Trademark – “Being "inspired" per se does not amount to copying. Being "inspired" is simply the starting point.”

Recently, the Intellectual Property Office of Singapore in Kimanis Food Industries Sdn Bhd v Rovio Entertainment Ltd rejected the opposition petition filed by ROVIO ENTERTAINMENT LTD, opposing the registration mark of KIMANIS FOOD INDUSTRIES SDN BHD.  One of the issue which the Intellectual Property Office had to consider was whether ‘being inspired’ amounts to copying. Answering in negative, the Intellectual Property Office held as follows;

“Preliminary Comment

12 At the outset, it is noted that the Applicants have provided in their evidence that they were inspired by the Angry Birds Game (more details of this below). My view is that there is nothing objectionable in being "inspired" per se in that, not everything "inspired" by an existing work is necessarily objectionable. To decide otherwise would confer excessive protection on owners of registered trade marks, and would set too high a threshold for potential new market entrants to enter the market. In practice, it is common to have "look alikes" in the market place. Whether or not a mark "inspired" by an existing work or whether such "look alikes" can ultimately be regarded as objectionable will depend on whether an opponent can establish one of the grounds of opposition in the Act, which in turn is very much dependent on the particular facts of each case.”       

Arbitration - Arbitration and Conciliation Act, 1996 - Prospective or Retrospective ?

Recently, the Hon'ble Uttarakhand High Court in Indian Oil Corporation Ltd. and others Vs M/s Manohar Singh & sons. and others had to deal with an interesting issue as to whether the Arbitration and Conciliation Act, 1996 is retrospective or prospective in application. In the instant case, the agreement was entered into between parties in the year 1994, but the Act came into effect in the year 1996. The Hon'ble High Court observed that the 1996 Act is applicable in the instant case and held as under;

" Having read Section 8 of the Act, I have no hesitation to hold that if matter is brought before any judicial authority, which is the subject of an arbitration agreement, on  the application of one of the parties of such agreement, judicial authority may refer the parties for arbitration, however, as per Section 8, party seeking reference for arbitration is required to produce on record original arbitration agreement. Section 8 of the Act does not contemplate that arbitration agreement must have been entered into only after enactment of the Act. The only requirement to invoke Section 8 is that there should be arbitration agreement between the parties pertaining to the question involved before the judicial authority. 

 Undisputedly, application was moved by the defendant before trial court at the earliest along with agreement entered into between the parties. Execution and existence of agreement is not in dispute. In my considered opinion observation of both the courts below that since arbitration agreement was entered into prior to enactment 1996 Act, therefore, no reference under Section 8 of the Act could be made is not correct view and thus, does not stand in the eyes of law. In net result, petition is allowed. Both the impugned orders are hereby quashed. Matter stands referred for arbitration, as per Section 8 of the Act and in accordance with clause 69 of the agreement. No order as to costs.”

Arbitration - Courts, cannot grant interim protection under Section 9, wherein, instruments containing arbitration clause are insufficiently stamped

Sometimes, instruments which are required to be stamped compulsory are not stamped, however, there will be an arbitration clause contained in those instruments. For instance Lease Deeds. In such a situation, the moot question is whether party to such instruments can invoke Section 9 to seek interim protection on the strength of these unstamped instruments? 

Arbitration clause is independent of  the main agreement, therefore, can be separated from the principal agreement. However, it is also a settled legal position that Courts cannot look into instruments which are insufficiency stamped. Recently, the Bombay High Court in Shri Jayraj Devidas & Ors Vs Shri Nilesh Shantilal Tank & another answered the question stated supra in negative and held as under;

         

