JUDGMENT
V. Kanagaraj, J.
1. Both the above appeals are respectively directed against the common judgment and decree dated 20.9.1996 made in O.S.No. 49 of 1988 and O.S.No. 4 of 1991 by the Court of Principal District Judge, North Arcot District at Vellore, wherein the appellant in both the above appeals herein is the plaintiff in both the said suits. The respondent in both the above appeals is also one and the same and he is the defendant in both the suits in the trial court.
2. The first suit in O.S.No. 49 of 1988 which is concerned with A.S.No. 1000 of 1996, the appellant has instituted for declaration and permanent injunction restraining the defendant from interfering with the plaintiff’s Registered Trade Mark Nos. 168977, 168986 and 104626 as described in schedule ‘A’ by using the offending trade mark as described in schedule ‘B’ or by using any other trade mark of the plaintiff’s Registered Trade Mark.
3. The other suit in O.S.No. 4 of 1991 has been instituted for permanent injunction restraining the defendant from interfering with the plaintiff’s Registered Trade Mark bearing registration No. 168979 and 219421-B as described in the certificates issued and passing of ‘beedi’ in any place as and for the ‘beedies’ of the plaintiff by using identical trade marks and further directing for mandatory injunction to deliver up the infringing labels and marks.
4. So far as the averments of the plaint in O.S.No. 49 of 1988 are concerned, the plaintiff is a Registered Partnership Firm, the registration No. of which is 452/89 of the Indian Partnership Act, 1932 carrying on business of manufacturing ‘beedies. The plaintiff’s father V.K. Kaliappa Gounder was the founder of the firm and was doing business in manufacturing the said items and marketing at various places in India and Pakistan as an individual and thereafter as the ‘kartha’ of the Hindu joint family. While so, in the year 1956 in a family partition effected, V.K. Kaliappa Gounder retained the ‘beedi’ business for himself and constituted a partnership firm under the partnership deed dated 1.2.1956 wherein the partners are: (i) V.K. Kaliappa Gounder, (ii) his son Subramani (defendant), (iii) V.K. Arumugham (plaintiff and the managing partner), (iv) V.K. Sivaprakasam, and (v) V.K. Shanmugham, being the partners of the said firm.
5. As per Clause 9 of the partnership deed, the founder father, V.K. Kaliappa Gounder was having the right to borrow and as regards the operation of the bank accounts, the father V.K. Kaliappa Gounder and the plaintiff V.K. Arumugham were having the right. As per the contentions of Clause 19 of the Partnership deed, that in case of death or retirement of any partner, the surviving partners shall be entitled to carry on the business in partnership amongst themselves, As per para 20 of the partnership deed, that in case of disputes or differences, the father had for himself reserved the right to decide and his decision shall be final and binding on the other partners.
6. While so, in the year 1978 when the defendant retired at will and started a Cigarette Factory as a sole proprietor, the father dissolved the firm in the Registrar of Firms, Madras, and on 1.4.1978, a fresh partnership was constituted by the father, V.K. Kaliappa Gounder himself as the first party, (ii) V.K. Arumugham, the plaintiff as the Managing Partner, (iii) V.K. Sivaprakasam and (iv) V.K. Shanmugham, as the partners and the business was carried on by the only constituted firm having been registered under the Indian Partnership Act in No. F3/14007/68 696/56. It is pertinent to note that the defendant is not a partner in this firm.
7. While such are the state of affairs, the father and V.K. Kaliappa Gounder expired on 28.5.1986 and on his death, a new partnership firm was constituted on 11.6.1986 comprising: (i) V.K. Arumugham, the plaintiff, (ii) V.K. Sivaprakasam and (iii) V.K. Shanmugham, as partners trading under the name and style of ‘V.K. Kaliappa Gounder Sons’ and as Sun. Beedi Traders at Jolarpet. While so, on 23.6.1989, one of the partners, V.K. Shanmugham died and all the assets including the suit trade marks and liabilities were taken over by the surviving partners and they were carrying on the business; that the firm is the registered proprietors of several Trade Marks registered under the Trade and Merchandise Marks Act, 1958 and the registration has also been renewed from time to time; that by virtue of the registration and long exclusive user, the plaintiff has become the exclusive proprietor of the said trade mark; that the plaintiff and its predecessors are the manufacturers and sellers of ‘beedies’ having extensive business. It is they who popularised the mark of Sun Beedies by effecting wide publicity in various media such as, newspapers, magazines, cinema slides, hoardings, placards, etc.
8. That the trade mark “Sun Beedi” has become a household name expressing and associated with the plaintiff’s manufactured article; that neither the defendant, nor any one else has any manner of right of user of the trade mark; that the defendant, not being the proprietor after the death of the father, V.K. Kaliappa Gounder is infringing the plaintiff’s legal rights in them and passing off as the goods of plaintiff’s manufacture thus causing confusion. This act of the defendant is highly prejudicial to the plaintiff and their interest and has created confusion and deception among the traders and public; that on the very close resemblance and of the deceptive similarity that the ‘B’ schedule as to ‘A’ schedule mark would give rise to confusion as the course or right of the respective goods and the defendant has encroached upon the legitimate rights of the plaintiff and hence the suit for permanent injunction restraining the defendants by himself or by his agents and servants from interfering with the plaintiff’s registered trade mark Nos. 168977, 168986 and 104626 as described in schedule ‘A’ by using the offending trade mark as described in schedule ‘B’ or by using in any manner deceptively similar to that of the plaintiff’s trade mark and for permanent injunction restraining the defendant or his servants, agents from passing off their ‘beedies’ in any place and for mandatory injunction to surrender to the plaintiff all the wrappers, labels consisting of the offending trade mark and further directing the defendant to pay the plaintiff the costs of the suit.
9. The defence case as set up by the defendant in the written statement is that, the plaintiff is not a registered firm under the Indian Partnership Act; that this defendant was helping the father V.K. Kaliappa Gounder as his eldest son and improved the said business; that his father was the premier ‘beedi’ manufacturer in Tamil Nadu in several trade marks running all over India with a good name from the year 1913 under the name and style of ‘V.K. Kaliappa Gounder and Sons’ and by the name of ‘Sun Beedi’ as well having the factory at Jolarpet; that V.K. Kaliappa Gounder obtained a licence in L115/BHB/75 Jolarpet from the Central Excise Department and having trade marks such as, ‘sun medal’, ‘Jaihind’, ‘eqbal’ etc. under the name and style of ‘Sun Beedi Factory’; that the said trade marks have been registered in the name of V.K. Kaliappa Gounder of Jolarpet.
10. The further averments of the written statement are that, in the year 1956, the founder V.K. Kaliappa Gounder effected a family partition according to which, he retained the ‘beedi’ business for himself and constituted a partnership firm under the partnership deed dated 1.2.1956, in which one V.K. Kaliappa Gounder, (ii) V.K. Subramani, (iii) V.K. Arumugham, (iv) V.K. Sivaprakasam, and (iv) V.K. Shanmugham, were partners and carrying on with the said ‘beedi; business by these partners are all not true. It is further false to allege in the suit that the defendant in 1978 retired at will and started a Cigarette Factory as a sole proprietor; that the father of the defendant executed a will in favour of the defendant on 30.3.1986; that it came to force on the death of the said Kaliappa Gounder; that the defendant had also obtained a Central Excise License in L4/BHB/80 for the manufacture and supply of ‘beedies’ under the brand names, ‘Sun’, ‘Medal’, ‘Chakkara’ ‘Ramesh; and ‘Venus’ that the father V.K. Kaliappa Gounder also gave permission for him to trade with the trade marks of ‘Sun’, further cancelling the authorisation given to Sun Beedi Traders on 31.3.1986 sending letters to the department also; that as per the authorisation given by V.K. Kaliappa Gounder in the letter 4 115/BHB/75, this defendant has been dealing in trade marks and even as per the last will dated 30.3.1986, this defendant is entitled to deal in all registered trade marks of the Sun beedi factory and this defendant is trading in the said trade marks and that in Law, this defendant alone is entitled to trade with the marks of Sun beedi factory and the plaintiffs have no right to question the same.
