{"id":109658,"date":"1998-11-24T00:00:00","date_gmt":"1998-11-23T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/bestochem-formulations-vs-dinesh-ayurvedic-agencies-and-on-24-november-1998"},"modified":"2018-07-07T03:38:58","modified_gmt":"2018-07-06T22:08:58","slug":"bestochem-formulations-vs-dinesh-ayurvedic-agencies-and-on-24-november-1998","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/bestochem-formulations-vs-dinesh-ayurvedic-agencies-and-on-24-november-1998","title":{"rendered":"Bestochem Formulations vs Dinesh Ayurvedic Agencies And … on 24 November, 1998"},"content":{"rendered":"
Delhi High Court<\/div>\n
Bestochem Formulations vs Dinesh Ayurvedic Agencies And … on 24 November, 1998<\/div>\n
Equivalent citations: 76 (1998) DLT 972<\/div>\n
Author: . M Sharma<\/div>\n
Bench: . M Sharma<\/div>\n<\/p>\n
<\/pre>\n
ORDER<\/p>\n
 Dr. M.K. Sharma, J. <\/p>\n
 1.     The  present  suit has been instituted by the  plaintiff  against  the  defendants  seeking for a permanent injunction restraining  the  defendants  from  passing off of the trade mark of the plaintiff as also the  copyright  of the plaintiff and also for rendition of accounts.\n<\/p>\n
 2.   The  defendant  No.2 filed an application under Order 7  Rule  11  CPC  praying for rejection of the plaint on various grounds raised in the application.  One  of  the grounds taken in the said  application  is  that  the  present suit is barred under Section 69 of the Partnership Act. The defendants  have stated that on the date when the present suit was filed  by  the  plaintiff,  the plaintiff was an unregistered firm and since no suit  could  be  instituted by a Partnership firm unless the firm is registered and  the  person  suing is shown in the Register of Firms as a partner in  the  firm,  the suit is barred and, therefore, is liable to be dismissed on that  count  alone.  It is, however, necessary to mention that apart from the  aforesaid  ground  several  other grounds have been raised by the  defendants  in  the  aforesaid application seeking for rejection of the plaint.\n<\/p>\n
 3.   However,  at the time of arguments, the learned counsel for  defendant  No.2  stated  that except for the ground taken by the  defendant  No.2  for  dismissal  of the suit on the ground of non-registration of  the  plaintiff  firm,  the  other grounds taken in the said application could  be  agitated  also  during the trial and, therefore, the said grounds are not pressed  at  this stage. In view of the aforesaid statement made by the counsel for  the  defendants,  the  said  present application under Order 7 Rule  11  CPC  is  considered  only  for  the purpose of deciding as to whether  the  suit  is  barred  under the provisions of Section 69 of the Partnership Act  and  the  defendant No.2 is given the liberty to raise the other grounds at a  subsequent  stage, if the suit survives and continued. Therefore, the  scope  of  the  present application is restricted only to the extent of the  objection  taken by the defendants that the suit is not maintainable and is liable  to  be dismissed in view of the provisions of Section 69 of the Indian Partnership  Act,  as on the date of filing of the suit, the plaintiff was  not  a  registered firm.\n<\/p>\n
 4.   Counsel for the defendants drew my attention to the statement made  by  the plaintiff in paragraph 1 of the plaint contending, inter alia, that the  plaintiff  is a registered firm. The aforesaid statement on the face of  it  appears to be a misstatement, inasmuch as, it is an admitted position that  on  the date of filing of the suit, the plaintiff was an unregistered  firm  and  obtained  registration  of the firm subsequent to the  filing  of  the  present suit. The documents placed on record clearly corroborate and  prove  and establish the aforesaid fact.\n<\/p>\n
 5.   The  plaintiff firm was originally registered on 25.7.1983,  but,  was  subsequently  dissolved before February, 1995 and thereafter  on  7.2.1995,  Shri Girish Kumar Juneja and Shri Vijay Kumar formed a new partnership  who  applied  for its registration on 23.9.1995. In pursuance of  the  aforesaid  application,  the firm was registered on 2.12.1997 and as such on the  date  of  institution of the suit in July, 1997, the firm was  unregistered.  The  counsel  appearing  for the plaintiff could not, but, admit  the  aforesaid  position  in view of the existence of several other documents on record.  I  also find on record that subsequently the plaintiff also sought for  amendment of the plaint on that count and the same was also granted. Thus, it is  to  be seen and considered as to whether the present suit instituted by  an  unregistered firm is maintainable or not. Section 69 of the Partnership Act  is  relevant  for  the purpose and all the Clauses  thereof  are  extracted  hereinbelow for proper appreciation of the issue in question:\n<\/p>\n
