THERMOFRIZ,INSULATIONS PRIVATE LIMITED. ,CALCUTTA v. VIJAYA UDYOG
1981-01-16
J.D.JAIN
body1981
DigiLaw.ai
J. D. JAIN ( 1 ) THE facts leading to this application by the defendant succinctly are that the plaintiff-M/s. Thermofriz Insulations Private Limited instituted a suit for injunction, rendition of accounts and damages etc. , on the allegations that they were registered proprietors of the trade mark "thermofriz" under registration Number 283711/b in Class 19 in respect of non-metallic fibre boards tor use as building material for ceiling and panelling, that the same had been widely advertised having been written in a special style and the plaintiff had acquired a distinctive reputation because of the superiority of their goods. However, the defendant. Shri Mohan Rai trading as Vijay Udyog fraudulently and dishonestly adopted the trade mark THERMOFRI2 in order to gain undue advantage of the reputation of the plaintiff and started passing off his inferior goods as that of the plaintiff. ( 2 ) DURING the pendency of the suit, one Vinod Kumar Bhuwalka, sole proprietor of firm styled M/s. Vijay Chemicals moved an application under O. XXII Rule 10 read with Section 151 of the Civil P. C. (hereinafter referred to as the Code), being I. A. No. 1005/80, for substitution in place of the original plaintiff on the ground that the plaintiff-company had, by a deed of assignment executed on 30th November, 1979, assigned all proprietary rights, title and Interest in the registered trade mark "thermofriz" to him along with its goodwill. It was urged that all the rights arising under the aforesaid registered trade mark had thus devolved on him and he had become entitled to use the same in his own name instead of the plaintiff-company and was also entitled to take all actions against the persons infringing the said trade mark including the defendant. This application was opposed by the defendant, inter alia, on the ground that having assigned the trade mark to Shri Vinod Kumar Bhuwalka, the plaintiff ceased to be dominus litus and as such they were not entitled to continue with the suit and their name be struck off the plaint. Of course, tha applicant was put to proof of the alleged assignment. ( 3 ) ON 1st May.
Of course, tha applicant was put to proof of the alleged assignment. ( 3 ) ON 1st May. 1980, the learned counsel for the defendant, Shri Anoop Singh stated that he had no objection to the substitution of the petitioner i. e. , Shri Vinod Kumar Bhuwalka in place of the existing plaintiff subject to all just exceptions and without prejudice to the rights of the parties to raise any plea according to law and an order was made accordingly. ( 4 ) THE defendant has now come up with this application under Section 151 of the Code. He has raised an objection that the present plaintiff has no right to continue with this suit for the following reasons; 1. The suit is based on tort and as such there could be no assignment of the right to sue for damages under law. 2. The plaintiff cannot be substituted in a suit for perpetual injunction which is a discretionary relief and arises out of the tortious act, 3. The plaintiff cannot continue with the present suit on the same cause of action, the said cause of action having lapsed on the original plaintiff ceasing to exist. 4. The right to sue could not be assigned under law. ( 5 ) IN reply counsel for the present plaintiff has asserted that all these objections were open to the defendant in opposition to his application for substitution under Order XXII Rule 10 of the Code and he not having raised the same was debarred from raising any fresh ground of objection. Further, according to him, the petitioner having been already substituted in place of the original plaintiff the question of rejection of the plaint does not arise. On merits it is contended that rights under the trade mark in question having been assigned to the present plaintiff, he had acquired all rights to continue with the present suit and the Court, having already exercised its discretion in favour of the plaintiff by substituting him, was precluded from entertaining any such plea. He" asserts that the cause of action is continuing one and even otherwise he is entitled to continue with the present suit, ( 6 ) I have heard counsel for the parties at length and bestowed my careful thought and consideration on the pointscanvassed during the course of arguments.
He" asserts that the cause of action is continuing one and even otherwise he is entitled to continue with the present suit, ( 6 ) I have heard counsel for the parties at length and bestowed my careful thought and consideration on the pointscanvassed during the course of arguments. The learned counsel for the plaintiff has, at the out set, canvassed that the defendant ought to have raised the objection to the right of the present plaintiff to proceed with the litigation when application was made by him for substitution under Order XXII Rule 10 of the Code and he cannot be permitted to take the objection at this stage, i e. , after his substitution as plaintiff. In other words. the defendant cannot, in one breath, say that he has no objection to the substitution of the present plaintiff in place of original plaintiff but in the next breath urge dismissal of the suit on the ground that there could be no assignment of mere right to sue. This according to him, amounts to approbation and reprobation which is not permissible under law. I would have surely accepted this argument at its face value but for the reason that the defendant simply stated no objection so far as substitution of the present plaintiff on the ground of assignment of trade mark was concerned. However, he made it abundantly clear that it would be without prejudice to his rights in the suit. It will, inter alia, imply that he can put forward all the defences to non-suit the plaintiff which are open and available to him under the circumstances. It is pertinent to note that the application itself was for substitution of the present plaintiff and not for mere addition. So the original plaintiff had to go in any case. It is, of course, true that Rule 10 of Order XXII is enabling one and is based on the principle that the trial of a suit cannot be arrested merely by reason of a devolution of interest of the party in the subject-matter of the suit. So, the person acquiring the interest may pick up the thread and continue the suit with the leave of the Court but if he does not choose to do so, the suit can well be continued with the original party.
