Research › Browse › Judgment

Madhya Pradesh High Court · body

1996 DIGILAW 542 (MP)

Usha Sontake v. Shri Mahilla Grih Udyog

1996-06-26

S.C.PANDEY

body1996
JUDGMENT S.C. Pandey, J. 1. This is an appeal filed by the plaintiffs under section 96 of Code of Civil Procedure against the judgment and decree, dated 11.3.95, passed by Smt. Aradhana Choubey, IXth Addl. Judge to Distt. Judge Bhopal in Civil Suit No. 5-A/92. 2. This appeal has been marked to me by the order passed by. Hon'ble the Chief Justice as Hon'ble Shri Justice D.P.S. Chauhan has ordered that this case may be listed before any other Hon'ble Judge of this Court by order dated 27-3-96. Initially Hon'ble Shri Justice D.P.S. Chauhan had dismissed this appeal and the appellants had filed L.P.A. No. 44/95 against that order. A Division bench of this court set aside that order and remanded the case back to the learned single Judge for decision on merits of the case. The final judgment was passed by the division Bench on 4/12/95 consisting of Hon'ble Shri R.P. Awasthy and Hon'ble Shri R.S. Garg. JJ. When this case was called for hearing, it was pointed out by me that on 2/11/95, L.P.A. No. 44/95 was listed before Hon'ble the Chief Justice and myself. No order was passed on merits and the record of the courts below was sent for on that date. Both the counsel stated that they have no objection to my hearing this appeal as the order dated 2.11.95 was merely a formal order. 3. The appellants filed a suit against the respondent claiming the following reliefs. (i) Declaration that the Resolution of the defendants dated 19.4.83 to close down the Bhopal Branch is void, illegal and inoperative; (ii) Declaration that the direction of the respondents, contained in the letter dated 21.4.83 to hand over the charge of Bhopal Branch to Shri S. M. Dixit is totally void; (iii) Permanent injunction restraining the respondents from interfering with the management of the Bhopal Branch directly or indirectly in any manner whatsoever. 4. The appellant claimed in their plaint that the respondent No. 1 Shri Mahila Grih Udyog Lijjat Papad is society registered under the society Registration Act, 1860. It is also registered as a public Trust under the Bombay Public Trust Act, 1950. 4. The appellant claimed in their plaint that the respondent No. 1 Shri Mahila Grih Udyog Lijjat Papad is society registered under the society Registration Act, 1860. It is also registered as a public Trust under the Bombay Public Trust Act, 1950. It was claimed by the appellants that the object of the society, in accordance with the Articles of Association, was to promote economic, social, educational, cultural activities or any other field of activity like giving of scholarships to poor deserving students, medical aid and relief against provery without distinction of caste, colour or creed. 5. It was further alleged that the respondent No. 1 undertook one of the activities in connection with village industries as specified by the Khadi and Village Industries Commission Act, 1956. The society made the beginning with Papad-making. For this purpose, the society opened the doors for its membership of woman without distinction of caste, colour or creed, who could render physical work and who were not below the age of 15 on the condition that they were willing to abide by the objects and aims of the society and they were ready to file a pledge-form for that purpose. The pledge form was for giving an admission to the woman for membership of the society as per Article 1-A of the Association. Subsequently, by way of amendment adopted in the Annual General Meeting held on 8.8.76, the meaning of expression "membership" was extended was provided that any woman, who was working in the institution, became its member from the date on which she started working. (See Articles of Association 1-B). 6. It was also provided in the Article of Association that the respondent No. 1 could open branches at any town or village, but the pre-requisite condition for opening a branch was that the branch should have the minimum strength of 51 members in that village or town. (See Article 2 of the memorandum of Association). 7. It is alleged by the appellants that in accordance with Article 2 aforesaid, the respondent No. 1 could open a branch at Bhopal. The appellant No. 2 to 6 claimed that they were the members of the Managing Committee of Bhopal Branch of the respondent. It was claimed by the appellants that according to Articles of Association, Bhopal unit was an independent body and not totally governed by the respondent No. 1. The appellant No. 2 to 6 claimed that they were the members of the Managing Committee of Bhopal Branch of the respondent. It was claimed by the appellants that according to Articles of Association, Bhopal unit was an independent body and not totally governed by the respondent No. 1. The respondent No. 1 had recognized the Bhopal Branch as per its memorandum of Association, after the branch fulfilled the prescribed conditions. After recognition of the Bhopal branch, the respondent No. 1 permitted the appellant No. 1 to use its trade mark 'Lijjat Papad'. It was claimed that the Bhopal branch was conducted by one Smt. Saroj Kodape, who was the Director of that branch in accordance with its independent constitution. It was claimed that Smt. Saroj Kodape was mismanaging the Bhopal Branch. As a result thereof, the Bhopal Branch suffered misappropriation of huge funds and, therefore, a new managing committee was constituted with the appellants No. 2 to 6 as its members and the appellant No. 1 was made Director instead of Saroj Kodape. 