 “18. Be that as it may, the Supreme Court in case of SMS Tea Estates Private Limited (supra) which judgment is delivered at subsequent point of time has interpreted the provisions of Stamp Act which are in parimateria with sections 33 and 34 of the Bombay Stamp Act and has held that insufficiently paid instrument cannot be acted upon by the court including the arbitration agreement. Division Bench of this court has specifically held that single judge while hearing application under section 9 of the Arbitration and Conciliation Act has to consider whether such an instrument containing arbitration agreement attracts payment of stamp duty and if so whether it is sufficiently paid and if not paid shall impound such  Court document. I am respectfully bound by the judgment of the Supreme Court in case of SMS Tea Estates Private Limited (supra) and order and judgment of Division Bench of this court which is taken after adverting to the judgment of Supreme Court in case of SMS Tea Estates Private Limited (supra) and dealing with sections 33 and 34 of the Bombay Stamps Act while dealing with an application under section 9 of the Arbitration and Conciliation Act, 1996. In my view the judgment of Supreme Court in case of Firm Ashok Traders (supra) is clearly distinguishable and is of no assistance to the respondents.

19. In my view the memorandum of understanding attracted payment of stamp duty under Article 5(g-a) of Schedule I of Bombay Stamp Act and thus the learned Principal District Judge ought to have considered this issue and ought to have impounded the instrument and should have issued directions for adjudication of the instrument for the purpose of payment of stamp duty and penalty. Till such process was over, the learned Principal District Judge could not have acted upon such instrument including the arbitration agreement. Though this issue was raised specifically by the appellants in the affidavit in reply, the same has not been considered by the learned Principal District Judge.

20. Since I am inclined to allow this appeal on the ground that the instrument containing arbitration agreement is insufficiently stamped and thus the learned Principal District Judge could not have acted upon such instrument and could not have granted interim measures under section 9 of the Arbitration and Conciliation Act, 1996, I need not deal with the other issues raised in the memorandum of appeal...” 

Arbitration - Disputes brought before the Company Law Board invoking Sections 397, 398 & 402 of the Companies Act, 1956 cannot be referred to Arbitration

Recently, the Hon'ble Bombay High Court in its detailed judgement in Rakesh Malhotra Vs Rajinder Kumar Malhotra & Others made it crystal clear that the disputes before the Company Law Board invoking provisions of Sections 397, 398 & 402 of the Companies Act, 1956 cannot be referred to private tribunal viz., arbitral panel for resolution. Disputes may be referred when such Petitions are filed with mala fide intent to avoid arbitration. The operative portion of the judgment is extracted herein under;

" 124

(a) As to whether the disputes in a petition properly brought under Sections 397 and 398 read with Section 402 of the Companies Act, 1956 can be referred to arbitration, the answer is no, subject to the caveat that I have noted regarding a mala fide, vexatious or oppressive petition and one that is merely ‘dressing up’ to avoid an arbitration clause.” 

   

Usufructuary Mortgage - Limitation - Right to recover possession continues 1) till the money is paid out of rents & profits, or 2) where it is partly paid out of rents and profits, subsequently, when the balance is paid by mortgagor or deposited in Court pursuant to Section 62 of Transfer of Property Act.

Very recently, the Hon'ble Supreme Court in Singh Ram (D) Thr. L.Rs Vs Sheo Ram & Ors made it crystal clear that limitation to recover possession in usufructuary mortgage will not commence from the date of mortgage but when the money is paid out of rents & profits or where the partly amount is paid out of rents & profits, and balance is paid by the mortgagor or deposited in the Court as provided under Section 62 of the Transfer of Property Act. In the subject case, the Plaintiff (mortgagee) filed a suit for declaration of title over the mortgaged property on the ground that the Defendant has not redeemed the property for 30 years since the date of mortgage and the same was negated by the Hon'ble Supreme Court.  The relevant portion is extracted herein under;

"15. We, thus, hold that special right of usufructuary mortgagor under Section 62 of the T.P. Act to recover possession commences in the manner specified therein, i.e., when mortgage money is paid out of rents and profits or partly out of rents and profits and partly by payment or deposit by mortgagor. Until then, limitation does not start for purposes of Article 61 of the Schedule to the Limitation Act. A usufructuary mortgagee is not entitled to file a suit for declaration that he had become an owner merely on the expiry of 30 years from the date of the mortgage. We answer the question accordingly."      