[Paras. 11 to 17 omitted – Ed.]
18. So far as the other appeal in A.S.No. 1001 of 1996 is concerned, it is directed against the common judgment and decree dated 20.9.1996 made in O.S.No. 4 of 1991 by one and the same Court of Principal District Judge, Vellore, North Arcot District. The plaintiff and the defendant in the earlier suit (i.e., in O.S.No. 49 of 1988) are the plaintiff and the defendant in this suit also. The pleadings and prayer are almost similar in both the suits.
19. So far as the pleadings of this suit (O.S.No. 4 of 1991) are concerned, the plaintiff is a firm registered under the Indian Partnership Act, 1932 having the registration No. 452/89 of the Registrar of Firms, Vellore; that besides V.K. Arumugham and V.K. Siva Prakasam, there are four other working partners, who have no rights in the assets of the firm; that the above trade marks are registered in the names of the partners trading as V.K. Kaliappa Gounder Sons as Sun Beedi Traders. Hence, the said trade marks are the properties of the plaintiff-firm; that the defendant is none other than the eldest son of V.K. Kaliappa Gounder, who was also a partner in the firm ‘V.K. Kaliappa Gounder Sons; formed on 1.2.1956; that he retired even during the lifetime of his father on 31.3.1978 and his accounts were settled’; that after retirement, he is manufacturing and selling cigarettes; that besides the trade marks, which are the subject matter in the suit, the plaintiff-firm owns two other trade marks under registered trade mark Nos. 168986 and 168977; that in the beginning of 1988, the defendant commenced manufacture of beedies and marketed them under these trade marks, using the same labels now registered in the name of the plaintiff firm and previously in the name of the previous firm and that the defendant has also started marketing the beedies using the suit trade marks.
20. Even in the present suit, the history of the case is given, as in the other suit, as to how the suit trade mark No. 168979 got originally registered in the name of V.K. Kaliappa Gounder, the forming of the partnership on 1.2.1956, the retirement of the defendant, the demise of Kaliappa Gounder, registering of Trade Mark No. 168979 in the name of the three other brothers excepting the defendant under the name and style of ‘V.K. Kaliappa Gounder Sons’, thus taking over all the assets and liabilities of the previous firm and forming the new firm, registering the same on an application dated 19.7.1989 and by order dated 3.4.1990.
21. Then, the history of the Trade Mark No. 219421 -B is given as to how it originally got registered in the names of father and four brothers including the defendant and the deceased V.K. Shanmugham, the defendant retiring from the firm on 31.3.1978, registering of the new trade mark in No. 219421-B by the order dated 26.4.1988 in the names of three brothers namely V.K. Arumugham, V.K. Sivaprakasam and V.K. Shanmugham, the said trade mark got registered in the names of V.K. Arumugam and V.K. Sivaprakasam by the order dated 3.4.1990 trading as ‘V.K. Kaliappa Gounder Sons’ and also ‘Sun Beedi Traders’.
22. Then, the plaintiff would narrate the pictorial representations of the trade mark No. 168979 to facilitate identification, in para No. 7 of the plaint and in para No. 9 would narrate the history of the registered firm No. 696/56 that the father and the four sons including the defendant and the deceased Shanmugham and partners and proprietors of the trade marks and the business in beedies having been carried on under the name and style of ‘V.K. Kaliappa Gounder & Sons’ and ‘Sun Beedi Traders’; the retirement of the defendant on 31.3.1978, the firm later came to be registered as 578/86 on 1.8.1986 with remaining three partners and reconstituting the same, taking over all the assets and liabilities after the death of V.K. Shamugam; that since originally the firm was registered as ‘V.K. Kaliappa Gounder and Sons’ Beedi traders with the defendant and V.K. Kaliappa Gounder as partners, their names also find place in the suit trade marks and the said trade marks are now owned by the plaintiffs firm; that for several decades, the plaintiff firm and predecessor firms manufactured and marketed beedies using the suit trade marks; that the goods manufactured and sold with these trade marks have been taken as goods of the plaintiffs firm by long user and continued registration in the present name have resulted in the association of these trade marks with the plaintiff firm alone, which is the registered proprietor of the suit trade marks within the meaning of Section 28 of the Act and if anybody else uses the trade marks for beedies, it amounts to infringement.
23. The further averments of the plaint are that the plaintiff and its predecessors are celebrated manufactures and sellers of beedies and they had extensive business, having been sold under their extensive trade mark “Sun Beedies” and “Double Medal Beedi” to distinguish the beedies manufactured and marketed by them and their predecessors from other variety of beedies available in the market; that they have popularised the said mark by wide publicity in various media and that no one else much less the defendant has any manner of right to use the said mark or similar mark, which the plaintiff alone is entitled.
24. While so, the defendant after retirement from the firm in the year 1978, started manufacturing cigarettes, but after the death of his father V.K. Kaliappa Gounder in the year 1986, he started manufacturing Beedies using the trade mark Nos. 168977 and 168986 belonging to the plaintiffs predecessor firm and hence the plaintiff’s predecessor filed O.S.No. 49 of 1988 for Permanent Injunction and other reliefs and hence the defendant becomes guilty of infringement of the suit trade mark; that since the defendant, uses the identical label, the innocent public buy beedies, thinking that they are the products of the plaintiffs; that the traders also helped the defendants, since they are given many privileges; that generally for passing off, persons would adopt deceptively similar trade marks and sell to unwary purchasers, but the defendant going a step further uses the identifical trade marks, so that even well informed persons would not have any hesitation in buying his products and if it is allowed, in future, there would not be a buyer for the beedies of the plaintiffs; that the plaintiff received a letter dated 5.3.1991 from Sri Satyanarayana Trading Corporation, Anakapalli, complaining about the sale by others and on enquiry, it is learnt that it is the defendant, who is using all the suit trade marks for marketing his beedies; that the defendant is having his factory at Jolarpet and there itself he manufactures beedies, put the suit trade marks and despatch it to the customers and thus the infringement takes place at Jolarpet.
25. With the above averments, the plaintiff would pray for the grant of permanent injunction restraining the defendant and his men from interfering with the plaintiffs registered trade marks bearing Nos. 168979 and 219421-B; to grant yet another permanent injunction restraining the defendant and his men from passing off beedies in any place as and for the beedies of the plaintiffs by using identical trade marks or deceptively similar trade marks; for rendition of account of profits earned by the defendant using the trade marks; for mandatory injunction directing the defendant to deliver up the infringing labels and marks and any other printing matter containing or concerning of the offending trade marks together with the blocks used for printing of the same for destruction and for costs.
26. In the written statement filed by the defendant, besides repudiating all the allegations of the plaint, he would further allege that the subject matters of the suits are not the properties of the plaintiff firm and that on the sole ground that the plaint is silent about the details of the working partners, who are alleged to be the members of the partnership firm, the plaint ought to be rejected in limine; that it is utterly false to allege that this defendant is retired from the partnership firm established on 1.2.1956; that as the eldest son of Kaliappa Gounder, this defendant is assisting throughout for the said business being established and improved; that V.K. Kaliappa Gounder obtained licence in I.A.115/BHB/75 Jolarpet from the Central Excise Department and having trade marks ‘Sun’, ‘Medal’, ‘Jaihind’, ‘Eqbal’ etc. under the name and style of Sun Beedi factory; that it is false to allege that the plaintiff firm owns two other trade marks in Nos. 168986 and 168977; that it is false to allege that this defendant was trading in beedies in the name of the plaintiffs firm in 1988 and that it is significant to note that the plaintiff admits that the trade marks quoted were registered in the previous firm and not by the present firm, which is said to have been constituted in 1988.
