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2020 Supreme(Del) 867
IN THE HIGH COURT OF DELHI AT NEW DELHI
V. Kameswar Rao, J.
Anil Rathi - Appellant
Versus
Sanjog Steels Pvt Ltd. & Ors. - Respondent
Civil Suit (Comm) No. 603 of 2019; Interlocutory Application No. 15128 of 2019, 1132 of 2020, 1269 of 2020, 2275 of 2020, 2276 of 2020, 2467 of 2020, 260 of 2020, 4184 of 2020, 4185 of 2020; C C P (O) No. 73 of 2019
Decided On : 15-09-2020
Sudhir Chandra, Advocate, Sagar Chandra, Advocate, Srijan Uppal, Advocate, Jyotsna Arora, Advocate, R.K. Rajwanshi, Advocate, Diva Arora, Advocate, Pritika Kohli, Advocate, Tanmaya Mehta, Advocate, Subhash Chawla, Advocate
The Court held that the license granted to Defendant No. 9 was not within the stipulated number of 4 licenses, as per the MoU and the Trust Deed. The Court also held that Defendant No. 9 did not have the requisite shareholding directly or indirectly in the company, as per the terms of the MoU. Further, the Court held that the management and control of the licensee company ought to be with the respective group/subgroup of the Rathi Foundation, which was not the case with Defendant No. 9.
Headnote:
The Court dismissed the application filed by Defendant No. 9 to vacate the ex-parte ad-interim injunction granted by the Court in favor of the Plaintiff, restraining Defendant No. 9 from manufacturing, exporting, marketing, offering for sale, selling, advertising, or in any manner dealing in steel bars, common metals and their alloys; metal building materials; transportable buildings of metal; materials metal for railway tracks; non-electric cables and wires of common metal; ironmongery, small items of metal hardware; pipes and tubes of metal; safes; goods of common metal under the trade mark ''RATHI'' or from adopting any other mark or label which is identical or deceptively similar to plaintiffs registered trade mark ''RATHI'' which shall amount to infringement of the said trademark, till the next date of hearing.
Fact of the Case:
Defendant No. 9 (Amba Shakti Steels Ltd.) moved the present application under Order 39 Rule 4 of CPC to vacate the ex-parte ad-interim injunction granted by the Court in favor of the Plaintiff, restraining Defendant No. 9 from manufacturing, exporting, marketing, offering for sale, selling, advertising, or in any manner dealing in steel bars, common metals and their alloys; metal building materials; transportable buildings of metal; materials metal for railway tracks; non-electric cables and wires of common metal; ironmongery, small items of metal hardware; pipes and tubes of metal; safes; goods of common metal under the trade mark ''RATHI'' or from adopting any other mark or label which is identical or deceptively similar to plaintiffs registered trade mark ''RATHI'' which shall amount to infringement of the said trademark, till the next date of hearing.
Finding of the Court:
The Court found that the license granted to Defendant No. 9 was not within the stipulated number of 4 licenses, as per the Memorandum of Understanding (MoU) and the Trust Deed. The Court also found that Defendant No. 9 did not have the requisite shareholding directly or indirectly in the company, as per the terms of the MoU. Further, the Court found that the management and control of the licensee company ought to be with the respective group/subgroup of the Rathi Foundation, which was not the case with Defendant No. 9.
Issues: 1. Whether the license granted to Defendant No. 9 was within the stipulated number of 4 licenses, as per the MoU and the Trust Deed? 2. Whether Defendant No. 9 had the requisite shareholding directly or indirectly in the company, as per the terms of the MoU? 3. Whether the management and control of the licensee company ought to be with the respective group/subgroup of the Rathi Foundation?
Ratio Decidendi: The Court held that the license granted to Defendant No. 9 was not within the stipulated number of 4 licenses, as per the MoU and the Trust Deed. The Court also held that Defendant No. 9 did not have the requisite shareholding directly or indirectly in the company, as per the terms of the MoU. Further, the Court held that the management and control of the licensee company ought to be with the respective group/subgroup of the Rathi Foundation, which was not the case with Defendant No. 9.
Final Decision: The Court dismissed the application filed by Defendant No. 9 to vacate the ex-parte ad-interim injunction granted by the Court in favor of the Plaintiff, restraining Defendant No. 9 from manufacturing, exporting, marketing, offering for sale, selling, advertising, or in any manner dealing in steel bars, common metals and their alloys; metal building materials; transportable buildings of metal; materials metal for railway tracks; non-electric cables and wires of common metal; ironmongery, small items of metal hardware; pipes and tubes of metal; safes; goods of common metal under the trade mark ''RATHI'' or from adopting any other mark or label which is identical or deceptively similar to plaintiffs registered trade mark ''RATHI'' which shall amount to infringement of the said trademark, till the next date of hearing.