Banking / Public Auction - Any irregularity in sale will set aside the sale irrespective of whether possession is given to Auction Purchaser

The Hon'ble Supreme Court in Sadashiv Prasad Singh Vs Harendar Singh & Ors has observed that the rights of an auction-purchaser in the property purchased by him cannot be extinguished except in cases where the said purchase can be assailed on grounds of fraud or collusion.

Recently, the Hon'ble Supreme Court in Subhransu Sekhar Padhi Vs Gunamani Swain & Others has observed that sale of property to an Auction Purchaser is to be set aside when property is sold / auctioned in flagrant violation of rules prescribed, however, Auction Purchaser is a victim of an illegal procedure, therefore, he is entitled to to refund of amount together with 12% interest.

Employment - Non-Complete & Non-Solicitation Clauses - Validity

Time and again, several courts in India, by taking aid of Section 27 of the Contract Act have held in favour of the the Employees. However, there was few rare Indian and Foreign which have rendered judgement in favour of the Employer. They are as follows;

1. ELSEVIER LIMITED Vs ROBERT MUNRO

2. Homang India Private Limited Vs Ulfath Ali Khan

3. M/S VOGUESERV INTERNATIONAL PVT LTD Vs RAJESH GOSAIN & ORS

4. DESICCANT ROTORS INTERNATIONAL PVT LTD Vs BAPPADITYA SARKAR & ANR

5. GILFORD MOTOR COMPANY, LIMITED v. HORNE

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Banking – SARFAESI Act, 2002 – Retrospective – Applicable to loans sanctioned prior to enactment of the Act

The Orissa High Court in Sarthak Builders Pvt. Ltd., Vs Orissa Rural Development Corporation Limited had to decide as to whether provisions of Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 can be invoked with reference to the loan transaction entered into prior to coming into force of the said Act? The Hon’ble High Court observed the Act has retrospective effect after reading out the object of the Act.  

Banking - Creditor–Debtor - Acknowledgement & Promise to pay time barred debt is good consideration, therefore, enforceable

Limitation to file a suit for recovery against the debtor runs for 3 years from the 1) date on which loan was availed, 2) date on which Debt is acknowledged by debtor, 3) date on which last was payment made by debtor 4) Balance Confirmation Statement (in case of company). But the debt shall be acknowledged by the Debtor within the period of Limitation i.e., 3 years.  

In Bhartiya State Bank Vs Bhanjan Singh & Another, the Hon’ble Chhattisgarh High Court had to decide the consequence of ‘acknowledgement & promise to pay the debt’ by the debtor 'beyond the period of limitation'. The Hon’ble High Court taking aid of Section 25(3) of the Indian Contract Act observed as under;

“The interpretation of Section 25(3) provides that a debtor can enter into an agreement in writing to pay the whole or part of a debt, which the creditor might have enforced but for the law of limitation, and a suit can lie on a written promise to pay the barred debt as it is a valid contract; such a promise constitutes novation, and hence, can form a basis of a suit independently of the original debt. The reason for this provision is that the debt is not extinguished; only the remedy gets barred by passage of time, and this provision does not revive a dead right but merely resuscitates the remedy to enforce the right, which already exists.”     

Norwich Pharmacal Orders - An order compelling a person caught up in the wrongdoing of another, even innocently, to identify the wrongdoer.

The House of Lords in NORWICH PHARMACAL COMPANY AND OTHERS Vs COMMISSIONERS OF CUSTOMS AND EXCISE [1974] AC 133 held that a claimant, who cannot find out the identity of the wrongdoer but can identify a person caught in the wrongdoing, can sue such person to find out the wrongdoer.

Recently, the High Court of Justice, Chancery Division in Santander UK Plc Vs National Westminster Bank Plc & Others applied the Norwich Pharmacal order to find out the beneficiaries, wherein under, Santander wrongly made payment electronically to the bank accounts of not the intended beneficiaries. After refunding the amount to the intended beneficiaries, Santander requested the banks, who are maintaining the accounts of persons wrongly credited to obtain their authority for the amount to be refunded. In shorts, Santander seeks to recover the monies sent by mistake to unintended beneficiaries. 