[Paras.27 to 33 omitted – Ed.]
34. Based on the above issues involved in both the suits, the trial court would ultimately decide that the plaintiff is not the exclusive owner of the suit trade marks since the trade mark belongs to the partnership firm, all the partners are entitled to carry on with the business jointly for the benefit of all and it cannot be used in rivalry and in competition with each other and the defendant carrying on with the business independently is also illegal and he is restrained by an order of injunction. The trial court also made it very clear that the plaintiff is also not the exclusive owner of the trade mark, further concluding that the defendant is liable for accounting, thus decreeing both the suits partly and dismissing both regarding the other reliefs and further ordering the parties to bear their own costs.
35. Aggrieved against the said common judgment and decree, as passed by the trial court, the plaintiff therein has preferred both the above appeals on one and the same grounds as offered in the memorandum of grounds of appeal in both the above appeals.
[Paras. 36 to 59 omitted – Ed.]
60. Based on the above pleadings, the trial court has recorded the evidence for both the above suits in one and the same suit i.e., in O.S.No. 49 of 1988, wherein on the part of the plaintiffs, the plaintiff in both the suits viz., V.K. Arumugam would examine himself as P.W.1 and 59 documents would be marked as Exs.A-1 to A-59 for documentary evidence. On the part of the defendant, besides the defendant examining himself as D.W.1, two more witnesses would also be examined as D.Ws.2 and 3 for oral evidence and 42 documents would be marked on the part of the defendant as Exs.B-1 to B-42. In appreciation of all these evidence placed on record, analysing the same in its own way, ultimately, the lower court would arrive at the conclusion that the plaintiff is not the exclusive owner of the suit trade marks and since the trade marks belong to the partnership firm, all the partners are jointly entitled to carry on with the business for the benefit of all and the suit trade marks cannot be used in rivalry and in competition with each other, besides restraining the defendant from carrying on with independent business, since held illegal, by means of an order of in-j unction further holding that the defendant is liable for accounting, thus decreeing both the suits partly and dismissing both regarding the other reliefs.
61. It is only against the said judgment and decree, passed by the trial court, the plaintiffs in both the suits have come forward to prefer both the appeal suits on common grounds of appeal, as seen from the memorandum of grounds of appeal in both the appeal suits.
62. In consideration of the facts and circumstances encircling both the suits, as brought forth from the pleadings of the plaint and the written statement as well, further having regard to the evidence placed on record-both oral and documentary, on a careful perusal of the judgment of the lower court and upon hearing the learned senior counsel for both, the following points arise for consideration and determination in the above two appeal suits namely:
(1) Whether the retirement of the defendant from the 1956 partnership on 31.3.1978 and reconstitution of a fresh partnership on 1.4.1978 takingover the assets and liabilities and the trade marks and the goodwill of the 1956 firm by the other four partners are legal and binding?
(2) Whether the plaintiffs could independently and to the exclusion of the defendant constitute a new firm takingover the assets and liabilities of the earlier firm, to carry on with the business, making use of the suit trade marks?
(3) Whether the plaintiff is the exclusive and absolute owner of the trade marks and the ‘A’ schedule suit properties?
(4) Whether the authorisation granted by V.K. Kaliappa Gounder in Ex.B-4 and the will dated 30.3.1986 (Ex.B-42) are true, valid and binding on the partnership business and do they have hearing on the suit trade marks?
(5) Whether the defendant is exclusively and absolutely entitled to own and carry on independent business using the firm name and the suit trade marks?
(6) Whether the suits, as framed, are maintainable?
63. Points 1 and 2: To arrive at a valid conclusion generally regarding all the point and for points 1 and 2 particularly, it is relevant to trace the history of the case in a nutshell. It is Ex.A-14 the deed of partnership dated 1.2.1956, which is the starting point for the whole episode encircling the case in hand. It is a partnership constituted by the members of the Hindu joint family consisting of the father V.K. Kaliappa Gounder and his four sons, namely, V.K. Subramani the defendant in both the suits, V.K. Arumugham the plaintiff, V.K. Sivaprakasam and V.K. Shanmugham having equal rights in the partnership business of ‘V.K. Kaliappa Gounder and Sons’ initially to carry on with the business of the Hindu undivided family under the name and style of ‘Sun Beedi Factory’ and ‘Jai Hind Press’ having the manufacturing unit at Jolarpet and marketing the products at various places in Tamil Nadu and Andhra Pradesh and a railway stall contract under the name and style of V.K.K. and Sons’ at Jolarpet, North Arcot District. It is averred in the Deed of partnership dated 1.2.1956 (Ex.A-14) that the said businesses and their properties, hitherto were belonging to the Hindu undivided family and in consequence of the family partition effected on 31.1.1956, by mutual understanding, among the members of the Hindu undivided family, all of whom are none others than the partners of the newly constituted partnership and the partnership business. The other features of the said partnership concern are that the partnership is one ‘at will’; that the office to be constituted at Jolarpet; that the profit and loss shall be divided equally among the partners; that the Bank accounts shall be operated by any of the parties of the first and third parts of the deed of partnership i.e., V.K. Kaliappa Gounder and V.K. Arumugam; that no party shall without the consent, in writing, of the other parties assign, pledge, mortgage or otherwise create a charge on his share or interest in the partnership; that in the event of death or retirement of any of the parties, his account shall be settled as on the last date of the calendar month in which such party dies or retires; that in the event of death or retirement of any of the parties, the surviving or continuing partners shall be entitled to carry on the business amongst themselves and that in the event of any dispute or differences arising between the parties during the continuance of the partnership, the same shall be decided by the party of the first part of the deed of partnership i.e., V.K. Kaliappa Gounder and such decision shall be binding upon all the parties to the partnership. With such and some other usual conditions, the said partnership had been constituted under different trade marks, such as ‘Sun Beedi’, ‘Sun Medal’ etc. and the said partnership concern was carrying on the business in beedi manufacturing and selling at different places in India and Pakistan till 1978.
64. While so, it is the abrupt case of the plaintiffs that on 31.3.1978, the defendant the eldest son of Kaliappa Gounder and the second partner in the partnership firm-retired from the partnership and thereafter independently started a cigarette factory and that at the instance of the father and the first partner of the said partnership firm, all the remaining partners constituted a fresh partnership as on 1.4.1978 and got it registered under No. F3/14007/68696/56. It is the case of the plaintiffs that the defendant is not a partner in this newly constituted firm and that the assets, liabilities, trade marks and the firm name of the 1956 firm have been taken over by the newly constituted partnership of 1978.
65. The further case of the plaintiffs is that V.K. Kaliappa Gounder, the father of the other parties and the first partner of the firm died on 28.5.1986. Thereafter, yet another partnership had been constituted as on 11.6.1986 with the remaining three brothers as partners, trading under the name and style of V.K. Kaliappa Gounder Sons’; that on 23.6.1989, one of the three partners, namely, V.K. Shanmugham also died and all the assets, including the trade marks were taken over by the surviving partners and carried on with the business of the firm, as the registered proprietors registered under the Trade and Merchandise Marks Act, 1958 and that by the registration and long user of the said trade marks, the plaintiffs became the exclusive proprietors of the said trade marks since the plaintiffs and their predecessors are the manufacturers and sellers of beedies having extensive business and having popularised the trade marks of ‘Sun Beedies’ effecting wide publicity in various media.
