this godown had entirely fallen to the share of Surjeet Singh. The same is a notice which the plaintiff's counsel had served upon Surjeet Singh of the date 17th July, 1981. This narration by the plaintiffs in this notice was clearly at variance with the first award of 15.11.1976. Rather it was more in consonance with the second award which Lal Singh purported to have given on the same day. This second award attempts to decide all the dispute inter se brothers and is quite comprehensive in distribution of assets and liabilities. Although prima facie it seems to be balanced award emanating from the father who finds his sons ralling apart, it is not for me to express any opinion on the same in this suit. (The controversy here is limited with regard to the trade mark). The factum and validity of the second award can be the subject matter of independent proceedings of the litigations already pending.

    13. Be that as it may even the second award purports to dissolve the firm Surjeet Book Depot and allot the business subject to certain rights to favour of Surjeet Singh qua Harnam Singh and Satnam Singh. Thus under any of the two documents, the firm appeared to have been dissolved and the business Surjeet Book Depot went to the share of these two brothers. Whether Surjeet Singh was left with any rights to use the shop for his business is not a matter gername in this suit. Similarly other rights ensuing to Surjeet Singh on the basis of this award are not the subject-matter of this suit. Suffice it to say that Rs. 1,00,000/- have already been received by Surjeet Singh for separating for this business though his rights, if any, of share in the sale proceedings of some of the books may be there.

    14. The course of conduct of the parties next also is pointer to dissolution. Firstly Surjeet Singh started business in three other names as aforesaid soon after the dissolution. Secondly in the income-tax records the dissolution of firm was got recognised and the new firm showing Kamaljit Singh as partner was got registered. It was also got registered with the Registrar of firms. Surjeet Singh on his part had not been showing the share income of this firm in his income-tax returns though according to him he had been mentioning in the returns that this was so because his other partners had not informed him of his share. These circumstances thus prima facie show that the parties seem to have acted in furtherance of the dissolution.

    15. When such has been the position and the plaintiffs now have got the trade name Surjeet Book Book registered in their name, it will be proper to restrain the defendants from using the same name or as the name of his limited company. Till the time rectification should hold the field. While a mark remains in the register, it is not desirable that the other should imitate. The balance of convenience is therefore in plaintiff's favour.

    16. The result therefore is that I restrain the defendants by way of interim injunction from using the trade name 'Surjeet Book Depot' or 'Surjeet Book Depot Pvt. Ltd' in his business. Before concluding it is clarified that nothing in this order will be treated as expression of opinion on the matters which the parties may ultimately establish in this Court or in other litigation pending before them.

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    Comments

    Surjeet Book Depot v. Surjeet Book Depot P Ltd. and Ors.
    (May 12, 1982)