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Law of Contracts – The Defence of Illegality

The Hon’ble Supreme Court of United Kingdom in Hounga Vs Allen and another had to decide as to whether the defence of illegality could defeat the claim the complaint preferred by the Complainant. In the case on hand, one ‘X’, a Nigerian national was brought in to United Kingdom by ‘Y’ on the pretext that she would sent to school, however, she was made to do household work, discriminated and sent out of the house by ‘Y’. ‘X’ filed complainant against ‘Y’ seeking damages for racial discrimination. ‘Y’ contented the contract between ‘X’ and ‘Y’ is an illegal contract, therefore, the complaint is bad per se. The Hon’ble Supreme Court held in favour of ‘X’ rejecting the contention of ‘Y’. 

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Principal & Agent - A bribe or Secret Commission accepted by an Agent is held on trust for his Principal

The Supreme Court of United Kingdom in FHR European Ventures LLP and others Vs Cedar Capital Partners LLC had to decide as to 'whether a bribe or secret commission received by an agent is held by the agent on trust for his principal, or whether the principal merely has a claim for equitable compensation in a sum equal to the value of the bribe or commission.' The Supreme Court also discussed fiduciary capacity of an Agent towards his Principal. In the present case, ‘A’ acted as an agent for ‘B’ to fix deal with ‘C’. The Agency Agreement contained conflict of interest clause. ‘C’ gave secret commission to ‘A’. Subsequently, when ‘B’ came to know about the secret commission, he instituted the suit for recovery of that secret commission. The Hon’ble Court held “a bribe or secret commission accepted by an agent is held on trust for his principal.”

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Banking – Derivatives (ISDA Agreement) – Debt Recovery Tribunal competent to deal with fraud and misrepresentation, therefore, suit seeking declaration of ISDA Agreement null and void not maintainable

The Hon’ble Delhi High Court, in its recent judgment in RADNIK EXPORTS Vs STANDARD CHARTERED BANK has held that the Debt Recovery Tribunal has the jurisdiction, power and authority to decide on the defence to an application for recovery of debt filed before it. Such defence may also be in the nature of declarations and injunctions.

The Relevant portion of the judgment is extracted herein under;

“27. Section 34 of the Specific Relief Act, 1963 enables any person entitled to any legal character or to any right as to any property to institute a suit, against a person denying or interested to deny his title to such character or right, for a declaration that he is so entitled. It has been held in Lachhman Das Vs. Arjan Singh MANU/PH/0477/1962 and Narhar Raj Vs. Tirupathybibi MANU/AP/1380/2002 that under the said provision negative declaration can also be claimed. It is thus possible, under the said Section 34 to sue for a declaration that the plaintiff is free of debt. Moreover it has been held in V. Ramaraghava Reddy Vs. K. Seshu Reddy AIR 196 7 SC 436, Supreme General Films Exchange Ltd. Vs. His Highness Maharaja Sir Brijnath Singhji Deo of Maihar (1975) 2 SCC 530 that Section 34 is not the sole repository for the relief of declaration. That being the legal position, it would be open to every person against whom a bank or financial institution may have a claim for recovery of a debt, to sue in a Civil Court on the same grounds on which he may have a defence before the DRT to such claim of a bank / financial institution, for declaration that he is not a debtor of the bank / financial institution and is not liable to pay any amount to the bank / financial institution. If it were to be thus held that both, the Civil Court as well as the DRT would have jurisdiction to decide whether a person against whom a bank / financial institution has a claim as a debtor, is in fact a debtor or not and / or is liable to pay the amount claimed by the bank or not, the possibility of a conflicting finding being rendered by the Civil Court and the DRT cannot be ruled out and in which case the finding of the Civil Court will prevail over the finding of the DRT as has been held at least by this Court in Cofex Exports Ltd. vs Canara Bank AIR 1997 Delhi 355. I have also held so in Sunayana Malhotra Vs. ICICI Bank 163 (2009) DLT 602 though in the context of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).   

