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S. Mohamed Ismail and ors. Vs. M.S. Mohamed Essa and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtChennai High Court
Decided On
Case NumberSecond Appeal No. 1164 of 1971
Judge
Reported inAIR1974Mad301
ActsTrade and Merchandise Marks Act, 1958 - Sections 105; Code of Civil Procedure (CPC), 1908 - Order XLI, Rules 4 and 33
AppellantS. Mohamed Ismail and ors.
RespondentM.S. Mohamed Essa and ors.
Cases ReferredIn Nirmala v. Balaichand
Excerpt:
.....business in similar goods only to induce customers of plaintiffs for himself - held, plaintiffs entitled to injunction. - - once it is held that defendants 3 and 4 are the owners of 'saleh machinery stores',the suit has to fail automatically since they are not parties to ex......or persons exercising ordinary caution as the business carried on by m.m. mohammed saleh.' the name saleh machinery stores is also not deceptively similar to the name of m.m. mohammed saleh. therefore, respondents 1 and 2 (plaintiffs) would not be entitled to the permanent injunction prayed for.'the result was the suit was dismissed with costs. on the question of benami, the lower appellate court found that the business 'saleh machinery stores' belongs only to the third respondent (first defendant) and not to appellants 2 and 3 (defendants 3 and 4) and that appellants 2 and 3 (defendants 3 and 4) are mere benamidars for the 3rd respondent (first defendant).' as regards the contention raised by defendants 2, 3 and 4 questioning the jurisdiction of the court in view of section 105(c).....
Judgment:

1. The plaintiffs in the suit are the appellants. Their suit was for a permanent injunction restraining the defendants from opening and carrying on a business in city limits similar to that of the plaintiffs under the name and style of 'M. M. Mohammed Saleh' or any other name which is deceptively similar to it. First plaintiff and the first defendant are brothers. They were conducting a registered partnership at No. 1-79 Sembudoss St., G.T. Madras. The first defendant retired from the partnership. Under clause (8) of the partnership deed, the outgoing partner shall not be entitled to the goodwill or to any payment on account of the goodwill and shall not be entitled to open a similar business in the name of 'M. M. Mohammad Saleh' in the City limits. The first defendant left the city and opened a shop at Madurai. Subsequently, he returned to Madras and has opened a similar business in hardware materials at No. 15 Sembudoss St, under the name and style of 'Saleh Machinery stores'. The second defendant is the firm which was started with the funds of the first defendant. The third defendant is the wife and the fourth defendant is the brother-in-law of the first defendant; they were merely benamidars and name-lenders for the first defendant. The first defendant is carrying on business and he should not be permitted to circumvent the clause in the partnership deed. On these allegations, the first plaintiff impleading his firm 'M. M. Mohammed Saleh' as the second plaintiff, brought the suit for permanent injunction.

2. The first defendant, in his written statement, contended that under the deed of partnership he was prohibited only from carrying on similar business under the name and style of 'M.M. Mohammed Saleh', that he has not committed any breach of the agreement, that the first defendant is not carrying on any business and that the agreement between the first defendant and the first plaintiff will not bind any one else. His further contention was that even otherwise the condition laid down is opposed to law and natural justice.

3. Defendants 2 to 4, in their written statement, contended that they were not aware of the business carried on by the first plaintiff and the first defendant. They denied the allegation that they are merely name-lenders. Their further contentions were that the business carried on by them is not similar to the firm of the first plaintiff, that they are entitled to carry on the business in any name or in any commodity or in any place and that the first plaintiff is not entitled to any relief and these defendants are entitled to compensatory costs.

4. The trial Court, after framing the necessary issues, and on the evidence adduced, came to the conclusion that clause (8) of the partnership deed (Ex. A.1) prohibiting the outgoing partner from carrying on similar business in the city under the name and style of 'M. M. Mohammed Saleh' is a resonable restriction and enforceable, as the first defendant had released his rights in the partnership and walked out. It also found that the first defendant advanced his moneys for starting 'Saleh Machinery Stores'; a business in pipes, pipe materials, motor pump sets etc, and was responsible for starting that business and has been attending to it, and that defendants 3 and 4 are benamidars for the first defendant. The trial Court also found that the first defendant started the business under the name and style of 'Saleh machinery Stores' in similar goods, only to induce the customers of the plaintiffs to become his customers by deception and thereby attract and appropriate the business of the plaintiffs for himself and that the plaintiffs are entitled to the injunction. On these findings, the trial Court decreed the suit with costs.