So, the person acquiring the interest may pick up the thread and continue the suit with the leave of the Court but if he does not choose to do so, the suit can well be continued with the original party. Of course, the person acquiring the interest will be bound by or can have the benefit of a decree as the case may be. However, it was a matter which should have been taken into consideration by the present plaintiff before rushing to the Court for substitution. It may be that the defendant was clever enough not to object to the substitution of the present plaintiff in lieu of the original plaintiff as he could well foresee the disability on the part of the present plaintiff in continuing the suit as a whole or in part. Anyhow, the order of this Court dated 1st May, 1980 on I. A. 1005/80 is quite explicit and unequivocal in terms, in that, substitution was allowed subject to all just exceptions and without prejudice to the rights of the parties to raise any pleas according to law. Even otherwise, from the mere fact that a person has been substituted in lieu of the original plaintiff, it cannot be inferred or taken for granted that he is entitled to every relief claimed in the suit as a matter of right. Certainly substitution in itself does not confer any such right. So, it was for the plaintiff to have considered all these aspects and the consequence as flowing from his substitution in place of the original plaintiff before making the aforesaid application. He cannot now cry over spilt milk. ( 7 ) THE principal objection raised by the defendant in this application is that the suit it based on tort, namely, infringment of registered trade mark of the original plaintiff and damages sustained by the plaintiff on that account. Of course, an action for passing off is also incorporated in the plaint. So, the same was not an actionable claim and being a mere right to sue could not be assigned. Reference in this context has been made to clause (e) of Section 6, Transfer of Property Act which says that a mere right to sue cannot be transferred Thus, action tor damages in tort is not transferable, it not being in the nature of a debt or beneficial interest in any Immovable property.
Reference in this context has been made to clause (e) of Section 6, Transfer of Property Act which says that a mere right to sue cannot be transferred Thus, action tor damages in tort is not transferable, it not being in the nature of a debt or beneficial interest in any Immovable property. It does not amount to even a right or interest in any property as such. This distinction has been drrawn very clearly in a number of reported decisions. In Glegg v. Bromley, (1912) 3 KB 474, Mrs. Glegg was a plaintiff in an action against lady Bromley for slander. She, being at the time largely indebted to her husband, on May 21, 1910, executed in his favour a deed of assignment, whereby, after reciting that he had requested her to give him further security which she had agreed to do, she assigned to him "all that the interest, sum of money, or premises to which she is or may become entitled under or by virtue of any verdict, compromise, or agreement which she may obtain, or to which she may become party in or consequent upon the said action or otherwise howsoever, under or by reason of the same, to hold thesame. . . . . . . . . . . . . . . subject to redemption on payment of all moneys due to him . ( 8 ) SUBSEQUENTLY, the action brought by Mr. Glegg against the defendant resulted in a verdict for her. One Mr. Hay against whom too Mr. Glegg had brought an action for false representation and against whom her suit had been dismissed, thereupon instituted garnishee proceedings against the defendant to attach the amount of damages recovered by Mrs. Glegg in satisfaction of the costs due to him in his suit. Mrs, Glegg s husband also claimed to be entitled to those damages under the assignment from his wife to him. It was held that the assignment was not an assignment of a mere expectancy, or of a cause of action, but was an assignment of property, that is, of the fruits of an action as and when recovered, and that it was consequently not void.
It was held that the assignment was not an assignment of a mere expectancy, or of a cause of action, but was an assignment of property, that is, of the fruits of an action as and when recovered, and that it was consequently not void. Fletcher Moulton, L. J,, while dealing with this aspect of the matter observed "we are all agreed that you cannot, assign a cause of action for a personal wrong, and I am not sure that some of the words here might not bear a meaning which would cover such an assignment. . . . . . . . . . . . . . . . . . . . . It is clearly in- tended to assign the fruits of the action so that whet ever benefit comes from the action shall go to Mr. Glegg by way of further security, but there is nothing which gives him the right to intervene in the action or which is in any way against public policy," ( 9 ) THIS view was adopted in Rajamanickam Chetty v. Abdul Halim, AIR 1941 Mad 389 . In that case the plaintiff had asked for a decree tor Rupees 15,000. 00 as damages flowing from the wrongful termination of a lease in his favour and the entry upon the leased premises by the defendants. It was held that "there cannot be an assignment of a suit which has been filed for the purpose of recovering damages, either in contract or in tort. It is lawful, however, for a plaintiff in a pending suit to assign the benefit which he may obtain under the decree to be passed in the suit but this does not give the assignee of the fruits of the action the right to interfere in proceedings in the action. " ( 10 ) REFERENCE be also made in this context to Abu Mahomed v. S. C. Chunder, (1909) ILR 36 Cal 345, wherein Maclean, C. J,, said "if we look at Section 3 an "actionable claim" means a claim to any debt ; but this is not a claim to any debt; this is a claim to damages of an unascertained amount resulting from a breach of contract on the part of one of the parties to that contract.
