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2022 Supreme(Bom) 1517

IN THE HIGH COURT OF JUDICATURE AT BOMBAY
A.S. Gadkari, J.
Chitali Bottling Limited - Appellant
Versus
Brihan Karan Sugar Syndicate & Ors. - Respondents
Appeal From Order (Stamp) No.3938 of 2020, Interim Application No.2694 of 2020
Decided On : 06-06-2022

Advocates appeared:
Dr. Abhinav D. Chandrachud, Advocate, Bernardo Reis, Advocate, Lalit Jhunjhunwala, Advocate, P.S. Patil, Advocate, Sanjeev Gorwadkar, Advocate, H.W. Kane, Advocate, Rohan Kadam, Advocate, Rahul Kadam, Advocate, A.H. Kane, Advocate, Apurva Gupte, Advocate, N. Sharma, Advocate, A. Bagwe, Advocate, Merin Mathew, Advocate, S. Vaze, Advocate

The court confirmed that a written agreement prevails over claims of oral licenses in matters of trademark use, reiterating that determinable contracts cannot be enforced for specific performance under the amended Specific Relief Act.

Headnote:(A) Code of Civil Procedure, 1908 - Order 43 Rule 1, Order 39 Rules 1 and 2 - Commercial dispute - Appellant sought interim injunction against Respondents over rights to manufacture and distribute specific liquor products. Court emphasized that the License agreement was determinable and upheld Respondents' right to terminate it. It found no prima facie case for the appellant, and dismissed the appeal. (Paras 19 and 20)

(B) Contractual rights - Nature of agreements - The court affirmed that oral licenses are not permissible under the Trade Marks Act when a written agreement exists. The License agreement explicitly outlined the conditions under which the appellant could use the trademarks, emphasizing the importance of adherence to the written contract terms. (Paras 19 and 11)

Facts of the case:
Appellant sought a declaration of rights over liquor products under a Share Purchase agreement and contested the validity of a License agreement dated 6th December, 2014, asserting that the Respondents wrongfully claimed termination based on product quality issues.

Findings of Court:
The trial court found no basis for the appellant’s claim of a perpetual right to use the trademarks and concluded that the License agreement was validly terminated.

Issues: The primary issues were the validity of the License agreement and whether the appellant had established a case for a temporary injunction against Respondents.

Ratio Decidendi: The court decided that once a valid written agreement exists, claims of oral agreements to the contrary hold no legal validity. The License agreement, defining terms and termination rights, precluded claims of perpetual licenses or rights to the trade marks.

Result: Appeal dismissed.

JUDGMENT

a.S. Gadkari, J. - appellant, Original Plaintiff, has preferred present appeal under Order 43 Rule 1 of the Code of Civil Procedure, 1908 (for short, `CPC') impugning the Order dated 25th February, 2020 passed by 19th Joint Civil Judge, Senior Division, Pune, below Exh-5 in Special Civil Suit No.95 of 2020, rejecting the said application filed under Order 39 Rule 1 and 2 of CPC by appellant for temporary injunction.

2 Heard Dr. abhinav Chandrachud, learned counsel for the appellant and Mr. Sanjiv Gorwadkar, learned senior counsel for Respondents. Perused entire record and Summary of Propositions filed by learned counsel for the respective parties.

3 appellant is the original Plaintiff in Special Civil Suit No. 95 of 2020 filed by it for declaration that, the appellant's company has the right to manufacture, supply and sale of the three country liquor products i.e. (i) Sakhu Santra Tango Premium (ii) Tango Punch and (iii) Tango Punch Santra; a decree of permanent injunction against Respondents thereby restraining them, either by themselves or through their agents, servants, assignees, attorneys or any other person acting on behalf of the Respondents from distributing, interfering with in any manner, the production, marketing and supply of the said three country liquor products by the appellant company; for interim injunction and for other consequential reliefs as more specifically mentioned in paragraph No.37 of the plaint.

4 It is the case of the appellant that, it is engaged into the business of manufacturing and trading of liquors in the State of Maharashtra since 2010. That, the Respondent No.1 is also engaged in the business of manufacturing of liquor in the State. Respondent Nos.4 and 5 are the Directors of Respondent No.1. Respondent No.2 is also a company engaged into the business of manufacturing of liquor in the State and Respondent Nos.3 and 4 are the Directors of Respondent No.2.

It is stated that, the Respondent No.1 is the owner, manufacturer and promoter of country made liquor by name and style (i) Sakhu Santra Tango Premium (ii) Tango Punch and (iii) Tango Panch Santra. That, the Respondents, with a view to expand their business and promote their products in the District of Pune approached the appellant in the beginning of 2014 through Respondent No.4 and proposed a business arrangement. It was proposed that, the Respondent No.2 would buy 33.34% shares of the appellant company so as to become part of the appellant at a nominal cost and share the profits from the business of the appellant company. It is the case of appellant that, the terms and conditions, more specifically mentioned in para No.5 of the plaint was an oral agreement which was concluded at the office of the appellant at Pune. That, in furtherance of Oral agreement between the parties, a 'Share Purchase and Share Holders agreement of Chitali Bottling Ltd.' (herein after referred to as 'Share Purchase agreement') was executed on 2nd august, 2014, by which 33.34% of appellant Company's shares i.e. 1667 equity shares were sold in favour of the Respondent No.2 at a nominal cost of Rs.1,66,700/- only, by the shareholders of appellant company. It is the further case of appellant that, the said agreement was given effect limited to the transfer of shares and other provisions of the said agreement were neither given effect to, nor enumerated in the articles of association of the appellant company. That, subsequent to the agreement dated 2nd august, 2014, the appellant company with the express consent and concurrence of the Respondents, applied for permission to manufacture and sale of Country Liquor label marks to the Commissioner, State Excise Department, Government of Maharashtra, for manufacturing and sale of country made liquor. The Commissioner, State Excise Department, vide its letter dated 18th November, 2014 granted approval to the Country Liquor label marks alongwith maximum label price for (i) Sakhu Santra Tango Premium (ii) Tango Punch and (i

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