5. Aggrieved by the said decision, defendants 2, 3 and 4 preferred A.S. 406 of 1969 on the file of the first Additional Judge, City Civil Court, Madras. The lower appellate Court allowed the appeal on the findings and observations-

'There is identity of the business carried on under the two names. But there is no identity in the similarity of the names. Nor is there any evidence to show that any confusion is likely to be created or apprehended by the business carried on under the name of Saleh Machinery Stores being thought of by any person or persons exercising ordinary caution as the business carried on by M.M. Mohammed Saleh.' The name Saleh Machinery Stores is also not deceptively similar to the name of M.M. Mohammed Saleh. Therefore, respondents 1 and 2 (plaintiffs) would not be entitled to the permanent injunction prayed for.'

The result was the suit was dismissed with costs. On the question of benami, the lower appellate Court found that the business 'Saleh Machinery stores' belongs only to the third respondent (first defendant) and not to appellants 2 and 3 (defendants 3 and 4) and that appellants 2 and 3 (defendants 3 and 4) are mere benamidars for the 3rd respondent (first defendant).' As regards the contention raised by defendants 2, 3 and 4 questioning the jurisdiction of the Court in view of Section 105(c) of the Trade and Merchandise Marks Act, 1958, the lower appellate Court held that the case on hand is not an action for passing off any goods as the goods of the plaintiffs and that therefore for trial Court had jurisdiction to entertain the suit.

6. Aggrieved by the decision of the lower appellate Court, the plaintiffs have preferred this second appeal. Sri T. R. Ramachandran, the learned counsel appearing for the appellants, contended that in view of the fact that the first defendant had not appealed against the decision of the trial Court which found that he (first defendant) had infringed clause (8) of the partnership deed, that decision of the trail Court as against him has become final; in view of the fact that the lower appellate Court has also found that the first defendant is the real owner of 'Saleh Machinery Stores', it ought to have dismissed the appeal, confirming the decree of the trial Court. Sri T. R. Ramachandran further contended that the right put forth by defendants 2, 3 and 4 is independent of that of the first defendant and as such they can succeed only if they can establish their independent right in 'Saleh Machinery Stores'; but once it is held that the said business is that of the first defendant, the decision arrived at by the trial Court to the effect that such a business infringes clause (8) of Ex. A.1 has become conclusive as against the first defendant. Sri R. R. Ramachandran also cited to his support decisions, which I will consider presently.

7. Sri Venkatachalapathi, the learned counsel appearing for the 1st defendant (first respondent herein) contended that the common defence of all the defendants is that there is no similarity in the names of the two businesses: 'M.M. Mohammed Saleh' and 'Saleh Machinery Stores' and that as such the mere fact that the defendant had not preferred an appeal against the decision of the trial Court the Court is not precluded from giving a finding in appeal as regards similarity in the names. According to Sri Venkatachalapathi, learned counsel for the first defendant, the question of similarity is a common defence raised by all the defendants and that as such the lower appellate Court has jurisdiction to go into this question and render a decision thereon which will definitely enure to the benefit of all the defendants including the first defendant. The learned counsel brought to his support the provisions of Order XLI, Rule 4 and Rule 33, Civil P.C.

8. Sri Balathandapani, the learned counsel for the defendants 3 and 4 (respondents 3 and 4 herein), while stressing the point submitted by Sri Venkatachalapathi, also submitted that his clients are not benamidars for the first defendant and that in any event the suit was in effect one under Section 105(c) of the Trade and Merchandise Marks Act, 1958, and as such the judgment of the trial Court is without jurisdiction.

