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Gujarat High Court
Judgename :K.S.JHAVERI
BABUL PRODUCTS PVT.LTD. - Appellant
Versus
ZEN PRODUCTS - Respondent
C.A. 2887 of 2005
Decided On : 07/07/2005
Partnership Act, 1932 – Section 47 – Trade Marks rules, 2002 – Rules 82 and 83 – Appeal From Order is directed against order passed by Joint District Judge, in Civil Suit whereby the trial Court has rejected the Application – Held, Trial Court has found that plaintiff has not established prima fade case for grant of interim relief – Trial Court held that plaintiff balance of convenience is not in favour of plaintiff – Trial Court found that if the injunction is granted, defendant will suffer irreparable loss which cannot be compensated in terms of money – Court find that the view taken by the trial Court is just and proper and I do not find any merits in the matter – Appeal Dismissed (Paras 17, 18)
Based on the provided legal document, here are the key points regarding the case Babul Products Pvt. Ltd. vs. Zen Products:
Case Details * Court: Gujarat High Court * Case Number: C.A. 2887 of 2005 * Judgment Date: 07/07/2005 * Judge: K.S. JHAVERI, J. * Subject: Trademark Law - Infringement * Acts Referred: Partnership Act, 1932 (S.47, S.43); Trade Marks Act (S.28(2), S.52, S.24, S.12, S.59(2), S.53); Trade Marks Rules (R.83, R.82) (!)
Background and Parties * Appellant: Babul Products Pvt. Ltd. (Plaintiff), a private limited company established by partners of M/s. Babul Products partnership firm. * Respondent: Zen Products (Defendant), a company associated with Mukesh Majethia, a partner of the original firm. * History: The partnership firm handed over business to the Pvt. Ltd. company. A Registered User Agreement was executed allowing the company to use the "Babul" trademark. Disputes arose over management control and trademark registration between the Nanubhai (majority) and Maganbhai (minority) families. (!)
Legal Proceedings * Lower Court Order: The Joint District Judge (Fast Track Court No. 8), Vadodara, rejected the Appellant's application for an interim injunction in Civil Suit No. 6 of 2005 on 31st March, 2005. (!) * Appellant's Claim: The Appellant argued that as a registered user, they have the right to institute infringement suits under Section 59(2) of the Trade Marks Act and that an injunction is necessary to prevent irreparable loss. They claimed the defendant is a co-owner attempting to infringe rights. (!) (!) * Respondent's Defense: The Respondent argued that the partnership firm was dissolved, the license was terminated, and the Appellant is merely a permitted user not registered in the Register of Trade Marks. They claimed the Appellant approached the court with "unclean hands" due to suppression of material facts regarding earlier suits. (!) (!)
Key Legal Issues and Findings * Locus Standi: The Court held that the Appellant is merely a licensee and not a proprietor. Under Section 53 of the Partnership Act, only a partner (or their representative) can prevent another partner from using firm property; a licensee cannot claim this right against a co-proprietor. (!) (!) * Registered User Status: The Court noted that while the Appellant applied to be a registered user, they were not actually registered in the Register of Trade Marks. Therefore, they are not entitled to initiate proceedings under Section 52 of the Trade Marks Act. (!) (!) * Infringement: Since the Respondent (Mukesh Majethia) is a co-proprietor of the trademark, his use does not constitute infringement under Section 29. The Appellant's use is deemed use by the proprietor (the firm) and cannot be claimed as independent use. (!) (!) * Prima Facie Case: The Court found that the Appellant failed to establish a prima facie case because: * They are not the proprietor. * They are not a registered user. * The license was non-exclusive and the firm was dissolved, making consent from all partners impossible. * The Appellant acknowledged the trademark belongs to the partnership firm on their labels. (!) (!) * Balance of Convenience and Irreparable Loss: The Trial Court found the balance of convenience was not in favor of the Appellant and that an injunction would cause irreparable loss to the Respondent. The Appellant failed to show why this view should be overturned. (!) (!)
Judgment * Decision: The appeal was dismissed. The view of the Trial Court was found to be just and proper. (!) * Outcome: The interim relief granted by the Supreme Court was continued until 08/08/2005, and the main suit was directed to be disposed of within six months. (!)
( 1 ) THE present Appeal From Order is directed against the order dated 31st March, 2005 passed by Joint District Judge, (Fast Track court No. 8), Vadodara, below Exh. 5 in Civil Suit No. 6 of 2005, whereby the trial Court has rejected the Application Exh. 5.
( 2 ) THE appellant-plaintiff is a private limited company established by the partners of M/s. Babul Products, wherein there are two groups, majority and minority. The partnership firm has handed over complete business to the private limited company and the trade mark has been transferred by way of registered user to the present plaintiff. Since one of the partners and shareholder of the plaintiff-Company has allegedly tried to infringe the trade mark of the original partnership firm, the present plaintiff (hereinafter referred to as the registered user or the company) has initiated legal proceedings.
( 3 ) BEFORE proceeding with the matter, it is required to be noted the establishment of the partnership and family history as emerging from the record as under :"nanubhai Majethia opened a pan shop in the year 1955 in the name of Babul Pan Shop, Opposite Dhana Suthar Pole. Another Pan Shop near Kalupur post Office was also opened by him in 1958. From 1963, the said Nanubhai started making pan chatni and flavoured tobacco under the name babul 135 zafrani Zarda with a device of horse. The brother of Nanubhai, Maganbhai, was doing a job at that time. ""on 21st September, 1965, first partnership deed of M/s. Babul Products was executed with effect from 5th November, 1964, between Nanubhai and maganbhai. The firm was reconstituted from time to time with the sons of the said two brothers being inducted as partners and the last partnership deed is dated 1st April, 1998. ""on account of substantial expansion of business, the appellant Company- babul Products Pvt. Ltd. was incorporated on 11th December, 1987 and maganbhai was appointed as Chairman of the Company. On 16th October 1989, a registered user agreement was executed between M/s. Babul Products and M/ s. Babul Products Pvt. Ltd. with effect from 15th January, 1990 permitting the appellant-Company to use the trade marks of the firm. The said agreement was renewed from time to time i. e. on 1st April, 1996 and 19th March, 1999 for a period of 10 years and an automatic renewal for a further period of 10 years. Ultimately, in the year 1990, the appellant-Company established its own factory and started manufacturing pan masala and chewing tobacco which was sold under the brand name babul. ""rajendra Majethia, the son of Nanubhai, who was involved in the business with his father since 1981, particularly, for blending tobacco, was appointed as the Managing Director of the appellant-Company on 1st April, 1993. ""on 1st April, 1998, the final partnership deed of the firm, M/s. Babul products, was executed in which Nanubhais family had 67% share and maganbhais family had 33% share. ""on 29th September, 1998, the last allotment of shares of the appellant company was done pursuant to which the share holding pattern of the Company was 60% of Nanubhais family and 40% of Maganbhai and brothers family. ""in December, 1998, both Maganbhai and Nanubhai resigned as the chairman and the Director of the Company respectively. As stated above, on 19th March, 1999, fresh registered user agreement was executed between the firm, M/s. Babul Products, and the appellant-Company, granting the appellant-Company licence to use the registered trade marks of the firm. The duration of the agreement was for 10 years and automatic renewal was provided for a further period of 10 years. The agreement could be terminated by the proprietor after giving 60 days notice to the licensee. The agreement authorised the licencee to discover and prosecute infringement or passing off in relation to the trade marks, copyright matter and artistic works and take action against the same after obtaining consent of the proprietor. ""in the month of January, 2000,
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