66. The further case of the plaintiffs is that the defendant having retired from the partnership business on 31.3.1978, did the other independent business and from the year 1980, he too started operating in the same firm name, making use of the same trade marks and manufacturing and distributing beedies, not only causing great confusion, but also highly prejudicial to the interests of the plaintiffs and caused deception among the traders and public; that on the very close resemblance and deceptive similarity of the ‘B’ schedule trade marks, which are of the defendant as the ‘A’ schedule trade marks, which are of the plaintiffs, has not only encroached upon the legitimate rights of the plaintiffs, but also caused infringement into such of the legitimate rights of the plaintiffs. Hence, the plaintiffs in O.S.No. 49 of 1988 would pray to restrain the defendant from in any manner interfering with the plaintiffs registered trade mark numbers 168977, 168986 and 104626 as described in ‘A’ schedule of the suit properties, by using the offending trade mark, as described in ‘B’ schedule or by using any other trade marks, which may be in any manner deceptively similar to the plaintiff’s registered trade marks. Almost with the same or similar averments of O.S.No. 49 of 1988, the plaintiffs filed yet another suit in O.S.No. 4 of 1991 praying to restrain the defendant from in any manner interfering with the plaintiffs registered trade marks bearing Nos. 168979 and 219421 -B by means of Permanent Injunction; for yet another permanent Injunction restraining the defendant and his agents from passing off beedies in any place as and for the beedies of the plaintiffs by using identical trade marks or deceptively similar marks; for rendition of accounts and for Mandatory Injunction directing the defendant to deliver up the infringing labels and marks.
67. The case of the defendant is that he never retired from the partnership of 1956 much less on 31.3.1978, as it is falsely alleged on the part of the plaintiffs; that he still continues to be a partners of the said firm; that the reconstitution of the partnership or starting of a new firm on 1.4.1978 and again on 11.6.1986, taking over the assets and liabilities, the trade marks concerned with the original firm of 1956, are all false, bogus, fraudulent, deceitful and aimed at cheating the defendant, besides being absolutely bereft of any legality. The further firm case of the defendant is that no such partner could either retire or be made to retire in the manner attributed by the plaintiffs; that the retirement could only take place in accordance with the governing laws and not otherwise; that no partner thus be ejected unceremoniously, as it is alleged in the case of the defendant by the plaintiffs; that the plaintiffs have no right to form a new firm on their own accord; that taking over of the new firm also by the two partners, namely, V.K. Arumugam and V.K. Sivaprakasam, after the death of V.K. Shanmugham in the year 1989 is a proof positive of the fact of illegality of the constitution of the present firm and the so-called new firm cannot clothe itself of the registration or trade marks of the other firm, behind the back of any of the partners; that the proceedings dated 19.7.1989 of the Registrar of Firms and his letter dated 3.4.1990 are without jurisdiction or locus-standi nor are they binding on the defendant in any manner nor such an illegal order confer any new right on the plaintiffs.
68. It is the further contention of the defendant that the order dated 26.4.1988 regarding the registration of trade mark No. 219421-B in the names of V.K. Arumugam, V.K. Sivaprakasam and V.K. Shanmugham could also have no bearing or binding effect on this defendant and the so-called retirement of the defendant, arrangements made to constitute the new firms, the registration of such firms are all without notice and the same are mischievous, mala fide, clandestine and with dishonest intentions and the question of the defendant adopting identical trade marks does not arise at all; that it is only the plaintiffs, who. are violating the trade marks of this defendant and the plaintiffs’ new firms cannot assume the trade marks rights of the original firm of the year 1956, of which the defendant is a partner, which continues still and the dissolution of the said firm on 28.5.1986 on the very same date of death of their father V.K. Kaliappa Gounder and the later registration of the firm of 1986 are all myths since the partnership of 1956 does not cease to exist.
69. The further case of the defendants that by virtue of the authorisation given by his father late V.K. Kaliappa Gounder under Ex.B-4 dated 31.3.1986 and by the last will and testament of their father 30.3.1986, he is entitled to carry on with the business and that he is continuing to be a partner of the firm, the business is being carried on by him obtaining Central Excise Licence No. L4/4B/BHB/80 for manufacture and supply of beedies under the Central Excise Tariff 4113/11 under Chapter heading No. 2404-39 of 1985; that he had already filed a suit in O.S.No. 716 of 1988 on the file of the District Munsif’s Court, Tirupathur against the Central Excise Department to restrain them from issuing any licence in favour of the plaintiffs herein and an impleading petition filed by the plaintiffs in I.A.No. 1030 of 1988 was dismissed on 4.7.1991 and that order still holds good operating as res judicata; that declaration cannot be granted without establishing the rights since rights cannot be presupposed or presumed and the suits, as framed, are not maintainable; that there is no cause of action for both the suits and the one alleged on the plea that the infringement occurred in 1990 is absolutely false since the defendant is trading in the trade marks since 1956 in exercise of his own right, title, interest and from the year 1986 by virtue of the Ex.B-4 authorisation and Ex.B-42 Will, which are validly executed by his father and the acts of the plaintiffs in encroaching upon their business of the defendant is illegal, unlawful, unauthorised, actionable, devoid of merits and in violation of Sections 178, 179 and 180 of the Central Excise Act and thus would ultimately pray for dismissing both the suits with costs.
70. In the above circumstances of the case, it is the case of the plaintiff that on the retirement of the defendant on 31.3.1978, the remaining four partners constituted a new partnership on 1.4.1978 without V.K. Subramanian (the defendant) being a partner therein and carrying on with the partnership business under the same name and style of ‘V.K. Kaliappa Gounder and Sons’ having office at the same place i.e., Jolarpet, North Arcot District. It is significant to note that in the reconstituted partnership of 1978, it is simply stated that V.K. Subramaniam retired from the partnership dated 1.2.1956 on 31.3.1978. Barring this, for the retirement of the defendant, no other information is made available in the Ex.A-19 partnership deed dated 1.4.1978. The other highlights of this partnership deed are that the new partnership takes over all the assets and liabilities of the 1956 partnership business at their book values as on 31.3.1978; that for capital, the partners of the new firm have adjusted the balance standing to the credit of their capital accounts in the books of the erstwhile firm as on 31.3.1978 as deemed contribution. Absolutely, no mention is made in this deed of partnership dated 1.4.1978 as to the fate of original partnership dated 1.2.1956. Under Ex.A-16 notice issued under Section 63(1) of the Indian Partnership Act by one of the partners namely V.K. Kaliappa Gounder stated about the constitution of the firm V.K. Kaliappa Gounder and Sons ‘registered as No. 696/56 has been altered, thereby offering the name and full address of the defendant as the outgoing partner as on 31.3.1978. On receipt of that notice, received under Ex.A-17 acknowledgment, the Registrar of Firms has effected entries in F3/14007/78 regarding the retirement of the defendant. Hence, it is quite evident that at the behest of one of the partners V.K. Kaliappa Gounder, a notice has been sent to the Registrar of Firms under Section 63(1) of The Indian Partnership Act by one of the partners stating thereby that the other partner, namely, V.K. Subramaniam has retired and the firm was reconstituted and the Registrar of Firms seems to have acted upon that notice and effected necessary entries in the Register regarding the retirement of the defendant and constitution of the new firm.
71. So far as the legal position regarding retirement of a partner is concerned, it is enshrined under Section 32 of The Indian Partnership Act as given below:
Section 32. Retirement of a Partner: (A) A partner may retire – (a) with the consent of all the other partners;
(b) in accordance with an express agreement by the partners, or
(c) Where the partnership is ‘at will’, by giving notice in writing to all the partners of his intention to retire.