8. It was claimed, in the plaint, by the appellant that the managing committee of the respondent No. 1 passed a resolution on 19.4.83 to close down the Bhopal Branch. The appellants were not noticed about this resolution. They came to know about this resolution when a letter dated 21.4.83 was conveyed to them through the President, respondent No. 2 by this letter, the respondent No. 1 directed the appellant No. 1 to hand over the charge of the Bhopal Branch to one Shri B. M. Dixit, who was an employee of the respondent No. 1. The appellants, therefore, filed a suit on 2.5.83 claiming that the respondent No. 1 had no business to interfere with the running of the Bhopal Branch. 9. The suit was resisted by the respondent, inter alia, on the ground that the appellants were not entitled to file the suit as members of the Bhopal Branch. It was stated in the written statement that they were not aware whether the appellant No. 1 was appointed as the Director of the Managing Committee of the Bhopal Branch or that the parties were the members of the Bhopal Branch. It was denied specifically that the Bhopal Branch had a legal right to manufacture and sell Papad under the trade mark named as 'Lajjat Papad' without let or hindrance. It was denied specifically that the Bhopal Branch had a legal right to manufacture and sell Papad under the trade mark named as 'Lajjat Papad' without let or hindrance. According to the respondent, the trade mark 'Lijjat Papad' is the trade mark of the respondent No. 1 and nobody could use the trade mark without the permission of respondent No. 1. The Managing Committee of the Bhopal Branch was permitted to use the trade mark so long as that branch abided with the standard set by the main branch at Bombay. The main branch at Bombay was entitled to see that whosoever used its trade mark of 'Lijjat Papad' should sell the goods of certain quality. It cannot allow a branch to sell substandard Papad under its name. It was found that during the management of Saroj Kodape, there was total mismanagement of Bhopal Branch. Therefore, permission to use the trade mark was withdrawn by the respondent No. 1. as per resolution dated 19.4.83. The respondent claimed specifically that permission to use the trade mark was in the nature of licence granted to Bhopal Branch and it could be withdrawn at any time when it was found that the Bhopal Branch did not conform to the aims and objects of the respondent No. 1. It was also stated that the respondent had entered into an agreement with Saroj Kodape that the Bhopal Branch shall use the material and polypropylene bags supplied by it for selling Lijjat Papad. The appellants had committed its breach in not adhering to the agreement and, therefore, they have withdrawn the permission of using the trade mark and closing the branch. Shri B. M. Dixit was authorized Attorney of the respondent No. 1 and, therefore, he was entitled to take stock of the goods of the respondent lying with the Bhopal Branch. 10. The trial Court after recording the evidence of appellant No. 1 Smt. Usha Sontake (PW -1) and that of Pratibha Sawant (PW -1) as witnesses for the respective parties, came to the conclusion that the respondent No. 1 did not authorise its Bhopal Branch to manufacture Lijjat Papad under its trade mark and it was not proved that the appellants were authorised to use the "Lijjat Papad" trade mark by way of licence. It was also held that the respondent No. 1 had full power to withdraw the permission granted to the Bhopal Branch, even if, it be held that such a licence for manufacturing and selling Papad under the trade mark of 'Lijjat Papad' was granted. It was also held that the appellants were not proved to be the members of respondent No. 1 Shri Mahila Griha Udyog Lijjat Papad, Bombay and, therefore, the appellants were not authorised to challenge the decision taken by the Managing Committee of the respondent. It was also held that the respondent No. 1 was legally authorised to close its Bhopal Branch and to stop it from using its trade mark. It was also held that the suit was not maintainable. It was further decided by the Court below that the Resolution dated 19.4.83 was not proved to be void and it was also not proved that the respondent No. 1 had directed appellant No. 1 to hand over the charge of Bhopal Branch of the respondent No. 1 to Shri B. M. Dixit. All these issues have been decided against the appellants. The suit was dismissed by the trial Court. 11. The first question that has to be decided in this appeal is whether the appellants had any right to file the civil suit against the respondent on the grounds already mentioned earlier. In order to do so, the appellants were obliged to plead and prove that they were members of the Bhopal Branch of the respondent and the appellant No. 1 was appointed the Director of the Managing Committee which was constituted after Saroj Kodape relinquished her office. The appellant No. 1 Smt. Usha Sontake claimed that she is the Director of the Managing Committee formed after Saroj Kodape was required to quit the office along with the Managing Committee presided over by her. It was claimed by the appellant that Smt. Usha Sontake was made the Director of the Managing Committee and appellants No. 2 to 6 were made its members. In this connection, we