JUDGMENT Shivdayal, J. 1. This appeal arises from an order passed by the Additional District Judge. Bhopal, setting aside the ex parte injunction which he had previously passed. 2. The appellants Abdullakhan, Gulam Mohammad, Yakubkhan and respondent No. 1 Mohammad Ismail, are all brothers, being sons of one Sahebkhan who died in 1948. Originally, Sahebkhan and his four sons constituted a firm and started Bidi business sometime about the year 1918 and adopted a trade-mark styled as 'Nag Chhap'. It is alleged by the plaintiffs that in the year 1943 Sahebkhan and hi- sons became separated by a private arrangement which was reduced to writing and was signed by all of them. Thereafter Sahebkhan and his three sons, the appellants, formed a firm and continued the Bidi business with the same 'Nag-Chhap' trade-mark. In August 1948, Sahebkhan died and the three brothers (the plaintiffs) continued the business under a fresh agreement of partnership. It is also alleged by the plaintiffs that the 'Nag-Chhap' trade-mark was registered in 1948 at Bombay under the Indian Trade Marks Act, in the name of the plaintiffs and it was exclusively used by them, and that the defendant Mohammad Ismail had no concern with that trade-mark. However, in the year 1954, the defendant started a separate business of manufacturing Bidi at Sagar and began to use the same trade-mark. This fact having come to the plaintiff's knowledge, they served a notice to Mohammad Ismail, upon which he stopped that business but the plaintiffs eventually discovered that the defendant No. 1 secretly shifted his business to Bhopal in 1955 and again used the 'Nag Chhap' trade mark, in conspiracy which defendant No. 2, whereupon the appellants instituted the present suit on January 25, 1956. They also made an application for issuance of a temporary injunction under Order 39 Rule 2, Civil Procedure Code, to restrain the defendant from using the 'Nag Chhap' trade-mark during the pendency of the suit. 3. The learned trial Judge at first passed an ex parte order but on the objection of the defendant, the same has been revoked and it is against the subsequent order that the plaintiffs have preferred this appeal. 4. In a matter like this, I have to see whether the discretion exercised by the learned trial Judge was so erroneous as to call for interference in appeal. 5.
4. In a matter like this, I have to see whether the discretion exercised by the learned trial Judge was so erroneous as to call for interference in appeal. 5. At this stage, I do not propose to go deeper and find out the respective rights of the parties; but prima facie it seems that in view of the separation agreement dated November 23, 1943, and in view of the fact that the trade-mark was registered at Bombay in 1948 in the name of the plaintiffs, they are really the owners of the trade-mark. They have thus a prima facie and presentable case. Shri Khan, Learned Counsel for the respondent contends that even on the plaintiff's own showing their father was also a joint proprietor of the trade mark and, therefore, on the death of Sahebkhan, the defendant also succeeded, just as the plaintiffs did, to the rights which Sahebkhan had. Here again, I will refrain from expressing any opinion on the question of law which is thus being agitated. Suffice it to say that prima facie the defendant did not inherit the right of using the trade-mark by starting a separate business and adopting the same trade-mark. Here is not a case where the defendant wanted to participate in the business of his brothers by virtue of his right of succession. Shri Khan has not been able to satisfy me by any law or authority that the defendant could start a new business and use the trade-mark of which the defendant's father was a co-proprietor with the plaintiffs. I would guard myself against discussing this question any further so that a fair trial in the lower Court may not be prejudiced. 6. Then Shri Khan contends that the plaintiffs disentitled themselves for the equitable relief because of laches. He invites my attention to the averment in the plaint that the plaintiffs gave a notice to the defendant in 1954, while the present suit was instituted in the year 1956. This contention is not sound. The averment in the plaint has to be read in full. The plaintiffs have said that in the year 1954 as soon as they came to know of the defendant No. 1 starting a business at Sagar under the same trade-mark, they gave him a legal notice whereupon the defendant stopped that business there.
This contention is not sound. The averment in the plaint has to be read in full. The plaintiffs have said that in the year 1954 as soon as they came to know of the defendant No. 1 starting a business at Sagar under the same trade-mark, they gave him a legal notice whereupon the defendant stopped that business there. In the second round, when they came to know that the defendant secretly shifted his business to Bhopal and there he treated using their trade-mark again, the plaintiffs brought this suit. I do not see any laches on the part of the plaintiffs and find that they were anxious to take legal action at the earliest opportunity. 7. So far as the balance of inconvenience is concerned, it has been strenuously urged by the Learned Counsel for the appellants that with the 'Nag Chhap' trade-mark, they have established a very high position in the Bidi market and their reputation will be at stake if the defendant is allowed to use that trade-mark, during the pendency of the suit and the consequential damage which would be caused to their reputation and goodwil will be irremediable. Shri Khan, on the other hand, contends that their loss will be irreparable if their business is stopped. 8. In a matter like this, the equities in favour of the parties have to be adjusted keeping in view the circumstances of the particular case. 9. In Read vs. Richardson (1881) 45 L.T. 54, the defendants undertaking to keep an account, Jessel, M.R. refused an interlocutory injunction, but the Court of appeal granted it because, while the defendants had only recently commenced to use their mark, and their trade-mark was admittedly not dependent on it, the plaintiffs had a large trade in connection with which they used a label alleged to be infringed, and their rights would have been irremediably and incalculably injured unless the injunctions were granted, if their case should be established at the trial. 10. In a similar case and in similar drew stances, the Mysore High Court issued an injunction in appeal setting aside the order passed by the first Court.
