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1998 Supreme(Del) 674

High Court Of Delhi
RAJNI DUA - Appellant
Versus
BHUSHAN KUMAR - Respondent
Decided On : 09/01/1998

A family settlement agreement is valid and enforceable if it is entered into by all the parties voluntarily and without any undue influence or coercion, and if it is supported by consideration.

Headnote:

FAMILY SETTLEMENT - TRADE MARK/LOGO - T-SERIES - EXCLUSIVE USE - INJUNCTION - FAMILY ARRANGEMENT - HARMONY - AMITY - GOODWILL - RESTRICTION ON USE - PERPETUAL LICENSE - REVOCATION - QUALITY CONTROL - LICENSE AGREEMENT - PROPRIETORSHIP - LEASE - DISTINCTION - INJUNCTION - EXTREME HARDSHIP - COMPELLED CIRCUMSTANCES - STATUS QUO - BALANCE OF CONVENIENCE - IRREPARABLE INJURY.

Fact of the Case:

The dispute arose from a family settlement agreement dated 21st February, 1998, between the plaintiffs (plaintiffs 1 and 2) and the defendants (defendants 1 to 4), who were closely related. The plaintiffs alleged that the defendants were interfering in their business and use of the trade mark/logo "t-Series" on their products, in violation of the settlement agreement. The defendants claimed that the plaintiffs were mere licensees of the trade mark/logo and that the license was liable to be revoked at will. They also alleged that the plaintiffs had failed to maintain quality control and had damaged the reputation of the trade mark/logo.

Finding of the Court:

The court found that the family settlement agreement was valid and enforceable and that the plaintiffs had an exclusive perpetual license to use the trade mark/logo "t-Series" for the products they had been manufacturing and selling during the lifetime of Mr. Gulshan Kumar. The court also found that the defendants had failed to establish that the plaintiffs had breached the terms of the license agreement or that they had failed to maintain quality control.

Issues: 1. Whether the family settlement agreement was valid and enforceable. 2. Whether the plaintiffs had an exclusive perpetual license to use the trade mark/logo "t-Series" for the products they had been manufacturing and selling during the lifetime of Mr. Gulshan Kumar. 3. Whether the defendants had breached the terms of the license agreement. 4. Whether the plaintiffs had failed to maintain quality control.

Ratio Decidendi: 1. The court held that the family settlement agreement was valid and enforceable because it was entered into by all the parties voluntarily and without any undue influence or coercion. The court also found that the agreement was supported by consideration, as the plaintiffs had agreed to relinquish their shareholdings in the various companies and firms under the control of the defendants in exchange for the exclusive use of the trade mark/logo "t-Series" for the products they had been manufacturing and selling. 2. The court held that the plaintiffs had an exclusive perpetual license to use the trade mark/logo "t-Series" for the products they had been manufacturing and selling during the lifetime of Mr. Gulshan Kumar because the family settlement agreement clearly stated that the plaintiffs would continue to use the trade mark/logo for those products. The court also found that the defendants had failed to establish that the plaintiffs had breached the terms of the license agreement or that they had failed to maintain quality control.

Final Decision: The court granted a permanent injunction restraining the defendants from interfering in the plaintiffs' use of the trade mark/logo "t-Series" for the products they had been manufacturing and selling during the lifetime of Mr. Gulshan Kumar. The court also restrained the defendants from using the trade mark/logo "t-Series" in relation to those products.

Dalveer Bhandari, J.

( 1 ) THE dispute among the family members over the use of trade mark/logo "t-Series" is the foundation of this litigation.

( 2 ). Plaintiffs 1 and 2 are very closely related to defendants No. 1 to 4. The present litigation has to be appreciated in the prospective of a litigation inter se family members. Admittedly, late Mr. Gulshan Kumar was the chief architect of this family. He alone ought to get the entire credit for developing the immense family business. Unfortunately he died in very tragic circumstances on 12th August, 1997. The dispute involved in this litigation also started immediately after his demise. It is aband untly clear that during his life-time late Mr. Gulshan Kumar kept the family members in good discipline and the entire family worked as a team. Late Mr. Gulshan Kumar conceived of trade mark, logo and artistic works "t-Series". The business was initially started in a humble manner with the trade mark and logo T- Series but within a short span of time it flourished immensely. Late Mr. Gulshan Kumar acquired the name of king of cassette industries in India. The Super Cassettes Industries was the first business venture of the family which was carried with the trade mark and logo "t-Series" but later on because of the tremendous success in the business, the family business was diversified and they started manufacturing other goods with the same trade mark and logo "t-Series".

( 3 ). Plaintiff No. 2 is the brother and plaintiff No. 1 is the sister-in-law of late Mr. Gulshan Kumar. During the life-time of late Mr. Gulshan Kumar, "gopal Soap Industries", was started by plaintiff No. 2, Gopal Krishan in the year 1988. It started manufacturing, marketing and selling detergent Powder, Detergent Cake, Soaps , etc. Plaintiff No. 1, Mrs. Rajni Dua also in the life-time of late Mr. Gulshan Kumar started manufacturing dhoop, Agarbatti, Havan Samagri and allied goods since 1996. The plaintiffs since its inception, started using the trade mark/logo "t- Series". It may be pertinent to mention that only plaintiffs No. 1 and 2 in the entire family have been manufacturing the aforesaid goods and no one else has manufactured or marketted these items till date. According to the plaintiffs, the defendants started creating serious problems in the day-to-day functioning of their business and the plaintiffs have been compelled to approach this Court.

( 4 ). Admittedly, plaintiffs 1 and 2 are the proprietors of plaintiff Nos. 4 and 3 respectively. According to the plaintiffs all the disputes and controversies, among the family members,were finally settled by a family settlement dated 21st February, 1998. It is submitted on behalf of the plaintiffs that according to the letter and spirit of the agreement, the plaintiffs shall continue to carry on their business exclusively. According to the settlement, the plaintiffs were to have a perpetual licence for the exclusive use of the trade mark/logo "t-Series" only with regard to the aforementioned products manufactured by them. In consideration of the above perpetual licence or arrangement, plaintiff Nos. 1 and 2 would relinquish their share-holdings in the various companies and firms, which are under the control of the defendants, namely. Super Cassettes Pvt. Ltd, Laxmi Video Private Limited, Tony Electronics Pvt. Ltd. , Mandakini Acqua Pvt. Ltd. , Super Electronics, etc. Plaintiffs 1 and 2 were to further lease out some properties in their possession to defendant No. 5. It is incorporated in the plaint that all these obligations have been fully carried out by the plaintiffs as per the agreement.

( 5 ). The further case of the plaintiffs is that defendant Nos. 1 and 5 in complete violation and utter disregard to the family settlement dated 21st February, 1998 addressed a legal notice to the plaintiffs on 26th February, 1998. Defendants I and 5 called upon the plaintiffs to stop using the trade mark/logo "t-Series" on their products. However, the settlement talks,





































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