have only the evidence of Smt. Usha Sontake on record. She had not examined any other person during the trial for proving the aforesaid facts. It was claimed by the appellant that Smt. Usha Sontake was made the Director of the Managing Committee and appellants No. 2 to 6 were made its members. In this connection, we have only the evidence of Smt. Usha Sontake on record. She had not examined any other person during the trial for proving the aforesaid facts. She has also not filed any documentary evidence to show that she was elected as the Director of the Managing Committee and the appellants No. 2 to 6 were elected as the members of the Managing Committee. All that she said is that she was elected as Director on 15.9.82 along with appellants No. 2 to 6 as its members. She admitted in her cross-examination that she was having the entire record of the Bhopal Branch of the respondent No. 1 in her possession in the capacity of the Director of the Managing Committee. She also admitted that when she was elected as a Director, there was no notice issued to the members. She was not able to say who were the members who called the election meetings. She also admitted that she was in possession of the documentary evidence showing that she was elected as the Director of the Managing Committee. She did not produce any document to show that she was elected as a Director of the Managing Committee and also that appellants No. 2 to 6 were elected as members. The trial Court has disbelieved the evidence of the appellant No. 1 on this point. The counsel for the appellants was unable to satisfy this Court regarding the incorrectness of the finding of the trial Court on this point. It is true that the appellant No. 1 was in possession of the best evidence which was reduced into writing showing the procedure adopted during the election of the appellant No. 1 and that of appellants No. 2 to 6 by withholding that documentary evidence, the appellants deprived this Court from examining the legal position whether any meeting was held to elect the appellants No. 2 to 6 as the members of the Managing Committee and the appellant No. 1 as a Director. In the opinion of this Court, the trial Court rightly drew adverse inference against the appellants for not placing by best evidence that they were elected as members of the Managing Committee. In the opinion of this Court, the trial Court rightly drew adverse inference against the appellants for not placing by best evidence that they were elected as members of the Managing Committee. It is, therefore, held that it is not proved that the appellants could represent any Managing Committee of the Bhopal Branch of respondent No. 1. 12. The second question that arises for determination is whether the suit could be filed by the appellants not as members of the Managing Committee as claimed by them, but simply as members of the Bhopal Branch of the respondent No. 1. It has also to be seen further if the appellants have been able to establish that they were members of the Bhopal Branch. In case this Court comes to conclusion that the appellants were not members of the Bhopal Branch, then the appellants will have no right to file the suit and this appeal would liable to be dismissed as such. The question that has agitated the mind of the Court is whether it is compulsory for the appellants to plead and prove that they have complied with the condition 1A (d) of Article of Association (Ex. P-1). The appellants were required to give a prescribed pledge form on oath for admission for being a member of the respondent No. 1. It is to be seen if this condition is mandatory for to be placed being a member of the respondent No. 1 it is merely a directory. The conditions prescribed in 1 A of Article of Association are that as follows :- (i) Any woman who can render physical work in the industry recognized by the Khadi and Village Industries Commission, without distinction of caste, colour and creed, (ii) The woman whose age is not less than 15 years, (iii) who abides by the objects of the Mandal. (iv) Who has signed on oath the prescribed pledge form for admission will be entitled to be a member of any time during the year. However, it appears that there was further amendment in the Article of Association and Clause 1-B was added to it whereby the eligibility for membership was extended by saying that any woman who starts working in the Institution becomes its members from the date on which she starts working. However, it appears that there was further amendment in the Article of Association and Clause 1-B was added to it whereby the eligibility for membership was extended by saying that any woman who starts working in the Institution becomes its members from the date on which she starts working. It appears to the Court that in view of this amendment made by Article 1B subsequently, the condition of filing a pledge form remained no longer mandatory for the reason stated in Clause 1B of the Article of Association. Here it must be noticed that the respondent No. 1 liberalized the rigor of condition No. 1 by saying that a working woman shall have a right to be a member over and above the other conditions. In view of this matter, even if the appellants are able to prove that they were working in the Bhopal Branch of respondent No. 1, they shall be held to be its members of the respondent No. 1 without any proof of their having signed a pledge form as required by Article 1A (d). The evidence on record shows that Smt. Usha Sontake was unable to produce a copy of the pledge form in order to prove that the appellants were the members of the Bhopal Branch of the respondent No. 1 and they became the members of the respondent No. 1 by filling a pledge form. The respondents have also not produced any documentary evidence to show that appellants had not filled the pledge form. However, it is not necessary to go any further in this matter because the appellant No. 1 in Para -11 of her evidence has admitted that the appellants did not fill any form for being a member of Shri Mahila Griha Udyog Lijjat. Papad, Bombay. 