Judgement of the day: Haldiram Bhujiawala v. Anand K. Deepak
M. Jagannadha Rao and A.P. Misra
The facts were that one Ganga Ram used to carry a business under a trademark ‘Haldiram Bhujiawala’ since 1941 and in 1965 he entered into partnership with his two sons’ i.e., Moolchand and Shiv Kishan and his daughter-in-law Kamla Devi to carry on business under the same name and the firm applied for registration in 1972. In 1974, the firm was dissolved and trademark fell exclusively to Moolchand for the whole country except West Bengal and Kamla Devi was given ownership for trademark in West Bengal. Ganga Ram died in 1980 and Moolchand in 1985, leaving behind four sons out of which three entered into partnership and running a shop in New Delhi. Meanwhile, R.S. Agarwal (husband of Kamla Devi) applied for registration in Calcutta claiming to be full owner of the trademark without disclosing the deed. Plaintiff-respondent came to know about the violation of their trademark when the defendant-appellant opened a shop in New Delhi and filed a suit.
The Hon’ble Supreme Court, by putting reliance on the judgment of Raptakos Brett & Co. Ltd. Vs. Ganesh Property [(1998) 7 SCC 184], stated that Section 69 (2) of the Indian Partnership Act, 1932 cannot bar the enforcement of a statutory right or a common law right by way of a suit by an unregistered firm. The passing-off action is a common law action based on torts and not on contracts, therefore, a suit for perpetual injunction to restrain the defendant not to pass-off the goods by using plaintiff’s trademark is not barred under Section 69 (2) of the said act. Also the Court stated that if the reliefs of permanent injunction and damages are being claimed on the basis of registered trademark then the suit is to be treated on one based on statutory right and the same is not barred under Section 69 (2) of the act.
Further the Court, while deciding interpreted the bare provision of Section 69 (2) of the act which signifies that the right which is sought to be enforced by the unregistered firm and the right which is barred is the one arising out of the contract with the third party defendant during the course of business transactions. Court has cleared certain things while deciding i.e., (i) the contract by the plaintiff firm must be one only with the third party defendant and not with anybody else, (ii) the contract by the unregistered firm referred to in Section 69 (2) must not only be with the third party defendant but also it should be entered into by the plaintiff firm in the course of business dealings. Also the court has correctly interpreted the phrase ‘arising out of a contract’ which means those contracts entered into by the plaintiff firm in the course of business transactions. The intention is to protect those who were in commercial business with such a partnership firm as the third parties, who deal with partners, ought to know the name of the firm before they deal with them.
The Court held that when a suit is filed for the enforcement of certain rights arising out of a contract entered into by the unregistered firm with the third parties in the course of business transactions, the same is not barred under Section 69(2) of the Indian Partnership Act, 1932.