9. I have been taken through the pleadings and other relevant documents in the case. There is a clear averment in the plaint to the effect that the 2nd defendant firm was started with the funds of the 1st defendant and that the 3rd defendant, who is the wife, and the 4th defendant, who is the brother-in-law, of the 1st defendant, are only benamidars and namelenders for the benefit of the 1st defendant. It is further averred in the plaint that the 1st defendant should not be permitted to circumvent the clause in the partnership deed Ex. A.1 by creating firm in the names of defendants 3 and 4 and that all the defendants should be prevented by an Injunction restraining them from doing any business in the name of the 2nd plaintiff or in any name which is deceptively similar to 'M. M. Mohammed Saleh.' It has been further stated in the plaint that the plaintiffs had already become entitled to the goodwill of the firm 'M. M. Mohammed Saleh' by a decree in the City Civil Court in O. S. No. 856 of 1957 and that the first defendant is bound by clause (8) of the partnership deed dated 1-4-1958. Clause (8) of Ex. A.1 reads as follows:--

'In view of the two partners having taken over the business coming from their father who was originally carrying on this business of M. M. Mohammed Saleh it is hereby agreed that in the event of any of the partners going out of the partnership the outgoing partner shall not be entitled to the goodwill nor to any payment on account of the goodwill and shall not be entitled to open a similar business in the name of M. M. Mohammed Saleh in the city limits.'

It is clear from the above that the 1st defendant should not open a similar business in the name of 'M. M. Mohammed Saleh' in the city limits.

10. According to the 1st defendant, defendants 3 and 4 have opened a similar business, not in the name of 'M. M. Mohammed Saleh', but in the name of 'Saleh Machinery stores'. The 1st defendant completely disowned any right in the said business. Incidentally, the 1st defendant has averred in his written statement that he has not committed any breach of the agreement contained in clause (8) of Ex. A.1.

11. Considering the averments in the plaint to the effect that the 1st defendant should not be allowed to carry on similar business in any name which is deceptively similar to 'M. M. Mohammed Saleh' and also considering the terms of clause (8) of the partnership deed Ex. A. 1, the trial Court found that the 1st defendant has infringed clause (8) of the agreement and as such granted the injunction as prayed for. The 1st defendant had not preferred any appeal against this finding of the trial Court. As far as defendants 2 to 4 are concerned, they are not bound by the terms of clause (8) of Ex. A.1. No doubt, they have averred, in their written statement, that the business carried on by them is not similar to that of the second plaintiff. The trial Court considered them as 'benamidars' for the first defendant, and decreed the suit. On appeal by defendants 2 to 4, the lower appellate Court, despite its finding that defendants 3 and 4 are only benamidars for the fist defendant had not preferred any appeal dismissed the suit holding that the name 'Saleh Machinery stores' is not deceptively similar to the name 'M. M. Mohammed Saleh'.

12. It is significant to note that the rights of the first defendant stands entirely on a different footing than that of defendants 2 to 4. The discussion by the trial Court as regards the right of the first defendant is with reference to clause (8) of Ex. A.1. But as far as defendants 3 and 4 are concerned, their case is entirely different, and they claim independent right in 'Saleh Machinery stores', while the first defendant completely disowns the said business. The finding of the trial Court has been arrived at on the basis that the first defendant is the real owner and that the business carried on under the name and style 'Saleh Machinery Stores' is offending clause (8) of Ex. A.1. The said finding against the first defendant has become conclusive since he had not preferred any appeal. To discuss and decide the question as to whether defendants 3 and 4 are carrying on any business which is deceptively similar to that of the plaintiffs, is not the scope of the suit at all. Such a thing will be only academic and outside the prayer in the plaint. Once it is held that defendants 3 and 4 are the owners of 'Saleh Machinery stores', the suit has to fail automatically since they are not parties to Ex. A. 1. But, if it is found that the first defendant is the owner of 'Saleh Machinery stores', finding that the first defendant has violated clause (8) of Ex. A. 1, which had not been appealed against, is conclusive; and the lower appellate Court, in my view, cannot grant a decree which will in effect give a relief to the first defendant with reference to whom the judgment and decree of the trial Court have become conclusive and binding.

