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2025 Supreme(Mad) 3844

IN THE HIGH COURT OF JUDICATURE AT MADRAS
P.VELMURUGAN, J.
Quality Chef Agro Foods Pvt.Ltd. - Appellant 
Versus 
ADF Trading Private Limited - Respondent  
Civil Suit (Comm.Div.) No. 286 of 2018
Decided on : 03-01-2025


Advocates:
Advocate Appeared:
For the Appellant : Mr.A.Prabhakara Reddy
For the Respondent: Mr.Akhil Akbar Ali

The court determined that the plaintiffs do not possess exclusive rights to use the trademark 'ROYALCHEF', as the previous agreements did not transfer absolute ownership but allowed their use only under specific conditions.

Headnote:(A) Trademarks Act, 1999 - Sections 134, 91, and 92 - Dispute between business partners regarding ownership and use of the trademark 'ROYALCHEF' in Qatar. Plaintiffs sought injunction against defendants' use of the trademark asserting exclusive rights via settlement agreements. (Paras 1, 16, 20)

(B) Exclusive Use of Trademark - Court emphasized irrevocability of license to use trademark only for goods exported from India to Qatar, not absolute proprietorship over the trademark. (Paras 16.2, 19)

(C) Defendants' Rights - Defendants denied allegations of passing-off, claiming legal entitlement to use trademark due to ownership and registration. (Paras 3.2, 22.1)

Facts of the case:
Plaintiffs claimed exclusive use of trademark 'ROYALCHEF' resulting from a previous partnership settlement with the fourth defendant; defendants countered with claims of legitimate ownership and trademark registration in compliance with prior agreements.

Findings of Court:
Court found plaintiffs failed to establish exclusive rights to the trademark, affirming that defendants rightfully continued to use it.

Issues: 1) Exclusive rights associated with settlement and trademark usage; 2) Validity of transfer of trademark rights to the fourth defendant; 3) Legality of defendants’ trademark usage.

Ratio Decidendi: To claim passing-off or similar reliefs, plaintiffs must prove exclusive rights and goodwill, which they failed to do.

Result: Suit dismissed, with no order as to costs.

Table of Content
1. trademark assignment and licensing must be adhered to strictly. (Para 1 , 2 , 3)
2. claims of trademark infringement must establish the correctness of alleged rights. (Para 4 , 5 , 10)
3. licensing agreements restrict owners and licensees' rights based on their explicit terms. (Para 16 , 17 , 18 , 19 , 20)

JUDGMENT :

The suit is instituted by the plaintiffs against the defendants seeking for permanent injunction restraining the defendants from violating their exclusive rights in the use of the mark ''ROYALCHEF'' in the territory of Qatar by exporting their rice and other food products from India under the mark ''ROYALCHEF'' or any other mark which is identical or deceptively similar to the mark ''ROYALCHEF'', so as to result in passing-off and acts of unfair competition along with delivery up of offending goods and materials, rendition of accounts/damages etc.

2. The averments made in the plaint are as follows:-

2.1. The first plaintiff is a Company incorporated under Part IX of the Companies Act, 1956 and is a continuation of its erstwhile partnership firm, viz., M/s. Asian Exports. The plaintiffs have been in the business of processing, manufacturing, packing, marketing and exporting food products since the year 1979. One A.S.Moorthy/third plaintiff herein through its company/affiliates, is currently engaged in the export of Basmati and Non-Basmati Rice, spices, curry powder, edible oil, cereal products, etc., and had established a factory at Southpakkam Village, Red Hills, Chennai. All these products are exported to various countries under the brand name ''QUALITY CHEF'', ''MATHANGI'' ''KISHO'', ''CHITTI'' etc. The plaintiffs have built up a good reputation and goodwill for all their products over the years under the said distinctive trademarks.

2.2. Subsequently, the third plaintiff, along with the fourth defendant viz., M.M.Sheik Dawood formed a partnership firm, vide Deed of Partnership dated 15.07.1985 in the name and style of M/s.Asian Exports [1st plaintiff's predecessor-in-title]. During the course of business, the third plaintiff, honestly conceived and adopted the mark ''ROYALCHEF'' and the same was put to use through the partnership firm M/s.Asian exports since 1985. The fourth defendant was in-charge of operating the said business from Dubai under the name of Alia Mohammed Trading Co. (L.L.C) - the second defendant herein. In the year 2006, the fourth defendant retired from the partnership firm on 30.09.2006 and the said partnership firm was re-constituted by inducting Mrs.Sakthivinayaga Lakshmi, wife of third plaintiff, as a partner, by a deed of partnership dated 01.10.2006 and the business of the said partnership firm M/s. Asian Exports was continued by the new partners. Upon retirement from the partnership firm, the fourth defendant made several attempts to infringe the trademark of the erstwhile partnership firm M/s.Asian Exports. Hence, the erstwhile partnership firm, M/s. Asian Exports was constrained to file a suit in C.S.No.135 of 2007 before this Court and this Court granted an order of injunction on 22.02.2017, which was also made absolute, thereby, restraining the fourth defendant and his allies therein from carrying on business under the trademark ''ROYALCHEF''. Even when the suit for infringement was pending before this Court, the fourth defendant had violated the orders passed in C.S.No.135 of 2007 and still continued to interfere with the business of the partnership firm M/s. Asian Exports with a view to cause hardship and prejudice to the partners of the said firm.

2.3. Subsequently, M/s.Asian Exports was constrained to approach this Court in C.S.No.170 of 2007, inter alia, seeking an order of permanent injunction restraining the fourth defendant herein from in any manner interfering with the peaceful conduct of the business of the partnership firm. It is stated that the third plaintiff had to undergo severe mental agony due to the betrayal and back stabbing at the hands of the fourth

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