Avriva Solutions v. Avriva Skintech Private Limited
2025-07-03
D.N.RAY, SUNITA AGARWAL
body2025
DigiLaw.ai
JUDGMENT : SUNITA AGARWAL, CJ. 1. The above noted petition and connected Appeal from Order have been filed by the defendants against the orders passed by the trial court in rejecting the application under Order VII Rule 11 CPC and granting injunction under Order XXXIX Rule 1 CPC; respectively. They have been heard together and are being decided by this common order with the consent of the learned counsels for the parties. 2. By the order dated 19.04.2025, the Trial Court has rejected the application seeking rejection of plaint under Order VII Rule 11 in Commercial Trademark Civil Suit No.03 of 2025. The order dated 31.05.2025 is for grant of injunction against the defendants / petitioners herein allowing the application Exhibits ‘8’ and ‘9’. In trademark suit where infringement and passing off has been pleaded. 3. As per the plaint averments, the defendant No.1 is a partnership firm comprising of two partners namely the defendant Nos. 2 and 3. Defendant No.3 was an ex-employee of the plaintiff company namely AVRIVA SkinTech Pvt. Ltd. Defendant No.4 is the Director of the plaintiff company namely Avriva SkinTech. Defendant No.2, one of the partners of the defendant No.1 partnership firm, is husband of the defendant No.4, the Director of plaintiff company. 4. The allegations against the defendants are that defendant No.1 is infringing the registered trademark “AVRIVA” of the plaintiff company and is passing off its illegal and counterfeit goods in the market as that of the plaintiff by using the trademark “AVRIVA” and other trademarks, which is an infringement and violation of the commercial rights of the plaintiff company. The allegations against the defendant No.4, a Director of the plaintiff company, is that being Director of the plaintiff company, she has facilitated the defendant No.1 company and has been an accomplice in the illegal activities of the defendants and in connivance with other defendants has been an integral part in utilizing plaintiff Company’s funds in creating defendant No.1 firm and has equally liable for committing infringement of the trademark of the plaintiff company with the aid of defendant Nos.2 and 3.
Defendant No.1 having misused her position as a Director of the plaintiff company committed fraud with the plaintiff company and through her spouse namely defendant No.2, created defendant No.1 firm and is dumped goods with identical trademarks / trade name “AVRIVA” in the market and hence, is a necessary party in the suit. 5. The defendant No.5 is a manufacturing company through whom, the plaintiff was getting the products manufactured under its trade name and trademark “AVRIVA”. It is stated in the plaint that it has came to the knowledge of the plaintiff that the defendant No.5 is also manufacturing duplicate goods / products for the defendant No.1 with identical trademark and infringing trademark “AVRIVA” and, thus, defendant No.5 has been impleaded as necessary party in the suit being part of the chain of infringement and passing off committed by the other defendants. 6. Taking note of the allegations made against the defendants and the description of the array of parties in the plaint, it may be noted that all the defendants have been impleaded in the suit for permanent injunction restraining them from using the trademark “AVRIVA” and other registered trademarks of the plaintiff company under the Trademarks Act, with the categorical statement that there has been an active participation of defendant No.4, a Director of the plaintiff company in the act of infringement and passing off by the other defendants by creating a partnership firm as defendant No.1. 7. We may note that the application under Order VII Rule 11 CPC has been filed only by the defendant No.4, seeking for rejection of the plaint on the plea that the suit filed by the plaintiff company through one of the directors is incompetent. The plaint was sought to be rejected on the plea of No-locus of the plaintiff company to file the suit. The only ground pressed to substantiate the said relief is that defendant No.4 is 50% shareholder of the plaintiff company and, thus, has equal rights in the plaintiff company even in the decision of the company to sue others. 8.
The plaint was sought to be rejected on the plea of No-locus of the plaintiff company to file the suit. The only ground pressed to substantiate the said relief is that defendant No.4 is 50% shareholder of the plaintiff company and, thus, has equal rights in the plaintiff company even in the decision of the company to sue others. 8. As per Section 291 of the COMPANIES ACT , 1956,except in a case where there is an express provision under the Memorandum of Association vesting power in one of the directors to file a suit on behalf of the company, the individual director without there being a resolution of the Board of Directors of the company cannot institute the suit on behalf of the company. The case of the defendant No.4 seeking for rejection of the suit as a whole, is that the present suit has been filed by one of the directors Mrs.Khyatiben Ronakbhai Shah in the name of the company on a unilateral permission given to herself on her own as a director and there has been no resolution of the Board of Directors. Unilateral filing of the suit by one of the directors in the name of the company is ex facie barred. The suit is, thus, liable to be rejected having been filed by a person, who is not authorized to institute the suit on behalf of the company. 9. Mr.S. P. Majmudar, the learned advocate appearing for the petitioners inviting attention of the Court to the order passed by the Trial Court has submitted that the trial court has erred in relying upon the provisions of Order XXIX Rule 1 CPC, while holding that the person authorized by Company can file the suit and since the plaint has been signed by the director of the company, the plaint cannot be rejected. 10.