10. In a similar case and in similar drew stances, the Mysore High Court issued an injunction in appeal setting aside the order passed by the first Court. Recalling the principles on which injunctions are issued and ad interim reliefs are granted, it has been observed in that case that in cases of passing of actions, it is not necessary that there must be an element of fraud exercised or likely to be exercised by one party against another to justify issue of an injunction. It has been further held that its issue is governed by the balance of convenience as between granting or refusing such an ad interim relief, that is, on consideration as to the comparative mischief or inconvenience which might arise from granting or withholding such an interlocutory injunction. (A.I.R. 1951 Mys 29). 11. Relying on a number of decisions, it has been stated in Venkateswaran's book on Trade Marks Act, at page 456, that where the plaintiff's trade is considerable and the defendant's business has just commenced, or is small and negligible, an interlocutory injunction will ordinarily be granted. 12. Having regard, to the material available before me, I am satisfied that the refusal of Injunction would cause the plaintiffs greater inconvenience and injury and that the issue thereof would result in a comparatively far lesser injury and inconvenience to the defendant. The plaintiffs is admittedly an old established business and a very large one and that their trade-mark has become well known, whereas the defendant's business has come into existence only for a few months before the institution of the suit The rights of the defendant can be safeguarded by imposing suitable conditions. 13. A perusal of the order passed by the learned trial judge shows that these considerations have been ignored by him when they have prevailed not only in a number of cases decided in your country but also in England and these principles which have been summed up by me above, form the settled law on the subject. Two considerations really prevailed with the learned trial Judge. Firstly, he thought prima facie that the defendant was his father's heir and therefore a co-sharer in proprietorship of the trade-mark Secondly, there was delay in bringing this action I have dealt with both these points above and on the face of it, they are erroneous. 14.
Two considerations really prevailed with the learned trial Judge. Firstly, he thought prima facie that the defendant was his father's heir and therefore a co-sharer in proprietorship of the trade-mark Secondly, there was delay in bringing this action I have dealt with both these points above and on the face of it, they are erroneous. 14. Shri Khan, Learned Counsel for the respondent suggests that the defendant may be allowed to use the trade mark by refusing the temporary injunction and he is prepared to submit a regular account of the defendant's business in the Court so that in case the plaintiffs succeed, they can be compensated in money. The learned trial Judge has himself negatived this contention of the defendant and he has held that money cannot be adequate compensation in such a case because the continuance of the business by the defendant under the same trade mark may result in loss of reputation and the injury may be irreparable. 15. A similar suggestion was made in Ralli vs. Fleming 3 Calcutta 417 (at page 424), but it was negatived by the Calcutta High Court with these observations: In this particular case. I do not think that their keeping an account of sales would be a sufficient protection to the plaintiffs, because if the defendants were allowed to use these marks in the market for several months in order to sell their cloth, they would become as well known in the market as importers and sellers of the cloth as the plaintiffs; and so the very mischief which the injunction is intended to guard against would have been effected. This is another angle of vision which also favours the grant of an injunction in such a case. 16. It is suggested before me by Shri Patel, Learned Counsel for the appellants, that adequate safeguard will be provided for the defendant's rights in case the plaintiffs fail, by requiring the latter to keep regular accounts and to give an undertaking forthwith to compensate the defendant by paying him (defendant No. 1) one-sixteenth of the total net profits in case they fail Shri. Patel suggests one-sixteenth because putting the defendant's case at the highest, he is entitled to one-fourth share as a successor to his father who himself had one-fourth share in the partnership business of the plaintiffs. This suggestion is a very reasonable and acceptable one. 17.
This suggestion is a very reasonable and acceptable one. 17. Since I find that the learned trial Judge has not kept in view the real considerations which should weigh in granting or refusing a temporary injunction in a suit of this nature, and since I find that the discretion exercised by him in setting aside his earlier order is palpably erroneous and not judicial, this appeal must be allowed and an injunction must be issued. 18. I, therefore, allow this appeal, set aside the order passed by the Additional District Judge Bhopal and direct as follows:-- (1) The defendants shall be restrained from using the trade murk 'Nag Chhap' on any of the good manufactured or sold by him, with immediate effect, and until the disposal of the suit in the first Court. (2) The plaintiffs shall undertake and bind themselves in writing that in case they fail in the suit, they shall pay to defendant No. 1 one-sixteenth of the total net profits earned by them in their business during the continuance of this injunction. They shall also furnish solvent security to the satisfaction of the trial Judge for due performance of this undertaking. The plaintiffs shall comply with this direction within fifteen days from today. (3) The plaintiffs shall keep regular, complete and correct accounts of their business. (4) The plaintiffs shall prosecute their suit with due diligence and shall not delay the disposal thereof. (5) Costs in this appeal shall be costs in the cause.