13. Order XLI Rule 4, Civil P.C. reads-

'Where there are more plaintiffs or more defendants than one in a suit, and the decree appealed from proceeds on any ground common to all the plaintiffs, or to all the defendants, any one of the plaintiffs or of the defendants may appeal from the whole decree and thereupon the appellate Court may reverse or vary the decree in favour of the plaintiffs or defendants, as the case may be.' From the above provision, it is clear that the ground of the decision appealed from must be common to all the plaintiffs or to all the defendants, as the case may be; then only, the appellate Court can reverse or vary the decree in favour of the plaintiffs or the defendants, as the case may be. But as far as the present case is concerned, the appellants before the lower appellate Court (defendants 2 to 4) have nothing to do with clause (8) of Ex. A.1. The decision rendered by the trial Court was only with reference to clause (8) of Ex. A. 1. As such, even though the appellants before the lower appellate Court averred that 'Saleh Machinery Stores' is not similar to the firm 'M. M. Mohammed Saleh', the same cannot be taken as a 'common ground' for the first defendant also, inasmuch as the first defendant alone is bound by clause (8) of Ex. A.1. Hence, Order XLI, Rule 4, Civil P.C. cannot be relied on to support the decision of the lower appellate Court.

14. Order XLI, Rule 33, Civil P.C. runs as follows-

'The appellate Court shall have power to pass any decree and make any order which ought to have been passed or made and to pass or make such further or other decree or order as the case may require, and this power may be exercised, by the Court notwithstanding that the appeal is as to part only of the decree and may be exercised in favour of all or any of the respondents or parties, although such respondents or parties may not have filed any appeal or objection.'

As I have already stated, there are two sets of defendants. The first defendant belongs to the first set and he completely disowned 'Saleh Machinery Stores' and the relief claimed by the plaintiffs against this defendant was only with reference to clause (8) of Ex. A.1. The second set consists of defendants 3 and 4 who claimed absolute right in 'Saleh Machinery Stores' and against whom the plaintiffs have not claimed any relief with reference to clause (8) of Ex. A.1. In the background of these facts, we have to consider whether Order XLI, Rule 33, Civil P.C. will be of any help to support the decision of the lower appellate Court.

15. In Nirmala v. Balaichand, : [1965]3SCR550 , the Supreme Court observed-

'There were therefore tow sets of defendants in the suits and in substance two decrees, though related were passed. One of the decrees can stand apart from the order. When a party allows a decree of the Court of first instance to become final, by not appealing against the decree, it would not be open to another party to the litigation, whose rights are otherwise not affected by the decree, to invoke the powers of the appellate Court under Order 41, Rule 33, to pass a decree in favour of the party not appealing so as to give the latter a benefit which he has not claimed. Order 41, Rule 33 is primarily intended to confer power upon the appellate Court to do justice by granting relief to a party who has not appealed, when refusing to do so, would result in making inconsistent, contradictory or unworkable orders. We do not think that power under Order 41, Rule 33, Civil P.C. can be exercised in this case in favour of the deities.'

16. In my opinion, the decree of the trial Court, in the instant case, against the first defendant, can stand independently of the right claimed by defendants 2 to 4. In view of the finding of the lower appellate Court that defendants 2 to 4 are only benamidars, the relief which it granted in effect gives a relief to the first defendant who had not appealed from the decree and judgment of the trial Court. Further, a decree against defendants 2 to 4, in my opinion, can stand independently and there cannot be any inconsistency, contradictoriness or unworkability if the order is passed only as against defendants 2 to 4.

17. Sri Balathandapani, the learned counsel appearing for defendants 3 and 4, contended that the courts below have not considered the question of benami. He also submitted that the onus has been shifted upon defendants 3 and 4 and as such the question of benami has been wrongly decided. As regards the benami nature of the business, both the courts have concurrently found that the first defendant is the real owner and that defendants 3 and 4 are benamidars. All the evidence on record has been properly discussed by the Courts below. In my view, the burden of proof assumes little importance when all the evidence is before the Court and has been discussed and decided on. Taking into consideration the evidence on record, the concurrent finding arrived at by the courts below to the effect that defendants 3 and 4 are benamidars, cannot be interfered with.

18. I do not think there is any substance in the argument of the learned counsel for the third and fourth defendants to the effect that the suit will fall under Section 105(c) of the Trade and Merchandise Marks Act, 1958. The lower appellate Court has correctly considered this aspect and has rejected the contention.

19. Under these circumstances, the second appeal is allowed, with the result that suit is decreed as prayed for. There will be no order as to costs. No leave.

20. Appeal allowed.


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