10. Referring to the decisions of the Apex Court in the case of State Bank of Travancore v. Kingston Computers (I) (P) Ltd., [ (2011) 11 SCC 524 ]; the judgment of the High Court of Bombay in Civil Revision Application No.62 of 2017 decided on 22.11.2011, the High Court of Bengaluru in Commercial Appeal No.61 of 2021 decided on 27.05.2021 and the judgment of the High Court of Himachal Pradesh in Civil Writ Petition No.816 of 1996 decided on 04.09.2003, it was argued that in absence of a specific authorization in a proper manner, i.e. in absence of a Board Resolution, the petitioner company through one person claiming to be its director cannot be permitted to sue. It was vehemently argued that when the suit itself is not properly instituted, there cannot be any question of grant of injunction in such a suit. It was further argued that Order XXIX Rule 1 CPC has a limited application, inasmuch as, it only defines the person who is authorized to sign or verify the pleadings on behalf of the company. However, it does not authorize any person mentioned in the plaint to institute the suit on behalf of the company. 11. The submission is that the application of Order XXXI Rule 1 would come into operation only after the suit has been validly instituted and the provision by itself cannot be invoked to say that one of the directors is authorized to institute the suit inspite there being no proper authorization by the Board resolution. 12. The contention is that unless the power to institute the suit is specifically conferred on a Board Director, he has no authority to institute the suit on behalf of the company. Such a power can be conferred by the Board of Directors only by passing a resolution in that regard. 13. Mr.Harshit Tolia, the learned Senior Advocate appearing for the respondent / plaintiff has relied upon the decision of the Bombay High Court in the case of Blue Cross Laboratories Ltd. v. RB Remedies (P) Ltd., [2015 SCC OnLine Bom 2821] to submit that it is not the case of the defendant herein that the person through whom the suit has been instituted by the plaintiff company is not a director of the company.
Under Order XXIX Rule 1 CPC, in a suit by or against the company, any pleading may be signed and verified on behalf of the company by its secretary or any director, who is able to depose to the facts of the case. The plaint has, thus, been affirmed properly and the question whether or not the signatory of the plaint is authorized to affirm a pleading or institute the suit or proceedings, is a question which arises during the course of trial. The suit cannot be said to be barred by law within the meaning of Order VII Rule 11 (d), if the authority of the signatory has not been produced with the plaint or shown to exist at the time of filing of the suit. 14. It was argued that the inquiry as to whether the person verifying the pleadings, or presenting the plaint, has been authorized on behalf of the company to sue with reference of Section 291 of the COMPANIES ACT or Order XXIX Rule 1 CPC, is a question which can be gone into after the evidence are led by the parties during the course of trial and final decision can be rendered only thereafter. 15. Having noted the above, suffice it to say that the plaintiff is a company duly incorporated and registered as a distinct and independent legal person, which can sue and be sued in its own name. The company being a juristic person, needs someone to act on its behalf and manage the affairs of the company. A reading of Section 291 of the COMPANIES ACT makes it clear that the Board of Directors have been given all the powers of the company except those, which are required to be exercised in the General Meeting of the company. The question of authority to institute the suit on behalf of the company is a question, which goes to the root of the matter, inasmuch as, it has a bearing on the suit being competent or not. However, such a question cannot be examined by reading of the plaint itself by invoking Order VII Rule 11 CPC, and such a question is to be framed as one of the issues (about the competence of the suit) and has to be decided during the course of trial. 16.