The firm as constituted under the Partnership deed dated 1.2.1956 being one ‘at will’ the provision under Section 32(1)(c) of the Partnership Act aptly applies so far as the alleged retirement of the defendant on 31.3.1978 from the partnership is concerned. According to the said provision of law, neither it is the case of the plaintiff that the defendant gave any notice, much less in writing, to all the other partners of his intention to retire nor had there been any public notice effected as required under Section 32(3) of the Indian Partnership Act, since without such publication notwithstanding the retirement of a partner from a firm, he and the partners continue to be liable as partners to third parties for any act done by any of them, which would have been an act of the firm, if done before the retirement, which could have been given either by the retiring partner or by the other partners or by any other partners, as per Section 32(4) of the Indian Partnership Act. Thus, the statutory requirements should have been scrupulously observed as far as the alleged retirement of the defendant on 31.3.1978 is concerned. None of the above requirements has either been carried out or even pleaded on the part of the plaintiffs that these legal obligations have been fulfilled. Hence, the plea of the defendant that he did not retire from the partnership constituted on 1.2.1956 as on 31.3.1978 or any other date gains strength.
72. It is also not the case of the plaintiffs that for any violation of the terms of the partnership deed, the defendant got ejected from out of the partnership as per the procedures established by Law. V.K. Kaliappa Gounder, like any other partner of the said firm could only enjoy those rights, which have been agreed upon as per the deed and he has not been given such powers either to decide the retirement of any other partner or announce the same as it is done under Ex.A-16 notice, much less by passing the statutory provisions and the procedures established by Law. It is further astonishing to note that such announcement made beyond the capacity of one partner as against the other partner by notice under Section 63(1) of The Indian Partnership Act, is simply accepted and carried out by the Registrar of Firms, without testifying the validity or legality of such a notice and without conducting any enquiry, as though the office is meant only to accept any notice forwarded by any partner and carry out things according to the recitals of the notice and that they are not found by the legislative mandate. Such attitude adopted on the part of the Registrar of Firms reduces the office into one of an automatic rubber stamp I bereft of any authority to carry out the statutory obligations. Since the institutional authority has adopted such an attitude, many wrong things have occurred giving way for lot of confusions and complications. Moreover, the original firm of 1956 has not been dissolved, which takes place only on 28.5.1986 vide F1/14317/86, as seen from Ex.A-60 i.e., the certified copy of Form ‘A’ Register of Firms maintained by the Registrar of Firms, filed as an additional document on the part of the appellant.
73. As already discussed, it is not relevant at all to give credence to the entries, which have been effected by the Registrar of Firms bluntly without application of mind or testifying the validity of anything reported in any manner or without going into the legality of such a report or notice that could be given importance to. It is rather highly necessary to find out whether such entries have been effected into the registers maintained by the Registrar, to the true facts and circumstances and in accordance with law. When the Registrar of Firms effected the, entries in the Registers regarding a fact without going into the legality of the same it is void ab initio and absolute no legal sanctity could be attached for such entries effected by the Registrar of Firms. Such of the acts done by any authority, much less the Registrar of Firms, without adhering the Law, rules and procedures, do not have any legal sanction and they only considered to be bereft of the authority of Law. There is no myth in citing, mechanically, any of the entries effected in the registers maintained by the Office of the Registrar of Firms, without ascertaining the truthfulness and legality of the same. V.K. Kaliappa Gounder issuing the notice under Ex.A-16, announcing the retirement of the defendant V.K. Subramaniam is neither an act authorised by The Indian Partnership Act nor in adherence of the relevant provisions of Law and the entries effected into the records maintained by the office of the Registrar of Firms, such as, the ‘A’ Registrar, cannot at all be approved since in all cases of such nature, the true facts and circumstances could not be expected to be given by parties.
74. Going to the facts, regarding this vital entry effected by the Registrar of Firms in the register maintained by his Office, the argument advanced by the learned senior counsel appearing for the respondent is that ‘it is only recording of the pre-existing right and the Registrar cannot create a right unless there is a pre-existing right, that a record is one on a pre-existing legal situation; and by creating a record, a legal situation cannot be created regarding previous or existing reality’ and hence the learned senior counsel would contend that the lower court held the register in which entries we so effected by the Registrar of Firms as self-serving document and would continue to say that an order passed by the Registrar cannot by itself give a cause of action. The above argument of the learned senior counsel for the respondent has to be accepted in toto so far as Ex.A-16 notice and Ex.A-17 acknowledgment are concerned. Under these circumstances the only decision that could be arrived at is that the retirement of the defendant on 31.3.1978 from the original partnership of 1956 is neither legal nor acceptable and it could only be held that he did not retire from the original partnership of 1956 as alleged by the plaintiffs.
75. Coming to the next part of the first point that whether the partnership deed dated 1.4.1978 could be accepted as an act legally and validly done. The partnership deed dated 1.4.1978 (Ex.A-19), excepting for the inclusion of some paragraphs, is a replica of the original partnership deed dated 1.2.1956 (Ex.A-14) and it differs only in not making a mention of the name of the defendant in the first paragraph and announcing his retirement as on 31.3.1978 in para No. 3 and in para No. 4 stating that “this partnership shall take over all the assets and liabilities of the partnership business hither to before carried on by the parties hereto and V.K. Subramaniam under the name and style of “V.K. Kaliappa Gounder and Sons” at their book values as on 31.3.1978. In para No. 5 of this partnership deed, it is mentioned that “the capital necessary for this partnership shall be contributed by all the parties hereto. For this purpose, the balance standing to the credit of their capital accounts of the books of the erstwhile firm on 31.3.1978, shall be deemed to be the capital contributed by them for this partnership. The capital so contributed by the parties hereto shall not carry interest.” Barring the above, there is absolutely no change or alteration found either regarding the firm name or regarding the firm’s business or regarding the operation, place of business and such other activities covering the trade and no mention need be made that it is also a partnership ‘at will’. Hence, it could be safely concluded that minus the defendant, all the other aspects of this partnership are one and the same and it could be presumed that on account of the announcement of retirement of the defendant, the new partnership deed dated 1.4.1978 had to be necessarily created by the remaining partners of the original firm in order to show that the defendant had no role to play in the partnership business, in the trade marks and goodwill of the partnership firm from 1.4.1978 onwards.