28. I have wondered whether such an interpretation would not set at naught the very reason for the enactment of the DRT Act and establishment of the tribunal and whether not the same would lead to a waste of effort on the part of DRT in adjudication, if the same were not binding. The hard realities of life cannot be overlooked/ignored, where every person against whom the bank or financial institution would have a claim before the DRT would be interested in stalling the same and with the said intent approach the Civil Court for declaration aforesaid, as the decision before the Civil Court takes time as has already been noticed by the Supreme Court in Nahar.

29. I find the same to be not permissible.

30. The Supreme Court recently in Standard Chartered Bank Vs. Dharminder Bhohi MANU/SC/1004/2013 has reiterated that the intendment of the DRT Act is speedy recovery of dues to the bank and the DRTs and DRATs are expected to see to it that an ingenious litigant does not take recourse to dilatory tactics. It was further held that any delay would fundamentally frustrate the purpose of the legislation. The Supreme Court with the said observations set aside the part of the order of the DRAT giving liberty to the auction purchaser of a property to file a civil suit.  

31. Notice may also be taken of another recent judgment of the Supreme Court in Jagdish Singh v. Heeralal (2014) 1 SCC 479 which was concerned with the maintainability of a civil suit for declaration of title, partition and permanent injunction with respect to a property auctioned under the provisions of the SARFAESI Act vis-à-vis the provision of an appeal under Section 34 thereof. The Supreme Court, after examining the judgments inter alia in Nahar and Indian Bank held that irrespective of the question whether the civil suit is maintainable or not, once a remedy has been provided under the SARFAESI Act, the jurisdiction of the Civil Court would be barred. Reliance was placed on the judgment of the Constitution Bench in Mardia Chemicals Ltd. Vs. Union Of India (2004) 4 SCC 311 laying down, in the context of the SARFAESI Act that the prohibition to the jurisdiction of the Civil Court covers matters which can be taken cognizance of by the DRT and that the bar of jurisdiction is in respect of a proceeding which may be taken to the tribunal and that a matter, in respect of which an action may be taken even later on, the Civil Court shall have no jurisdiction to entertain any proceeding thereof. The Supreme Court held that the Civil Court in such circumstances has no jurisdiction to entertain any suit or proceeding in respect of those matters which fall within the jurisdiction of the DRT and held the jurisdiction of the Civil Court to be barred.

32. Applying the aforesaid principles, the jurisdiction of this Court to entertain this suit has to be necessarily held to be barred. It matters not whether on the date of institution of this suit the bank had initiated any proceedings before the DRT or not and whether not any such proceedings are pending or not. As long as the declaration claimed in the suit is the same as the defence which could be raised by the plaintiff to a claim by the defendant Bank before the DRT, the jurisdiction of the Civil Court would be barred. The consequential relief of permanent injunction against recovery would also be thus barred.

33. Notice in this regard may also be taken of Section 34 of the SARFAESI Act which prohibits a Civil Court from granting any injunction in respect of any action “taken or to be taken” in pursuance to any power conferred by or under, not only the SARFAESI Act, but also the DRT Act. Thus, the grant by this Court, of the relief claimed in suit of permanent injunction restraining the defendant Bank from acting upon or seeking to enforce any transaction under the agreements qua which the relief of declaration as void is claimed, is prohibited. The defendant Bank, before the DRT is enforcing its claim against the plaintiff under the said agreements / transactions. The claim of the defendant Bank against the plaintiff, before the DRT, is “an action taken in pursuance of a power under the DRT Act”. Section 34 supra, prohibits this Court from injuncting the defendant Bank from agitating its claim against the plaintiff before the DRT.