However, such a question cannot be examined by reading of the plaint itself by invoking Order VII Rule 11 CPC, and such a question is to be framed as one of the issues (about the competence of the suit) and has to be decided during the course of trial. 16. At the stage of Order VII Rule 11, it is sufficient that the plaint is presented by the person with his signatures who is competent to sign the plaint as per the procedure prescribed in Order XXIX Rule 1 of the Code of Civil Procedure. There being no defect in the presentation of the plaint, inasmuch as the person who has signed the plaint and made depositions is a director of the company, who is defined as a person having authority to sign or verify the pleadings on behalf of the company under Order XXIX Rule 1 CPC, the plaint cannot be rejected. There is no provision of law, which bars the presentation of the suit by one of the directors of the company, which being a juristic person has a right to sue in its own name. The provisions of Order VII Rule 11 (d) are not attracted in this case. There is no error in the order of the Trial Court in holding that the question as to the authority of one of the directors of the company to institute the suit, in light of Section 291 of the COMPANIES ACT , is a question to be decided during the course of the trial. 17. Moreover, pertinent is to note that the application seeking rejection of the plaint is filed by one of the defendants only, (defendant No.4) who herself is a director of the plaintiff company and against whom allegations are of misusing her positions in the capacity of the director of the company and acting against the interest of the company, in connivance with other defendants. There are only two directors of the plaintiff company namely the one through whom suit has been instituted by the company and the other who is impleaded as defendant No.4. In a suit for infringement of copyright and passing off filed by the company, the allegations are against other defendants for the act of passing off in connivance with the defendant No.4.
In a suit for infringement of copyright and passing off filed by the company, the allegations are against other defendants for the act of passing off in connivance with the defendant No.4. The partial rejection of the suit against one of the defendants (defendant No.4) when others have not joined her in filing the application under Order VII Rule 11 CPC, is impermissible. 18. The question as to whether in a case where one of the two directors has acted against the interest of the company and whether the company being a juristic person can institute suit through the other director, would be the relevant question to be decided in the trial. In case, the arguments of the learned counsel for the petitioner are accepted, the plaintiff company would stand non-suited though the allegations are against the one director (out of two), of acting against the interest of the company. 19. For the aforesaid, we do not find any reason to interfere in the order passed by the Trial Court for rejection of the application under Order VII Rule 11 CPC. 20. As regards the order of interim injunction, pertinent is to note that the Trial Court has returned a categorical finding of prima facie case, balance of convenience and irreparable loss in favour of the plaintiff. It is noted by the Trial Court that indisputably, the plaintiff and defendant No.4 are only the directors of the plaintiff company i.e. AVRIVA SkinTech Pvt. Ltd. Whereas, the defendant No.2 is the husband of defendant No.4, the other director of the company and defendant No.3 was an ex-employee of the plaintiff company. The plaintiff is a registered owner of the trademark “AVRIVA” and other related trademarks. The defendants have started manufacturing the products in the name of “AVRIVA” and other related trademarks, which are similar and ditto. The defence put up by the defendants for using the same trademark is that being 50% shareholder and director of the plaintiff company, defendant No.4 had given authority to manufacture these products to the defendant No.1 (partnership firm). The case of the defendant No.1, thus, is being of a permissive user under Section 2(r)(ii)(c) of the TRADE MARKS ACT , 1999. It is noted by the Trial Court that for applicability of the said provision, a written agreement is compulsory and without compliance of such mandatory requirement, no stand of permissive use can be sustainable.
The case of the defendant No.1, thus, is being of a permissive user under Section 2(r)(ii)(c) of the TRADE MARKS ACT , 1999. It is noted by the Trial Court that for applicability of the said provision, a written agreement is compulsory and without compliance of such mandatory requirement, no stand of permissive use can be sustainable. Admittedly, there is no consent of the plaintiff company or the other director of the company through whom the suit has been instituted. The reliance placed by the defendants in their defence of permissive use is on an authority letter given by the defendant No.4 at Exhibit ‘49 A’ produced by the defendant No.2 her husband, which is dated 01.09.2024. 21. It was noted by the trial court that the defendant No.1 firm itself was incorporated on 27.09.2024 and GST number was obtained from the concerned authority on 29.11.2024. When the defendant No.1 company was not in existence on the date when the authority letter was alleged issued by defendant No.4 to the defendant No.1, there was no question of grant of permission to use the similar trademark. The findings by the Trial Court that the defendants have used their trademark in deceptive manner which is identical and similar and it would create confusion amongst its users and hence, the defendants have committed infringement of the registered trademark of the plaintiff, could not be assailed before us on any plausible grounds other than the plea of being a permissive user, which has rightly been rejected by the Trial Court. 22. For the aforesaid, we do not find any error in the decision of the Trial Court to grant interim injunction while allowing the application at Exhibits ‘8’ and ‘9’ filed by the plaintiff. 23. With the above, both the petition invoking extraordinary supervisory jurisdiction of the High Court under Article 227 of the Constitution of India challenging the order dated 19.04.2025 of rejection of application under Order VII Rule 11 CPC and the connected Appeal from order against the interim injunction order dated 31.05.2025 under Order XXXIX Rule 1 CPC are liable to be dismissed. Dismissed as such. No order as to costs. 24. Pending civil applications, if any, stand disposed of.