13. Therefore, the undisputed fact is that none of the appellants had filled the pledge form. Nor there is any evidence on record that any of the appellants was working in the Bhoapl Branch. The entire evidence of Smt. Usha Sontake does not indicate anywhere that the appellants started working in the Bhopal Branch of the respondent No. 1 and thereby they became the members of respondent No. 1. The appellants should have led specific evidence on this point in order to claim the benefit of the amended article 1 B of the Article of Association. The appellants should have led specific evidence on this point in order to claim the benefit of the amended article 1 B of the Article of Association. In view of this fact, the trial Court appears to be right in holding that the appellants were unable to prove their locus standi to file the suit either as members of respondent No. 1 or otherwise as elected members of the Managing Committee of the Bhopal Branch of respondent No. 1. Thus the suit filed by the appellants is not maintainable in the eyes of law. 14. It is not necessary to go any further to decide the other points raised by the appellants in this case. However since the trial Court has given its finding regarding the other points, this Court records its finding on other points too. 15. it is not disputed that in the year 1977, the Bhopal Branch of the respondent No. 1 started. At that time, Saroj Kodape was the Director of the Managing Committee of the Bhoapl Branch. It is also not in dispute that she entered into an agreement on behalf of the Bhopal Branch of the respondent No. 1 with the President of the respondent No. 1. This agreement has already been proved by Pratibha Sawant (DW-1). In this agreement, there is a condition imposed by the respondent No. 1 that Bhopal Branch has maintained the quality of standard of Lijjat Papad uniform as is done in all the branches. The condition No. 7 of Ex D-1 shows that the raw materials including As afooesida (Hing), Salt etc. shall be supplied by the respondent No. 1 similarly, the container, i.e., Polypropylene bags shall also be supplied by the respondent No. 1. It was also agreed that Bhopal Branch shall not independently insert any advertisement of its own. The Clause No. 3 of this agreement shows that the respondent No. 1 had not only the right to administer its branch of even to close it on the happening of events mentioned in that Clause. It is therefore, contended by the respondent No. 1 that it had full right to rescind the licence granted by its in favour of the Bhopal Branch. It is therefore, contended by the respondent No. 1 that it had full right to rescind the licence granted by its in favour of the Bhopal Branch. It was also claimed that the appellants were not fulfilling the conditions agreed to by the former Director Smt. Saroj Kodape whereby as she has agreed to maintain the standard and qualify of Lijjat Papd desired by the main branch, respondent No. 1, by procuring the raw material from respondent No. 1 itself. On the other hand, counsel for the appellants has contended that there is no question of grant of licence to the Bhopal Branch. The Bhopal Branch, as per Articles of Association, was an independent Branch. It has its own finances which were to be maintained by the Bhopal Branch itself. The respondent No. 1 was not responsible for day to day administration of the Bhopal Branch. The Managing Committee of the Bhopal Branch was responsible for the management of the Branch and the respondent No. 1 would not be responsible for sale, purchase and marketing of assets of the Bhopal Branch. It was also provided in the Articles of Association that there would be not debt or liabilities on account of a branch on the main branch or the Head Office. Even the profits were to be maintained by the branch itself and not by the Main Branch. The only control the respondent No. 1 claimed to exercise was regarding the quality of products and it was specifically laid down in condition (e) of Article of Association that the Managing Committee or the Head Office will have power to take upon the administration of a Branch the quality of a product was sub-standard. There was no power to close the branch. 