34. I have wondered that if the jurisdiction of this Court to grant the consequential relief of injunction is barred, can this Court have jurisdiction to grant the relief of declaration and / or should this Court grant the relief of declaration, which, without the consequential relief of injunction, would be a toothless declaration, incapable of saving the plaintiff from the claim of the defendant Bank if the DRT was to conclude otherwise and thus, but a mere scrap of paper. I am, (without foraying into the aspect of whether the jurisdiction to grant declaration would also be barred) of the view that in these circumstances this Court ought to refuse to grant the relief of declaration also, which is but a discretionary relief. It cannot be forgotten that grant of every injunction entails declaration of rights and no injunction can be granted without adjudicating conflicting rights of the parties. Thus, where grant of injunction is prohibited, such prohibition cannot be circumvented by instead granting declaration. This follows from Section 34 of the Specific Relief Act also which bars making of such a declaration where the plaintiff, able to seek further relief, omits to do so. The only difference here is that though the plaintiff has claimed further relief, such further relief is barred by Section 34 of the SARFAESI Act.

35. I would be failing in my duty if do not record that I have in Sunayana Malhotra supra taken a view that a Civil Court will have jurisdiction, if no proceeding before DRT is initiated. However, the same cannot be said to be good law in view of the subsequent dicta of the Supreme Court in Jagdish Singh supra. In the same vein, reference may also be made to Richa Industries Ltd. Vs. ICICI Bank Ltd. 190 (2012) DLT 500 where another single Judge, though held the suit for declaration, injunction and damages to be maintainable, refused interim relief. However I do not consider myself bound thereby because the suit was so held maintainable on a prima facie view of the matter and also because FAO(OS) No.577/ 2011 preferred thereagainst was disposed off as compromised on 28th February, 2013.

36. The suit is thus found to be not maintainable. The amendment claimed to the plaint does not affect its maintainability. Thus, the suit is dismissed and resultantly the pending applications are infructuous. The plaintiff is also burdened with costs of the suit. Counsel’s fee assessed at Rs.20,000/-.”

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Torts – Whether limitation for seeking damages will commence from the date of act / omission or from the date of knowledge of 'negligence' on the part of defendant?

The Hon’ble United Kingdom Supreme Court in David T Morrison & Co Limited t/a Gael Home Interiors (Respondent) v ICL Plastics Limited and others (Appellants) has held that only the date of act / omission is to be taken into consideration while calculating the period of limitation.

As per the factual matrix of this case, there was an explosion in the factory premises of ‘A’ and because of the explosion, some damage and loss was caused to an adjacent shop owned by ‘B’. ‘B’ instituted a suit for damages after a period of 5 years from the date of explosion. He justified his late instituting of suit by contending that he had no knowledge that such explosion was caused due to the negligence of ‘A’. Only after 5 years through news reports and other reliable sources, he became aware of the fact that such explosion was caused due to the negligence of ‘A’, therefore, the period of limitation commences to run from the date of such awareness and not from the date of the act / omission. However, the majority view held otherwise.       

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Hindu Law – Whether Section 6 of the Hindu Succession Act, 1956 as amended by the Amendment Act, 2005 is prospective or retrospective in operation?

The Hon’ble Bombay High Court, in its detailed judgment in Shri Badrinarayan Shankar Bhandari and Others Vs Ompraskash Shankar Bhandari has answered the question in the following manner;

1) Section 6 of Hindu Succession Act, 1956 as amended by the Amendment Act of 2005 is retroactive in operation;

2) Clause (a) of sub-section (1) of amended Section 6 is prospective in operation;

3) Clauses (b) and (c) and other parts of sub-section (1) as well as sub-section (2) of amended Section 6 are retrospective in operation;

4) Amended Section 6 applies to daughters born prior to 17 June 1956 or thereafter (between 17 June 1956 and 8 September 2005), provided they are alive on 9 September 2005 that is on the date when the Amendment Act of 2005 came into force. Admittedly amended Section 6 applies to daughters born on or after 9 September 2005;   

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Succession Law – Appointment of Administrator pendente lite

Recently, the Hon’ble Bombay High Court in Manek Dara Sukhadwalla Vs Shernaz Faroukh Lawyer & Others held that a probate court can appoint an administrator to administer the estate of the deceased pendent lite, however, the party seeking such appointment cannot seek such relief as a matter of right. The relevant portion of the judgment is extracted herein under;

“63. The appointment of an administrator is purely discretionary but at the same time such exercise of discretion must be judicious and not arbitrary. One of the tests is to see whether the Court is satisfied as to the necessity of such administration and the fitness of the proposed administrator and the circumstances justifying the case for appointing an administrator before subjecting the estate to the cost of such administration. Appointment of an administrator cannot be claimed as of right merely because there is a contest but such a request will be justified when there are bonafide disputes and the Court is convinced that it is necessary to appoint an administrator.