76. It is open secret that only because of the retirement of the defendant announced under Ex.A-16 notice by another partner, the necessity had arisen for the partnership deed dated 1.4.1978 to come into existence and since the partnership deed dated 1.4.1978 exhibited under Ex.A-19 is concerned, he could only deny the same as not true. It would further be denied on the part of the defendant that he started a new business of his own, as baseless. It is further pertinent to note that the partnership deed dated 1.2.1956 was still alive and it came to be dissolved only in the year 1986. If really the firm is dissolved and reconstituted, it should have been actually done then and there. But, the appellants go to the Registrar of Trade Marks ten years after the alleged retirement and after the death of their father and hence the arguments of the learned Counsel for the defendant that the very retirement of the defendant since not established as per the procedure established by Law, it follows that the formation or reconstitution of yet another partnership on 1.4.1978 on the very next day is nothing but false; that the trade marks are jointly owned and the ‘Act’ does not authorise the registration of two or more firms operating in one and the same name and style making use of the same trade marks. The learned Counsel for the respondent would further contend that so far as the Trade and Merchandise Marks Act, 1958 is concerned, the respondent had not assigned; that when the respondent had not assigned, he continues to be a partner in the firm in all respects; that the other partners, by manipulation of things in their favour, have announced the retirement of the respondent on 31.3.1978, based on which a new partnership deed dated 1.4.1978 is said to have been constituted and that the four points admitted by the appellant i.e., (1) there as no intimation by the respondent to the other partners regarding his retirement, in writing; (2) that there has not been any dissolution of the 1956 firm; (3) that the retirement does not mean ‘Published’ as contemplated under Section 72 of the Indian Partnership Act, wherein the mode of giving public notice is contemplated and (4) upon dissolution of the partnership, the share of the respondent has not been decided; are self-evident. When the above questions are not answered, the very retirement of the respondent having not been legally proved, the reconstitution of the partnership dated 1.4.1978 in the light of the existing original partnership cannot survive, since there cannot be two partnership deeds for one and the same firm and business – the original one consisting of five partners and the other one, one short of the original partnership. Therefore, so far as point No. 1 which is a combination of the retirement of the respondent on 31.3.1978 and constitution of the fresh partnership on 1.4.1978, it has to be ultimately decided that the retirement of the respondent from the partnership as on 31.3.1978 and the reconstitution of the partnership on 1.4.1978 and further it is decided that the retirement of the respondent from the partnership dated 1.2.1956 is neither voluntary nor true nor done or established according to the procedures established by law and consequently the reconstitution of the firm leaving the respondent is neither legal nor acceptable one and no such firm could be reconstituted during the existence of the original firm. Hence, point No. 1 is answered in the negative against the appellants and in favour of the respondent.
77. So far as the second point is concerned, the learned senior counsel appearing for the appellants in his attempt to justify the reconstitution of the 1978 and 1986 firms, would cite a case reported in K.P.A. Vellayappa Nadar (dead) through L.Rs. v. Bhagirathi Ammal and Ors. , wherein after retirement of one of the partners, the other two partners continued in the same registration and out of the remaining two partners, one partner died and the first partner, who retired filed a suit for rendition of accounts of the earlier partnership and the Apex Court held that,
the first partnership firm had stood mutally dissolved and the new partnership came into existence to which appellant was not a partner, nor was he being paid any profits out of the business carried on thereafter. Hence appellant was not liable to render accounts.
Citing the above proposition arrived at by the Apex Court, the learned Counsel appearing for the appellant would exhort that the respondent was not a partner in 1978 and 1986 firms and it cannot be said that he continues to be a partner and he has not retired and that he can at the most sue for the rendition of accounts of the earlier partnership firm of 1956, to which, admittedly, he is a partner and not in the other reconstituted firms. But it must be noted in the above judgment that the first partnership firm had been mutally dissolved and there is no desertion among partners on dissolution.
78. It is not in dispute whether a retired partner can claim to be a partner in the reconstituted firms or is he entitled to ask for the rendition of accounts of the erstwhile partnership firm, which is dissolved, so as to comply with the proposition of Law, as propounded by the Apex Court in the above judgment. Here, the very question that is at stake is the retirement of the defendant from the 1956 partnership. When the facts and circumstances do not favour to justify the manner in which the defendant has been announced to have retired, the subsequent events that are said to have taken place after the retirement of the partner could not be held valid. In other words, the very retirement of the defendant should have been established by the plaintiff to be valid and legal and since it is not established, the retirement of the defendant from the partnership firm of 1956 is not acceptable. Hence, the constitution of the new firms of the year 1978 and 1986, without the defendant being a partner cannot be held to be either validly constituted or legally carried on and hence the plea of the appellants to justify the subsequent conduct of the remaining partners is not at all acceptable and point No. 2 is answered accordingly against the appellants so far as they carried on with the business independently using the trade marks of the original firm.
79. Point No. 3: Under Ex.A-22 registered Will dated 4.11.1980, executed by V.K. Kaliappa Gounder-father of the plaintiff and defendant in para No. 5 of the Will, he has made it very clear that his share of capital in the business, the estimate of his share of the trade mark, shall be shared by all the four sons equally. The value of the trade mark as termed in Tamil therein, would be interpreted by the plaintiff to be that of the goodwill and not the trade mark itself and such interpretation if to be admitted, would even mean that all the four sons would only be entitled to the goodwill in the business and not the trademarks themselves. In such event, the plaintiffs, would claim that the trade marks belongs to the partnership firm of 1978 and on the part of the defendant, the same could be claimed as that of the trade; marks belonging to the partnership firm of 1956. Again, everything depends on, whether it is the firm of 1956 or the 1978 that is entitled to the trade marks that are claimed in both the suits above. Since already a decision has been arrived at that the retirement of the defendant from the 1956 firm is not true and binding on him and that the new partnership constituted on 1.4.1978 taking over the assets and liabilities and the trade marks of the 1956 firm is also not valid, the recitals in para No. 5 of Ex.A-22 Will executed by V.K. Kaliappa Gounder is in no manner going to tilt the balance regarding the stand already taken with regard to the rights of parties in the partnership firm and its business.
80. The lower court has reason to conclude that all the documents under Exs.A-16 to A-19 relates to plaintiffs father and his other sons. From the evidence it comes to be known that the defendant was not at all aware of all those proceedings nor the defendant was issued with any notice regarding Exs.A-18 and A-19 and hence the proceedings under Exs.A-16 to A-19 had taken place in the absence of the defendant and behind his back and hence absolutely there is no proof of the defendant’s retirement from the partnership firm. The lower court has also reason to conclude that the further creation of yet another partnership as per Ex.A-20 partnership deed dated 11.6.1986 i.e., a little after the death of V.K. Kaliappa Gounder, reconstituting the firm with V.K. Arumugam, V.K. Sivaprakasam and V.K. Shanmugam and its partners under the name and style of V.K. Kaliappa Gounder Sons’ removing the ‘&’, thereby showing that the characteristics and nature of the earlier partnership were completely different from that of this newly constituted one in order to deny the rights and interests of the defendant. In the earlier case, what happened to the shares of the defendant had also happened to the share of the fathers as though on the death of the father, all the remaining partners of 1978 partnership have mutually agreed to continue and carry on the said business in partnership from 29.5.1986 i.e., from the very next day of the death of the father and the name of the firm modified and altered as ‘V.K. Kaliappa Gounder Sons’ thus removing ‘&’, thereby taking over all the assets and liabilities of the partnership business hitherto carried on by V.K. Kaliappa Gounder and sons at their book values as on 28.5.1986 and converting and treating the balance standing to the credit of the respective partners in the account books, treating the same as capital contributed by them i.e., in the very same manner they have done while constituting the partnership dated 1.4.1978. The plaintiffs would come forward to say that it is distinct and different partnership from the earlier ones and that the defendant has absolutely nothing to do with the same. The lower court after thorough discussion of the facts and circumstances, in the light of the evidence available, has concluded that it has been established that the defendant was not aware of the creation of this partnership deed in Exs.A-19 and A-20 and yet another partnership deed created by them after the death of one of the partners namely V.K. Shanmugam in Ex.A-1. The lower court has reason to conclude that the defendant was kept in dark and that absolutely there is no proof either for the retirement of the defendant from the partnership of the year 1956 or to have known the coming into being of the partnerships of 1978 or 1986 or even 1989 and that under Ex.A-22 Will, the father has given the trade mark value and goodwill to the defendant. Giving effect to the addendum in Ex.A-47, dated 2.11.1959 that had been entered into in between V.K. Kaliappa Gounder and his four sons, thereby the father V.K. Kaliappa Gounder asking all his registered trade marks and transferring them to the partnership dated 1.2.1956, thus the said partnership becoming the full fledged owner of all the trade marks, as admitted by P.W.1 regarding the partnership business run by all, the lower court would conclude that in the absence of any proof for the retirement of the defendant from the said partnership firm, since in law he is sailing along with the other partners notwithstanding the fact that the plaintiffs, acting prejudicial to the interests of the defendant, have effected certain changes in the recitals of the subsequent deeds Exs.A-19, A-20 and A-1. For the above discussions held, it has to be held that the plaintiffs, are not exclusively or absolutely entitled to the ‘A’ schedule trade marks, since under originally constituted firm dated 1.2.1956, the defendant is also entitled to the trade marks equally. Hence, this point is answered against the plaintiffs and in favour of the defendant to the effect that the plaintiffs are not the exclusive and absolute owners of the trade marks forming the ‘A’ schedule suit property.
