In the matter of:

SU-KAM Power Systems Ltd. Vs. Mr. Kunwer Sachdev & Anr.

CS (COMM)1155/2018

FACTS:

1. The Suit was filed by the plaintiff company through its resolution professional under Order XIIIA of CPC for obtaining summary judgement against the defendant. The suit was filed for declaration, permanent injunction, damages and incidental reliefs.
2. It was the case of the plaintiff that the suit was liable to be decreed summarily as the defendant no. 1 had no real prospect of defending its claim and the defendant no.1’s defense was an abuse of the process of law. The Defendant no.1 had made numerous admissions that the plaintiff was the rightful owner, proprietor and user of the Su-Kam Marks in respect of goods covered under Class 9 of the Trade Marks Act, 1999 and such admissions supersede any and all issues, including those disputed by the Defendants.
3. Instances where the Defendant had admitted Plaintiff’s ownership of the mark:

a. The Plaintiff had secured registration for the Su-Kam marks in class 09 and had been continuously and extensively using them since 1998, without any objection from defendant no.1.

b. The Defendant No.1 had represented to the Public/ independent third parties that the Plaintiff was the owner of the Su-Kam marks in class 09 of the Trade Marks Act, 1999. The Defendant no.1 while entering into a Share Purchase-cum-Share Subscription Agreement with Reliance India Power Fund on 31^st March, 2006, had identified the Plaintiff as the registered owner of the Su-Kam Marks.

c. A suit was filed in 2015 for infringement of the Su-Kam marks by the Plaintiff, claiming itself to be the owner of the mark, when the defendant no.1 was the Managing Director of the Plaintiff company and held more than eighty per cent of its shares; therefore, the suit had been filed under the aegis of Defendant No.1.

d. The Defendant no.1 had relied upon a brand valuation report dated 03.03.3015 undertaken by Ernst & Young wherein the Plaintiff had been identified as the owner of Su-Kam Marks, when he submitted his bid for the plaintiff company during the ongoing insolvency proceedings.

Held:

1. Under Rule3 of Order XIII-A CPC there will be no real prospect of successfully defending the claim when the Court is able to make the necessary finding of fact, apply the law to the facts, and the same is a proportionate, more expeditious and less expensie means to achieve a fair and just result.
2. The Commercial Courts Act, 2015 has been enacted with the intent to improve efficiency and reduce delay in disposal of commercial cases. Amended Order XIIIA of CPC, as applicable to commercial disputes, enables the Court to decide a claim or part thereof without recording oral evidence. It seeks to avoid the long drawn process of leading oral evidence in certain eventualities. Consequently the said provision enables disposal of commercial disputes in a time bound manner and promotes the object of the Commercial Courts Act, 2015.
3. Defendant No.1 is stopped from leading evidence of his title to the SU-KAM marks in respect of class 9, in view of his representations to the plaintiff and the world at large that the Plaintiff is the exclusive owner, on which Plaintiff has relied by expanding its business and by spending money on advertisements and promoting its business under the impugned mark.
4. It is settled law that defendant no.1 cannot be permitted to take advantage of his own breach of fiduciary duty to divest the company of its substratal asset as held in Globe Motors Ltd. Vs. Mehta Teja Singh & Co., 1983 SCC Online Del 193.
5. Recordal of Deed of Assignment mandatory: Assuming that the deed of Assignment is valid, this Court is of the view that recordal of the said Deed of Assignment is mandatory as held by a Coordinate Bench of this Court in Ramaiah Life Style Cafe Vs. Eminent Entertainment & Ors. CS(COMM)1433/2016, as admittedly the amended Section 45 of the Trade Marks Act applies to the present case. In distinguishing Section 45 as it presently stands from the pre- amendment version of Section 45, a Coordination Bench of this Court observed in the aforesaid case that non- compliance of mandatory requirement to record assignments would amount to flouting the law. It was held that any person not complying with the mandatory provision cannot take benefit despite such non- compliance. Consequently Defendant No.1 cannot rely on document that was mandatory to register. In the present case the application for recordal of assignment is made after more than twelve years, after commencement of Corporate Insolvency Resolution Process on 18^th of July, 2018.
6. The present Suit is within limitation as the right to sue accrues when there is a clear and/0r unequivocal threat proceeding from the defendant which invades or jeopardizes the Plaintiff’s rights. In the present case between 16.03.2006 i.e. the date of execution of Deed of Assignment and 09.07.2018 i.e. when the Defendant no.1 submitted the deed of assignment to the Interim Resolution Professional, there was no assertion by Defendant No.1 that Plaintiff is not the owner of the SU-KAM mark in class-09. Consequently the cause of action for filing the present suit arose for the first time on 09.07.2018.
7. In the present case the Plaintiff is the exclusive registered proprietor of the trademarks SU-KAM with respect to investor which fall within Class 9 in view of the registration certificates dated 22.06.2005 and 05.02.2011 in favor of the plaintiff having into effect on 05.10.1998 and 09.03.2006 and which were renewed thereafter.
8. Further the Deed of Assignment is void for breach of fiduciary duty. In fact, the said Deed has been executed by the Defendant no.1 both s assignor and assignee and it purports to transfer the substratum of plaintiff’s business to its director “defendant no.1” for nominal consideration of Rs.5,000/- by an alleged recordal twelve years later and that too after commencement of corporate insolvency resolution process.