16. The learned counsel for the appellants had referred to a decision of this Court rendered on 18.4.79 in C. R. No. 408/79 (Shri Mahila Griha Udyog Lijjat Papad, Bombay and another Vs. Smt. Pushpa Berry and others). It is true that in this case in para -10 it was held after considering the Articles of Association in details that prima facie the Jabalpur Branch of the respondent No. 1 was not a licensee, but a co-proprietor along with the respondent No. 1. Smt. Pushpa Berry and others). It is true that in this case in para -10 it was held after considering the Articles of Association in details that prima facie the Jabalpur Branch of the respondent No. 1 was not a licensee, but a co-proprietor along with the respondent No. 1. The respondent No. 1 had only the power of superintendence, but this power or authority did not entitle to interfere with the affairs of a Branch except in a case of not maintaining the quality of the product. According to this court, in that case for the purpose of temporary injunction matter, it was prima facie proved that the Branch was an autonomous body and it had the status of a co-proprietor rather than that of a licensee. However, this authority is not applicable to the facts of the case at present for the reason that parties have now gone to trial in this case and the evidence had been led. Apart from the Articles of Association, the Bhopal Branch through its the then Director Saroj Kodape, entered into an agreement Ex. D-1 and, therefore, besides the Articles of Association (Ex. P-1), Ex. D-1 has also to be considered. It appears from the agreement that the then Director on behalf of the Bhopal Branch agreed to abide by the condition. The conditions No. 2 and 3 of the agreement show that the respondent No. 1 had allowed the Bhopal Branch to use its trade mark on certain conditions. The first condition was that the Bhopal Branch shall maintain the standard of quality of the product uniformly as available in all the branches. Secondly the Branch shall not be malad ministered and in case if there was any breach of terms of clause- 3 in the matters of administration of the Branch, the respondent No. 1 had right to take over the management or even to close it down as the case may be. The third important condition related to the maintenance of the quality was that the respondent No. 1 shall supply the raw material to the Bhopal Branch. Thus in the light of this agreement, it cannot be said that the Bhopal Branch was totally autonomous as appeared from the Memorandum and articles of Association. 17. The third important condition related to the maintenance of the quality was that the respondent No. 1 shall supply the raw material to the Bhopal Branch. Thus in the light of this agreement, it cannot be said that the Bhopal Branch was totally autonomous as appeared from the Memorandum and articles of Association. 17. The very fact that this agreement had to be entered into for permitting the Bhopal Branch to continue its activity of manufacturing papad under the trade mark of Lijjat Papad shows that without this agreement, the respondent No. 1 could not have allowed the Bhopal Branch to use the trade mark of Lijjat Papad. In that sense, this permission could be nothing, but a license to use the trade mark. Therefore, this court comes to conclusion that the Bhopal Branch was a licensee of the respondent No. 1 and the licensor had reserved its right to cancel the licence or to fake over the management, if necessary, in the interest of the body granting the licence. The authority, relied upon by the appellants, is not applicable to the facts of this case. 18. In view of the aforesaid facts, even if it be held that the appellants were entitled to bring suit, they have no case on merits because, as per agreement, the respondent No. 1 was entitled to close the Branch on the ground that the Bhopal Branch was not managing its affair properly and causing a damage to the trade mark of Lijjat Papad by not subscribing to the agreement to the effect that it will procure of its raw material and the container from respondent No. 1. 19. The counsel for the appellant tried to argue that the appellants were not heard when the Resolution dated 19.4.83 was passed to close down the Bhopal Branch. According to the counsel for the appellants the respondent No. 1 had violated the principles of natural justice because it had not given to Bhopal Branch an opportunity of hearing. There is not question of application of principles of natural justice to the case covered by an agreement like Ex. D-1. Both the parties had agreed to a particular course of action and the appellants had given the right to the respondent No. 1 to act in a particular manner in case the conditions were breached. There is not question of application of principles of natural justice to the case covered by an agreement like Ex. D-1. Both the parties had agreed to a particular course of action and the appellants had given the right to the respondent No. 1 to act in a particular manner in case the conditions were breached. The respondent No. 1 exercised its right of closing its Bhopal Branch in accordance with the agreement. The only remedy the Bhopal Branch had in case the respondent No. 1 committed a breach of contract Of closing down the Bhopal Branch otherwise than as per terms of Ex. D-1, the Bhopal Branch had a remedy to sue for breach of contract or to file a suit for mandatory injunction. The question of principles of natural justice would not be involved in such a case. 20. The counsel for the respondents has cited certain decisions reported in Mahabir Prasad Nawandia Vs. Satyanarain Kotriwala (1), The G.I.P. Railway Senior Institute, Ajni and another Vs. Mohit Kumar Barot (2), Gopal Krishnaji Ketkar Vs. Mohammad Haji Latif and others (3) and Parmanand Jain Vs. Babuial Brijendra Kumar (Firm) and another (4), but it is not necessary to refer to them in this case for the reason already stated. 21. The result is that this appeal fails and is dismissed with costs. Counsel's fee Rs. 350/-, if certified. Appeal dismissed