81. Points 4 and 5: Jointly dealing with both the above points regarding the validity of Exs.B-4 and B-42 on one hand and the defendant’s right to carry on independent business under the impression that he has absolute and exclusive rights over the trade marks and the business, Ex.B-4 dated 31.3.1986 is a declaration by the father V.K. Kaliappa Gounder, typed in English in his letter head and signed by him below in Tamil, He has stated that he is the holder of the excise licence L.4 No. 115/BHB/75, further certifying that the building in Which the business is being run, belongs to his eldest son V.K. Subramani and would further authorise him to run the above concern on his behalf, thereby making a request with the concerned authorities to approve this suggestion to run the beedi trade marks ‘Sun’, ‘Medal’, ‘G.Jaihind’, ‘Iqbal’ etc. and allow the defendant not only to make use but also to continue to do the business, ultimately revoking the power that he had already given in favour of V.K. Arumugam, thereby further permitting his eldest son V.K. Subramani (the defendant) and entitling him to the said concern from 15.1.1987 onwards.
82. Regarding Ex.B-4, D.W.1 the defendant would depose that he was running the business in the said trade mark and that he is entitled to the trade mark and to run the business. Further, from Ex.B-4, it comes to be known that the defendant did not retire from the 1956 firm in the year 1978 and it is the evidence of P.W.1 also that the beedi business was carried on by the defendant at his premises. It is Ex.A-22, which recites that after the lifetime of V.K. Kaliappa Gounder, all the four brothers are entitled to the trade marks. But, P.W.1 would deny the right of his father to execute the Will and it is an admitted fact by P.W.1 himself in evidence that under Ex.A-22 Will, the trade marks value and goodwill belongs to all the four sons. It is his further admission that under the partnership deed, his father has also given the right to all the four sons and that the defendant is running the business for more than 15 years obtaining licence from the Central Excise Department and the gate pass issued by the Central Excise Department officials would show the goods passed out of the business premises. The defendant as D.W.1 would also speak to the effect of his father permitting him for doing the business and obtaining the licence and making use of his right in the trade mark, he was doing business. The defendant, in proof of his contention, would also file Exs.B-5 to B-30 gate passes and Exs.B-31 to B-36 challans and Exs.B-37 to B-41-‘A’ forms. His further firm case is that he did not retire from the partnership. Ex.B-1 Trade Mark Journal would also be marked to show that the defendant has right in the trade mark. All these documents would well establish that the defendant did not retire from the firm, but continue to do business in the trade mark of the partnership firm.
83. Further, relevance could be placed on Ex.B-42 the unregistered will dated 30.3.1986, the scribe of which is one Adimulam and the defendant would depose that the same was reduced into writing in the presence of his father and brothers and attested by one Govindaswamy, Doraiswamy and Samraj. The defendant would further adduce evidence to the effect that he alone is entitled to do the business in the trade mark and he has to give shares to the others. D.W.3 the attesting witness would speak to the execution of Ex.B-42 Will and that himself, Govindaswamy and Samraj were present at the time of its execution. D.W.2 is the attesting witness of Exs.B-2 and A-50, which are one and the same document filed by the rival claimants. Analysing the evidence of P.W.1 and D.Ws.1 to 3, thereby attaching importance to the evidence of P.W.1 and D.W.1 the court below would arrive at the conclusion that it has been clearly established under Ex.A-22 registered Will that it was given effect to and the shares had been taken possession of by the sharers and the parties are in possession and enjoyment of the same according to the recitals of Ex.A-22 registered Will and in the light of such developments, especially Ex.A-22 having been acted upon, the lower court would arrive at the conclusion that Ex.B-42 unregistered Will is not true and valid. Moreover, as per the norms fixed by the Apex Court, regarding the proof of a Will, in its judgment reported in H. Venkatachala Iyengar v. B.N. Thimmajamma and Ors. , the ingredients that are to be proved are fourfold. They are:
(i) has the testator signed the will?
(ii) Did he understand the nature and effect of the depositions in the will?
(iii) Did he put his signature to the will knowing what it contained? and
(iv) Whether the special requirements for attestation prescribed by Section 63 of The Indian Succession Act have been complied with?
Unless all these above requirements of Law are strictly proved by the defendant, the said unregistered will marked as Ex.B-42 cannot be accepted to have been validly proved in law, so as to act upon the contents of the document. Hence, the lower court has reason to reject Ex.B-42.
84. Ex.B-2 and Ex.A-50 is an unregistered agreement dated 17.1.1957, said to have been entered into between the father and four sons, wherein they have agreed to the effect that in future, if they are placed under a situation that they could not carry on with the partnership business as contemplated under Clauses 7 to 11 of the partnership deed dated 1.2.1956 and while dealing with all the five trade marks what shall be the attitude of the partners. It has been contemplated in the said document that in case they were not able to carry on together with the business, each of the partners is entitled to make use of the trade marks independently and carry on with the business independently on his own accord, thus making it clear that such arrangements could only be among the five members of the partnership and the same should not be assigned or sold to third party. This document is projected by both sides as Ex.A-50 by the plaintiff and as Ex.B-2 by the defendant. From this document it is quite evident that both the plaintiffs and the defendant are equally entitled to freely make use of the trade marks of the partnership firm and no one is entitled to question the usage of the trade marks by the other. But, the learned trial Judge has arrived at the conclusion that parties have taken possession of their respective shares, as per Ex.A-22 dated 4.11.1980 and would conclude that there was no necessity to give effect to this document nor could it be feasible to reject the same as an invalid document. No valid or tangible reason has been assigned by the lower court for rejecting this document and hence the decision of the trial court is not correct in this regard.
85. From all the above discussions, it is held that the lower court is right in its conclusions arrived at based on all the evidence analysed. The court below has observed that it is clearly proved by oral and documentary evidence as well that the defendant did not retire from the partnership firm and he has also got right over the trade marks using the same in his beedi business as seen from the labels in Exs.A-23 to A-26 and Exs.A-31 and A-32 and further to write that Exs.A-14 and A-17 also proved to the effect that the defendant is still a partner and under Exs.A-16 and A-17, his rights could not be taken away and the same is affirmed by Ex.A-22 Will executed by the father in the year 1980; that all the four sons have got equal rights in the trade marks and so the defendant is also equally entitled to make use of the trade marks as it is by the plaintiffs. This Court is in perfect agreement regarding this conclusion arrived at by the lower court.