Is it then a claim to any beneficial interest in moveable property not in the possession, either actual or constructive of the claimant, which the Civil Courts recognise as affording grounds for relief, whether such debt or beneficial interest be existent, accruing, conditional, or contingent" I do not think that we can properly bring a mere claim for damages for breach of contract within those words. Now, if it does not fall within the definition of "actionable claim," what is it except a mere right to sue, a mere right to sue tor damages resulting from an alleged breach of contract It seems to me that it is not anything more or less than that and it so, that cannot be transferred," ( 11 ) THUS, it is settled law that a right to sue for damages unascertained damages consequent upon a breach of contract or on tort does not constitute an actionable claim and as such it is not transferable being expressly for bidden by clause (e) of Section 6 of Transfer of Property Act. ( 12 ) WHAT then is the position In the instant case? A reference to the deed of assignment seems to be absolutely necessary. The relevant portion thereof is extracted below for ready reference ". . . . . . . . . THE Assignor hereby assigns and transfers to the Assignee all that the trade mark mentioned in the Schedule hereunder written together with Its goodwill to hold the same unto the Assignee and its successors absolutely. " ( 13 ) THE schedule, inter alia, covers the trade mark thermofriz bearing registration No. 283711b in Class 19 with respect to non-metallic fibre boards for use as building material for ceilings and panelling which is the subject-matter of the suit. Manifestly, there is an assignment of registered trade mark by the original plaintiff in favour of the present plaintiff along with its goodwill. Section 28 (1) of the Trade and Merchandise Marks Act (hereinafter referred to as the Act) confers on the registered proprietor an exclusive right to the use of the trade mark in relation to the goods in respect of which the trade mark is registered and to obtain relief in respect of infringement of the trade mark. Thus, the owner of registered trade mark has a proprietary interest therein.
Thus, the owner of registered trade mark has a proprietary interest therein. In other words the registered trade mark is looked upon as property and it can be assigned or transmitted whether with or without the goodwill of the business concerned. (See Secs. 36 and 37 of the Act), Hence there can be no doubt that assignment of the trade mark as such along with goodwill attached thereto by the original plaintiff in favour of the present plaintiff is perfectly legal and valid and as such it will fall within the ambil of Rule 10 of Order XXII of the Code which provides for all cases of assignment, creation or devolution of interest during the pendency of a suit, of course not falling within the scope of the previous Rules of the Order such as Rr. 2, 3, 4, 7 and 8. ( 14 ) THE submission of the learned counsel for the defendant, however, is that having obtained proprietary rights in the trade mark by assignment, the plaintiff is simply entitled to institute a fresh suit for infringement of the trade mark if and when the same is infringed in future, but he has no right to continue with the instant suit. This argument, to say least, overlooks the very purpose and object of Rule 10 O. XXII which, as observed earlier, is enabling one and entitles the transferee or assignee of the subject-matter of the suit to continue the same with the permission of the Court. . All that is required is that the interest must be an interest in the subject-matter of the suit i, e. , not merely with regard to right to sue. There may be cases where the assignment is merely of a right to sue. There may be cases where the assignment is of property with the right to sue and there may yet be another class of cases where the assignment relates to future property with or without right to sue. In any ease of transfer of a mere right to sue, a transferee cannot claim to come in under Order XXII, Rule 10 of the Code, but in the case of the transfer of the subject-matter of the suit the position would be different.
In any ease of transfer of a mere right to sue, a transferee cannot claim to come in under Order XXII, Rule 10 of the Code, but in the case of the transfer of the subject-matter of the suit the position would be different. The case of a person who gets a transfer of the subject-matter of the suit in praesenti must stand differently from the case of a person whose transfer becomes effective in future, when what is transferred is really the fruits of a decree. That is because the right to property comes into existence later and until then no claim to seek to be impleaded ability of the concern to earn profits over a course of years because of its reputation, location and other features. " ( 18 ) THUS, goodwill, by and large, covers every advantage which will attract the customers to purchase a particular product on account of its reputation, quality etc. , and the transfer of goodwill confers on the transferee the exclusive right to represent himself as carrying on such a business and as against the transferor the exclusive right to use the name under which the business has been carried on. In other words, the assignor of the trade mark along with goodwill is not entitled to use the same any more in relation to his own products. However, by no stretch of reasoning can its scope be extended so as to include even past causes of action which had accrued to the transferor or assignor of a trade mark. There is neither any basis nor any justification for such an unlimited construction; This argument of the plaintiff s counsel, therefore, is devoid of any substance. ( 19 ) TO sum up, therefore, I hold that the present plaintiff in this suit can surely continue with the same as regards reliefs (a) and (b) of the plaint However, he is not entitled to go ahead with the suit in respect of reliefs (c) and (d ). This application is disposed of accordingly, but no order is made as to costs. ( 20 ) THE case be now listed before Deputy Registrar for further directions on 31-1-1981.