      “69.  Effect of non-registration.-(1) No suit to enforce a  right arising from a contract or conferred by this Act shall be  instituted  in  any  Court by or on behalf of any person  suing  as  a partner in a firm against the firm or any person alleged to be or to have been a partner in the firm unless the firm is  registered and  the  person suing is or has been shown in  the  Register  of Firms as a partner in the firm.\n<\/p><\/blockquote>\n
      (2) No suits to enforce a right arising from a contract shall  be instituted  in  any Court by or on behalf of a firm  against  any third  party unless the firm is registered and the persons  suing are  or have been shown in the Register of Firms as  partners  in the firm.\n<\/p><\/blockquote>\n
      (3)  The provisions of sub-sections (1) and (2) shall apply  also to  a  claim of setoff or other proceeding to  enforce  a  right arising from a contract, but shall not affect-\n<\/p><\/blockquote>\n
      (a) the enforcement of any right to sue for the dissolution of  a firm  or for accounts of a dissolved firm, or any right or  power to realise the property of a dissolved firm; or <\/p>\n<\/blockquote>\n
      (b)  the powers of an official assignee, receiver or Court  under the  Presidencytowns  Insolvency Act, 1909 (3 of 1909),  or  the Provincial  Insolvency  Act,  1920 (5 of 1920),  to  realise  the property of an insolvent partner.\n<\/p><\/blockquote>\n
      (4) This section shall not apply-\n<\/p><\/blockquote>\n
      (a)  to  firms  or to partners in firms which have  no  place  of business in [the territories to which this Act extends], or whose places  of  business in [the said territories]  are  situated  in areas  to which, by notification under [Section 56], the  Chapter does not apply, or <\/p>\n<\/blockquote>\n
      (b)  to  any suit or claim or setoff not exceeding  one  hundred rupees in value which, in the Presidencytowns, is not of a  kind specified in Section 19 of the Presidency Small Cause Courts Act, 1882(15  of 1882), or outside the Presidencytowns, is not  of  a kind  specified  in the Second Schedule to the  Provincial  Small Cause  Courts  Act,  1887 (9 or 1987), or to  any  proceeding  in execution  or other proceeding incidental to or arising from  any such suit or claim.”\n<\/p><\/blockquote>\n
 6.   According to the counsel appearing for the plaintiff, the suit against  the  defendants is not based on any contract and as such the provisions  of  Section  69  of  the Contract Act is not applicable. The  counsel  drew  my  attention to the averments made in the plaint in order to substantiate  his  submission that the suit is not founded upon any Contract. Counsel for  the  plaintiff further submitted that defendant No.2 has already been struck off  from  the array of parties and, therefore, the suit against defendant  No.1  and 3 is not based on any Contract, for whatever contract is referred to in  the  plaint  were all in respect of the Contract entered into  between  the  plaintiff  and defendant No.2. He further submitted that the plaint is  one  seeking  action  against infringement of the registered trade mark  of  the  plaintiff  and  also for passing off and rendition of  accounts  which  are  Tortuous  Act in their essential nature. He further submitted that  Section  69  of  the Partnership Act does not apply to suits of the  present  nature  which  are instituted for infringement of trade mark and copyright  and  as  such actions are in substance of deceit under the Law of Tort.\n<\/p>\n
      In  support  of his contention, the learned counsel  relied  upon  the  decision in Bengal Waterproof Ltd. Vs. Bombay Waterproof Mfg. Co.; reported  in  1997 PTC (17) wherein, it was held by the Supreme Court that an  action  for  passing  off is a common law remedy being an action  in  substance  of  deceit under the Law of Torts and wherever and whenever fresh deceitful act  is  committed,  the person deceived would naturally have a fresh  cause  of  action in his favour and thus, every time when a person passes of his goods  as  those  of another he commits the act of such deceit. It was  also  held  that  similarly whenever and wherever a person commits breach of  a  registered  trade  mark of another he commits a recurring act of breach  or  infringement of such trade mark giving a recurring and fresh cause of  action  at each time of such infringement to the party aggrieved.\n<\/p>\n