86. From the various defence documents marked in Exhibit ‘B’ series, it also comes to be known that the defendant is independently doing business making use of the trade marks obtaining the licence and the contention of the defendant is that he is entitled to do business in the same trade marks and hence the independent business, making use of the trade marks, is justified. But, the lower court having rightly found that the defendant is one of the partners of the firm, has wrongly arrived at the conclusion that he cannot carry on an independent business as against the partnership firm using the same trade mark and has arrived at the conclusion that the suit for the relief of injunction is maintainable. The court below has decided the question of maintainability of the suits based on the facts that the suits have been filed by one partner in the representative capacity and not making the other partners as parties to the suits. The lower court would further arrive at the conclusion that since the defendant is also one of the partners of the firm, the plaintiff is not entitled to seek for the relief of permanent injunction, restraining the defendant from interfering with the registered trade marks and further for a mandatory injunction directing the defendant to deliver up all the wrappers and labels. But, at the same time, the court below would find that the defendant being a partner of the firm is also not entitled to carry on independent business in rivalry to the partnership firm of which he is a partner and hence the lower court finds it necessary to restrain the defendant from carrying on with the business independently, making use of the trade marks by means of an order of injunction and would restrain the defendant from carrying on his business, in the aforesaid manner, independently. At the same time, the lower court cannot also question the validity of the plaintiff carrying on with the business, making use of the suit trade marks leaving the defendant, as against the letter and spirit of the partnership deed and the terms and conditions of the same coupled with the position of law. But since there is no cross objection filed on the part of the defendant seeking for the said relief of injunction against the plaintiffs, the lower court would restrict itself from making an order to the effect that the plaintiff is also not the exclusive owner of the trade marks and would pass a permanent injunction for the limited purpose of restraining the defendant from carrying on with the business independently making use of the suit trade marks. However, the business so far carried on right from 1.4.1978 till the date of filing of the suit under the garb of two partnerships constituted respectively on 1.4.1978 and 11.6.1986, since do not have any legal sanction, could only be branded to have been carried on not with the avowed objectives as enshrined in the original partnership deed dated 1.2.1956 nor in accordance with the relevant provisions of law. Therefore, in the above circumstances, the sudden conclusion arrived at by the trial court that the defendant is not entitled to make use of the suit trade marks for his independent business and that the plaintiffs suit for the relief of injunction is maintainable, does not seem to be correct. In view of Ex.B-2 and Ex.A-50 agreement dated 17.1.1957, both the plaintiffs and the defendant are equally entitled to independently make use of the suit trade marks in an exclusive manner for their independent business of the like nature and no one will have the upper hand to question the validity of such user of the suit trade marks by the other. Hence, automatically, the only conclusion that could be arrived at is that the plaintiffs are not at all entitled to seek for a restrictive injunction against the defendant, so far as the user of the suit trade marks by the defendant is concerned. At this score, the suit becomes not maintainable for the relief of injunction against the defendant. The theory of the trial court that only the defendant cannot make use of the suit trade marks for his independent business without joining hands with the plaintiffs and that the plaintiffs could maintain a suit against the defendant is not only illogical but also not maintainable in Law. What norms, rules, regulations apply to the defendant, very well applies to the plaintiff also and hence no one can gain the upper hand against the other so far as either making use of the suit trade marks or for maintaining a suit against each other are concerned. Hence, it is safe to conclude that both the plaintiffs and the defendant, in the light of Ex.B-2 and Ex.A-50 agreement, are entitled to make use of the suit trade marks for their independent businesses, but none of the parties could have the right to question the validity of the user of the same by the other by any means, much less by means of a suit for Permanent Injunction.
87. Nor is it correct to say that the acts of the Registrar of Firms in effecting the entries into the relevant registers maintained by him, such as form ‘A’ and that such entries could be approved to have been done validly and in adherence of the rules. Hence, the entries effected regarding the reconstitution of the firm as per Ex.A-19 dated 1.4.1978, Ex.A-20 dated 11.6.1986 and as per Ex.A-1 dated 12.7.1989 and then modifying the same and reconstituting with four other working partners are all illegal and bereft of any force of Law since all such acts have been done independently by the other partners, deliberately excluding the defendant, without adhering the provisions of Law. Hence, all such acts done by the remaining partners right from 1.4.1978 till the date of filing of the suit and that of the acts done by the Registrar of Firms regarding his sphere of activity concerned with the affairs of the partnership business of the plaintiffs and the defendant are hereby resented and deprecated. So far as the question of the defendant that the suit is bad for non-joinder of the Legal Representatives of the deceased partner Shanmugam is concerned, it is enough to say that since there is a rule incorporated in the original partnership firm dated 1.2.1956 to the effect that in the case of death of a partner, his amounts could be settled within the end of the calendar month in which he died, in favour of his legal heirs and that the remaining partners could carry on with the partnership business, there is no necessity to implead the heirs of the deceased as L.Rs. But, there is absolutely no evidence available on record for having settled the accounts or the shares of the deceased V.K. Kaliappa Gounder and thereafter that of the deceased V.K. Shanmugam. But this question has absolutely no bearing on the present suit especially confining to the prayer and hence if at all parties are aggrieved in any other manner than what is prayed for they could agitate those things only in a different suit. It is enough to say that leaving the defendant, for no reason assigned, carrying on with the business on the part of the plaintiffs, and on the part of the defendant also without raising his voice at any stage from 31.3.1978 till the filing of the suit in agitating his rights in the partnership business much less without a say of his doing independent business making use of the same or similar trade marks of the suit would all raise many a question unanswered so far as the business of both are concerned. It is glaring that only as a continuing partner, the defendant herein, has been discarded from the partnership firm for no better reason assigned on the part of the remaining partners. No tangible reason has been assigned by the lower court for the plaintiffs to carry on with the business on their own accord, taking over the assets, liabilities, properties, trade marks and goodwill of the original firm of 1956, leaving the defendant which should have also been equally discredited.
88. Therefore, for settling things on the commitments of the firm and for rectification of the past blunders committed both on the part of plaintiff and the defendant and to revive the partnership in terms of the original partnership deed dated 1.2.1956 – the remaining partners of the plaintiffs’ side and the defendant joining hands with each other and taking over the assets and liabilities of the firm and business run on the part of both, the properties thereon, the trade marks numbering five, which form part of the suit ‘A’ schedule properties and that of the suit ‘B’ schedule properties and deciding about the actual trade marks to be used in future to carry on with the partnership business with the same firm name, place of business and with such trade marks and the goodwill, as suggested by the trial court, would see many a problem solved and for a smooth running of the business for the common good of all. If such a compromise is effected among parties in an amicable manner for the welfare and well being of all, it could be done within a span of six months from this day on such terms and conditions and intimating the authorities concerned regarding the usage of such of or all the suit trade marks for such a common business, so as to enable the authorities concerned, especially the Registrar of Firms to effect the correct entries into the relevant registers, in terms of the partnership deed dated 1.2.1956, thus rectifying the inconsistent entries effected without analysing the facts and circumstances encircling the whole case. A stitch in time saves nine. These remarks are only offered in the best interest of both the parties and the same shall have no bearing on the conclusions of this case. It is also relevant to point out at this juncture that even the dissolution of the partnership deed dated 1.2.1956 as on 28.5.1986 has not been properly or in the manner prescribed by Law done, either by the plaintiffs or carried out in the registers by the Registrar of Firms concerned.
89. The Registrar of Firms concerned is hereby directed to revive the partnership dated 1.2.1956, provided all the existing partners, such as the plaintiffs and the defendant and those who have got legal rights in terms of the partnership deed dated 1.2.1956 come forward to revive the said partnership deed, effecting such entries into the relevant registers in terms of the said deed and in accordance with Law and issue such orders that are necessary for a smooth running of the business by all the partners in a combined manner. These remarks are only optional for adoption at the instance of parties and not imposed as a condition for the future course of action regarding the business.
90. In result, subject to the above clarifications and remarks, both the above appeal suits fail and the same are dismissed. The common judgment and decree dated 20.9.1996 made in O.S.Nos. 49 of 1988 and 4 of 1991 by the Court of Principal District Judge, North Arcot at Vellore are hereby confirmed, subject to the above modifications and other clarifications.
91. However, in the circumstances of the case, there shall be no order as to costs.