64. There can be no quarrel with the proposition that while the testamentary suits are pending, no one is legally entitled to receive or hold the estate or give a valid discharge. In the case of Rajendra Lodha (supra), the High Court considered appointment of an administrator pendente lite but came to a conclusion in the facts of that case, that there was no necessity of appointing an administrator pendente lite and that in their considered opinion the order of injunction passed was sufficient to preserve the estate. In the case of Rajendra Singh Lodha, the Court did not find any ground or material for arriving at a finding of “necessity” of appointing an administrator. There was no finding of waste, mismanagement, siphoning out of money, dilution of the property, etc. Whereas, in the present case, the learned Single Judge has found that the circumstances relating to the transfer of the Al-Karim property at least, was questionable apart from suppression/non disclosure of other assets.

65. The subject matter of the Will is the estate of the deceased. The succeeding party will be entitled to administer the estate and carry out the wishes of the testator, that is the final relief both the parties endeavour to obtain. The bitter dispute between the parties notwithstanding, it is inherent in the nature of the dispute that the estate of the deceased must be protected. In the facts and circumstances of the case, the existence of a bonafide dispute and conduct of the appellant and others clearly demonstrates the necessity of safeguarding the estate and an injunction will not suffice. The findings of the learned Single Judge that it is necessary to protect the estate by appointing an administrator are thus justified.

66. Apropos the scope and ambit of Sections 247 and 269 of the Succession Act, it is certainly possible for the probate court to exercise its powers to appoint an administrator in the testamentary suit. The difference between a suit under the Civil Procedure Code and a suit under the testamentary jurisdiction was dealt with by the Division Bench of this Court in the matter Thrity Sam Shroff (supra) holding that merely because a probate petition becomes contested, it does not transform the probate proceedings into a suit under the Code of Civil Procedure. The provisions of C.P.C. would apply to such proceedings only to the extent there is inconsistency between the CPC and the Succession Act. The fact situation in that case was not comparable to the present case. In that case, the issue before the Court was the right of a person in relation to operation of sections 222, 226 and 295 of the Succession Act. The case of Thrity Sam Shroff has been considered by this Court in the case of Ramchandra Ganpatrao Hande (supra) which reiterates the principle that the jurisdiction of the probate Court is confined only to considering the genuineness of the Will and it does not look into the title or even existence of the property itself and the 67. It was held that section 269 is the only provision which empowers the Court to interfere in the protection of the property. It is only relevant until the probate is granted or an administrator is constituted. It is further held that the legislature had enacted the said provision in order to enable the testamentary Court to pass an interim order of protection in relation to the property during the pendency of the petition. At the same time, the legislature excluded a class of persons, namely Hindu, Mohammadan, Sikh or Jaina or an otherwise exempted person as specified in sub-section (2) of section 269. In a regular suit, powers of the Court under Order 39 could be resorted to, to the extent the property forms the subject matter of the suit, whereas in a testamentary suit, the property left by the deceased is not the subject matter of the Petitioner's suit. In the present case, the proviso to section 269 has been pressed into service and in passing the impugned order, the learned Single Judge has concluded that the property forming the subject matter of the suit is under clear and present risk of loss or damage.” 

Trademark Infringement – Plaintiff & Defendant run jewellary businesses under their same ‘family surname’ – Can Plaintiff injunct Defendant from using ‘family surname’?

The Hon’ble Supreme Court of India in Precious Jewels & Anr Vs Varun Gems answered this question in negative and held as under;

“10. As stated hereinabove, Section 35 of the Act permits anyone to do his business in his own name in a bona fide manner. In the instant case, it is not in dispute that the defendants are doing their business in their own name and their bona fides have not been disputed. It is also not in dispute that the plaintiff and defendants are related to each other and practically all the family members are in the business of jewellery.

