Back
1999 Supreme(Del) 338
High Court Of Delhi
P.L.LAMBA - Appellant
Versus
AVTAR KISHAN GHAI - Respondent
Interim Application 3227 of 1996
Decided On : 05/01/1999
ADYA SRIVASTAVA, P.VENUGOPAL RAO, PARVIN ANAND
An assignment of a trademark is valid and can be admitted in evidence if it has been recorded in the trademarks register under Section 44(1) of the Trade and Merchandise Marks Act, 1958.
Headnote:
TRADEMARK - ASSIGNMENT - SECTIONS 38, 39, 40, 44(1), 44(2), 48 - SUBSTITUTION OF PARTIES - ORDER XXII RULE X, ORDER I RULE X CPC - ASSIGNMENT OF TRADEMARK "KWALITY" - APPLICATION FOR SUBSTITUTION OF PLAINTIFFS - OBJECTIONS RAISED BY DEFENDANTS - COURT HELD THAT ASSIGNMENT WAS VALID AND SUBSTITUTION COULD BE ALLOWED - HOWEVER, IMPLEADING OF LICENSEE COMPANY UNDER ORDER I RULE X CPC WAS ALSO ALLOWED.
Fact of the Case:
Plaintiffs, claiming to be joint proprietors of the trademark "kwality", filed a suit for permanent injunction restraining passing off and infringement of copyright, rendition of accounts or profits, and delivery. During the pendency of the suit, they applied for substitution of themselves with M/s. Digital Securities Pvt. Ltd. and M/s. Brooke Bond Lipton India Ltd. as plaintiffs, claiming that the trademark had been assigned to them. The defendants opposed the application, arguing that the assignment was not completed, was subject to rectification applications, was based on fraudulent settlement, and amounted to trafficking in trademark.
Finding of the Court:
The court held that the assignment was valid and substitution could be allowed. It noted that the assignment had been recorded in the trademarks register under Section 44(1) of the Trade and Merchandise Marks Act, 1958, and that the delay in filing the substitution application was justified as the assignment could not have been maintained until the entry was made in the register. The court also held that the filing of rectification proceedings did not debar the filing or pursuing of the suit, and that the objections relating to trafficking in the trademark could be raised by the defendants after substitution.
Issues: 1. Whether the assignment of the trademark "kwality" was valid and could be admitted in evidence. 2. Whether the delay in filing the substitution application was justified. 3. Whether the filing of rectification proceedings barred the filing or pursuing of the suit. 4. Whether the objections relating to trafficking in the trademark could be raised by the defendants after substitution. 5. Whether M/s. Brooke Bond Lipton India Ltd. could be impleaded as a plaintiff under Order I Rule X CPC.
Ratio Decidendi: 1. The court held that the assignment was valid and could be admitted in evidence as it had been recorded in the trademarks register under Section 44(1) of the Trade and Merchandise Marks Act, 1958. 2. The court held that the delay in filing the substitution application was justified as the assignment could not have been maintained until the entry was made in the register. 3. The court held that the filing of rectification proceedings did not debar the filing or pursuing of the suit. 4. The court held that the objections relating to trafficking in the trademark could be raised by the defendants after substitution. 5. The court held that M/s. Brooke Bond Lipton India Ltd. could be impleaded as a plaintiff under Order I Rule X CPC as they had a licence to use the trademark and some right would accrue in their favour during the pendency of the suit.
Final Decision: The court allowed the application for substitution of plaintiffs and directed the plaintiffs to file an amended plaint incorporating all the facts relating to the substitution. The defendants were allowed to file an amended written statement within four weeks thereafter.
( 1 ) THIS order shall dispose of an application under Order XXII Rule X read with Section 151 of the Civil Procedure Code filed in a suit for permanent injunction restraining passing off and infringement of copyright, rendition of accounts or profits and delivery etc.
( 2 ) THE plaintiffs S/sh. P. L. Lamba and Sunil Lamba claimed to be joint proprietors of the trademark "kwality" under registeration Nos. 435340,435341 and 435342 in class. . . . . According to the claim of the applicants, on 14th October, 1994, the trademark "kwality" under the said three registrations had been assigned, transferred and sold by the plaintiffs to M/s. Digital Securities Pvt. Ltd. , 135, Netaji Subhash Road, Bombay. On 15th November, 1994 the assignee applied on Form TM-24 to have the assignment recorded before the Registrar of Trademarks, which was allowed vide order dated 6th August, 1997. Accordingly, the name of the subsequent proprietor had also been advertised in the Trademark Joumal dated 1st November, 1997. The plaintiffs have also obtained certificates for use in legal proceedings in respect of trademark Nos. 435340, 435341 and 435342. M/s. Brooke Bond Lipton India Limited, Calcutta has been appointed licensed user of the trademark by M/s. Digital Securities Pvt. Ltd. vide agreement dated 31st December, 1994 vide annexure-2. Hence, prayer for substituting M/s. Digital Securities Pvt. Ltd. as plaintiff No. 1 in place of plaintiff Nos. 1 and 2 as the new proprietor of the trademark "kwality" and M/s. Brooke Bond Lipton India Ltd. as plaintiff No. 2.
( 3 ) THE application is being opposed on the ground that there was no completed assignment in favour of the alleged assignee as much as no such assignment has been recorded in the trademarks register under the provisions of Trade and Merchandise Marks Act (hereinafter called the "act" for short) and the Rules framed there under. There was no valid trademark. The assignment is subject to rectification application Nos. DEL-635,636 and 637 filed by M/s. Ghai Ice Cream (Pvt.) Ltd. which are pending before the Registrar of Trademarks. The assignment deed was based on fraudulent settlement. It is further contended by the defendants that the suit has been filed after the rectification applications have been filed against the plaintiffs by suppressing the material facts of filing rectification applications by making specific averment that no rectification application is pending. This fact was suppressed in view of the earlier split assignment. The assignment amounts to trafficking in trademark and is against public interest in terms of Sections 38, 39 and 40 of the Act. Provisions of Order XXII, Rule X, Civil Procedure Code are not applicable and only provisions under Order I, Rule X, Civil Procedure Code could apply at the most. The assignment being per se illegal, the plaintiffs could not be substituted at all, for Section 44 (2) of the Act clearly stipulates not to record assignment of disputed trademark. The facts of this case relevant for passing the order under Order XXII, Rule X, Civil Procedure Code are different from the facts of Suit No. 633/94. Since the rectification proceedings are pending, no benefit can be taken by relying on the order passed in Suit No. 633/94. Complete details of the assignment deed have not been given, for strategic alliance agreement has not been filed. The assignment deed is neither properly stamped in view of the consideration of Rs. 3. 70 crores nor it is signed by the alleged assignee nor it discloses proper verification thereof. Though the alleged assignment took place on 14th October, 1994, but substitution application has been filed in April, 1996 after along delay. On the aforesaid grounds it is submitted that the application as such is liable to be rejected.
( 4 ) I have heard Learned Counsel for the parties and gone through the record.
( 5 ) IN so far as the delay is concerned, there is no doubt about the fact that if the assignment took p