JUDGMENT
V. Kameswar Rao, J. - I.A. 15128/2019 (under Order XXXIX Rule 1 & 2 read with Section 151 of the CPC filed on behalf of the plaintiff) and
I.A. 1269/2020 (under Order XXXIX Rule 4 read with Section 151 of the CPC filed on behalf of defendant No.9.)
I.A. 1269/2020
1. The present application has been filed by defendant No. 9 with the following prayers:
"It is therefore most humbly prayed that in facts and circumstances of this case and n view of the submissions made in the present application and in the interest of Justice, the Orders of ex-party ad-interim injunction as passed by this Hon''ble Court on 31/10/2019 be kindly recalled/ set aside and vacated
And/ or any other order(s) as deemed fit and proper in the facts and circumstances of this case be also passed in favour of the defendants and against the plaintiff."
2. Before dealing with the application, I shall state the facts in brief. The Rathi family is engaged in the business of manufacture and trading of various steel products including Steel bars, TMT bars etc., for more than 40-50 years. In and around 1942, the parent company, Rathi Steel Rolling Mills (RSRM, for short) was set up by Gordhan Das Rathi, Kanihya Lal Rathi and Hari Kishan Rathi in Loni Road, Shahdara, Delhi. In 1968, RSRM entered into a technical collaboration with M/s Tor Isteg Steel Corporation, Luxembourg through Tor Steel Research Foundation in India for manufacturing cold twisted deformed bars better known as TOR Steel Bars. The Company started rolling its Tor steel under the trademark ''RATHI''.
3. However, in 1969 RSRM was split into two units namely M/s G.D. Rathi Steels Ltd., and M/s K.L. Rathi Steels Ltd. Both the units were rolling the Tor steel with the brand ''RATHI''. M/s G. D Rathi Steels Ltd., was owned by the sons of Late G. D. Rathi, whereas, M/s K.L. Rathi Steel Ltd., owned by C.R. Rathi and family and H.K. Rathi and family. In the year 1970, the sons of Late G.D. Rathi established an Electric Arc furnace plant in Ghaziabad (Uttar Pradesh) in the name of M/s Rathi Ispat Ltd., and in the year 1972, a rolling mill in the name of M/s Rathi Udyog Ltd. in Ghaziabad (U.P). C.R. Rathi and H.K. Rathi established a steel plant under the name of Rathi Super Ltd. in Ghaziabad and Rathi Alloy Steel Ltd. in Alwar, Rajasthan.
4. M/S K.L. Rathi Steel Limited applied for and obtained registration of trade mark ''RATHI'' under registration no. 309435 in Class 6 for Ribbed T, Rounds, Squares, Flats, Joists, Angles, Channels and Rerolled Sections of Common Metal on October 22, 1975. Rathi Foundation was recorded as the subsequent proprietor of the said trademark ''RATHI'' in 1996.
5. In the year 1986 there was a split in the G. D. Rathi Family. M/s G.D. Rathi Steel Ltd. was owned by P.R. Rathi and his sons and K.K. Rathi and his sons while M/s Rathi Ispat Ltd., and Rathi Udyog Ltd., were owned by P.C. Rathi and family and Arun Kumar Rathi & family and Anil Rathi & Family.
6. The members of the Rathi Family with the objective of retaining rights and safeguarding the interest of the family in the trademark ''RATHI'' against the outsiders entered into various Memorandum of Understandings and Trust Deeds pursuant to which two Trusts being RATHI FOUNDATION and RATHI RESEARCH CENTRE were created by the family members.
7. A Memorandum of Understanding dated June 24, 1995 (''MoU'', for short) was executed with the objective of ensuring a consistent quality of their products manufactured in their own rolling mills under the trademark ''RATHI''. It was agreed that the Rathi Family shall form a Trust which shall be called the ''RATHI FOUNDATION''. The senior most Trustee of the group/subgroup shall have the power to issue the license to use the Trade mark ''RATHI'' on behalf of the Rathi Foundation to the company/firm of his group/sub-group provided the company/firm fulfils the conditions laid down in the MoU and Trust Deed. Clause 13 of the Trust Deed of Rathi Foundation provides that Contravention of any