      The  counsel for the plaintiff also submitted that subsequent  to  the  filing  of  the suit, the plaintiff has obtained registration and  in  that  view  of the matter also, the present suit cannot be held to be  not  maintainable. He also submitted that the provisions of Section 69 is applicable  provided  the proviso added thereto is not applicable. The  proviso  states  that  if  in case the suit is for rendition of accounts then in  that  case  such  a  suit is maintainable although the firm was not registered  on  the  date  of  filing of the suit and thus, according to the counsel  since  the  suit is also filed for rendition of accounts by the plaintiff, the suit  is  maintainable.\n<\/p>\n
 7.   Learned counsel appearing for defendant No.2 refuted all the aforesaid  submissions and contended that on a bare reading of the plaint it would  be  apparent  that the plaintiff based its claim on a Contract. In  support  of  his submissions, the learned counsel referred to paragraphs 3,4,5 and 9  of  the  plaint. Counsel submitted that a bare perusal of the  aforesaid  paragraphs  would show that the plaintiff based his suit on the alleged  agreement  dated 2.6.1987. Counsel submitted that thus, the suit is clearly  hit  by  Section 69 of the Indian Partnership Act and relied upon the  ratio  of  the  decision  in Lalit Kumar & Ors. Vs. Municipal Corporation of  Delhi  &  Anr.; reported in 56 (1994) Delhi Law Times 123 where the suit was held  to  be not maintainable as the firm was unregistered.\n<\/p>\n
 8.   In order to appreciate the contention of the counsel appearing for the  plaintiff, I have looked into the averments made in the plaint. The  plaintiff  states that there was in fact an agreement between the plaintiff  and  defendant  No.2  dated 2.6.1987 on the basis of which  defendant  No.2  was  manufacturing  the  various drugs called  ‘BESTOGESIC  Oil’,  ‘GESTOCORDIAL  Syrup’, ‘SYNAFED’ AND ‘NORMALAX Granules’, for the infringement and passing  off  of  which the present suit has been instituted. It is also  stated  in  paragraph 9 of the plaint that there was some misunderstanding between  the  plaintiff  and defendant No.2, as a result of which the  agreement  between  the plaintiff and the defendants was terminated in 1996 and that even after  termination  of the said agreement, defendant No.2 has  been  manufacturing  the aforesaid products in similar packing and contents and thereby  committing the act of infringement as also passing off the trade mark as also  of  the  copyright of the plaintiff. Thus, the defendant No.2 as apparent  from  the  averments made in the plaint was manufacturing all the four  drugs  in  the same trade name atleast from 1987 and defendants No.1 and 3 are selling  and\/or  manufacturing  the goods of defendant No.2. It is  also  stated  in  paragraph 4 of the plaint that defendant No.2 under the agreement was bound  not to sell the aforesaid formulations to anyone. Thus, on a reading of the  contents  of the plaint, it is crystal clear that the present suit is  also  based on a Contract as pleaded in the plaint.\n<\/p>\n
 9.   Counsel  for the plaintiff referred to the written statement  and  the  counter  claim filed by the defendants to state that the suit is not  based  on  any  Contract  and it is merely a suit  for  restraining  infringement,  passing off and for rendition of accounts.\n<\/p>\n
 10.    Applicability of Section 69 of the Partnership Act could  be  looked  into at the very threshold. If the suit is based on a Contract for enforcement  of which the suit is instituted by an unregistered firm, the same  is  not  maintainable in law. The relevant date for examination of the same  is  the  date of filing of the suit. If on the date of filing of the suit,  the  suit  was not maintainable, it was void ab initio. Subsequent obtaining  of  registration  and\/or  averments made in the written statement  and  counter  claim  and\/or subsequent deletion of one of the parties would not make  the  suit valid. In this connection, reference may be made to a decision of  the  Supreme  Court  in M\/s. Siri Ram Finance Corporation and others  Vs.  Yasin  Khan  and  another; . In the said  decision  the  Supreme Court held that if a suit is hit by the provisions of Section 69 of  the Partnership Act on the date of filing of the suit would not be saved by  subsequent amendment in the plaint.\n<\/p>\n
 11.  The  plaintiff through an application got the name of  defendant  No.2  deleted from the array of parties on 15.9.1998. The aforesaid position,  in  my  considered  opinion, would not in any manner change the nature  of  the  suit which is still based on the alleged contract as in the said paragraphs  wherein the contract is pleaded has not been deleted as yet. Even otherwise  defendant No.3 has taken over the activities of defendant No.2 and,  therefore, dropping of defendant No.2 will not make any difference so far as the  bar  of Section 69 of the Indian Partnership Act is concerned.  The  provisions of Section 69(3)(a) would not also save the present suit from the bar  of Section 69 of the Indian Partnership Act as because the suit is  neither  for  enforcement of any right or power to realise the property of the  dissolved firm, nor the same is for rendition of any accounts of the dissolved  firm.  In this connection, reference may be made to a decision of  the  Supreme  Court  in Loonkaran Sethia etc., Vs. Mr. Ivan E.  John  and  others;  . In paragraph 21 of the said  judgment, it was held by the Supreme Court that a bare glance at Section 69  is  enough  to  show  that it is mandatory in character and its  effect  is  to  render  a  suit by a plaintiff in respect of a right vested in him  or  acquired  by  him under a contract which he entered into as a partner  of  an  unregistered  firm, whether existing or dissolved, void. The Supreme  Court  further  clarified the position by stating that a partner of  an  erstwhile  unregistered partnership firm cannot bring a suit to enforce a right  arising  out of a contract falling within the ambit of Section 69 of the  Partnership Act. The Supreme Court found that on the facts of the said case the  firm in question was not a registered firm under the Indian Partnership Act  and  it also could not be denied that the suit was also for enforcement  of  the  agreement  entered  into by the plaintiff as a partner  which  was  an  unregistered firm and that being so, the suit was undoubtedly found to be a  suit  for  the benefit and in the interest of the firm and  consequently  a  suit on behalf of the firm. It was thus held that the suit was clearly  hit  by  Section 69 of the Partnership Act and was not maintainable. In my  considered opinion, the ratio of the aforesaid decision is fully applicable to  the facts and circumstances of the present case also.\n<\/p>\n
 12.  Besides the plaintiff made a calculated mis-statement that on the date  of filing of the suit, the plaintiff firm was a registered firm. Such  mis-statement  is  apparent from a bare reading of paragraph 1 of  the  plaint.  Subsequently,  the  plaintiff admitted that the firm was not  a  registered  firm  on the date of filing of the suit, but, obtained registration  subsequent  to the filing of the suit. This Court granted an ad interim  injunction  in  favor of the plaintiff on the ground that the  plaintiff  was  a  registered  firm,  for reference of the same is also made in the  order  of  this  Court dated 16.7.1997. It is categorically stated in the  said  order  that the plaintiff as per the averments made in the plaint is a  registered  firm which was in fact a wrong statement on the said date. Thus, the plaintiff also did not come to the Court with clean hands. Thus, I hold that the  present suit filed by the plaintiff is hit by Section 69 of the Partnership  Act  and is not maintainable and the suit accordingly stands  dismissed  in  this count alone.\n<\/p>\n
      All the pending applications stand disposed of in terms of the  aforesaid order. Interim order passed by this Court stands vacated. No order  as  to costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
Delhi High Court Bestochem Formulations vs Dinesh Ayurvedic Agencies And … on 24 November, 1998 Equivalent citations: 76 (1998) DLT 972 Author: . M Sharma Bench: . M Sharma ORDER Dr. M.K. Sharma, J. 1. The present suit has been instituted by the plaintiff against the defendants seeking for a permanent injunction restraining the defendants […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[14,8],"tags":[],"class_list":["post-109658","post","type-post","status-publish","format-standard","hentry","category-delhi-high-court","category-high-court"],"yoast_head":"\nBestochem Formulations vs Dinesh Ayurvedic Agencies And ... on 24 November, 1998 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/bestochem-formulations-vs-dinesh-ayurvedic-agencies-and-on-24-november-1998\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Bestochem Formulations vs Dinesh Ayurvedic Agencies And ... on 24 November, 1998 - 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