11. We have perused the hoardings of the shops where they are doing the business and upon perusal of the hoardings we do not find any similarity between them.”   

Labour Law – Whether limitation commences on ‘knowledge of an accident’ or ‘knowledge of commission of the offence’ under Section 106 of Factories Act, 1948 to enable Inspector of Factories to file complaint?

The Hon’ble Supreme Court of India in J.J. IRANI & ANR Vs STATE OF JHARKHAND has held that limitation to file complaint commences from the moment knowledge of an accident is known to the Inspector of Factories. The relevant portion of the judgment is extracted herein under;

“15. We have heard the matter and considered the issue at length and we find ourselves unable to uphold the reasoning of the High Court. Jambekar’s case (supra) is of no assistance in deciding the present case. In that case this Court accepted that from a reading of the report of the incident it was difficult for anyone to come to the conclusion that an offence under Section 21(1)(iv)(c) has been committed. The Inspector’s statement that the report did not convey to him any knowledge that the offence was committed was accepted and this Court concluded that the Inspector did not acquire the knowledge of the ‘commission of the offence’ when he received the report. The case before us is entirely different. Here the Inspector was himself part of the team, which conducted the preliminary inquiry between 5th and 6th March, 1989. As observed earlier, the inquiry is a detailed investigation going into all aspects of the occurrence. In these circumstances it is not possible to hold that the Inspector of Factories, who undertook a detailed inquiry into the accident along with the Chief Inspector of Factories, remained ignorant that the offences in question have been allegedly committed. It is proper to assume that an officer, conducting an investigation, comes to know what has happened, that being the only purpose of the investigation.”

Section 138, Negotiable Instruments Act, 1881 – Can courts entertain complaints which are filed beyond the period as prescribed under the Act?

The Hon’ble Supreme Court has answered this question in affirmative in PAWAN KUMAR RALLI Vs MANINDER SINGH NARULA and held as under;

“20. However, when the issue of limitation has come up for the first time before the High Court, it ought to have dealt with the same on merits as per proviso to Section 142(b) of the Act. The said proviso appended to clause (b) of Section 142 of the Act was inserted by the Negotiable Instruments (Amendment and Miscellaneous Provisions) Act, 2002 and the legislative intent was, no doubt, in order to overcome the technicality of limitation period. The Statement of Objects and Reasons appended to the Amendment Bill, 2002 suggests that the introduction of this proviso was to provide discretion to the Court to take cognizance of offence even after expiry of the period of limitation [See MSR Leathers Vs. S. Palaniappan (2013) 1 SCC 177]. Only with a view to obviate the difficulties on the part of the Complainant, Parliament inserted the proviso to clause (b) of Section 142 of the Act in the year 2002. It confers a jurisdiction upon the Court to condone the delay [See Subodh S. Salaskar Vs.Jayprakash M. Shah (2008) 13 SCC 689].”  

Lien – Whether Suo Moto appropriation pursuant to Lien permissible?

The Hon’ble Calcutta High Court has answered this question in negative in A.P.D. No. 357 of 2012 titled as Central Bank of India Vs. R.K. Agencies Limited, whereunder, Central Bank of India suo moto appropriated the amount kept in fixed deposit by R.K. Agencies on the premise that one Mr. ‘X’, who has controlling block of share in R.K. Agencies was a debtor in the London account of Central Bank of India. The Hon'ble Court observed that though nexus was found, suo moto appropriation is not permissible. The relevant portion of the judgment is extracted herein under;

“To sum up, we find, Sethia had dues in London. If Drumplace Limited is a company of Sethia, it did suffer the Decree before Queen’s Bench Division. Central Bank of India was thus entitled to enforce such decree provided it is lawfully enforced through appropriate mechanism. Suo motto appropriation on the pretext of transfer of account from London to Bombay, would have no factual or legal support.” 

 

Employment & Competition Law – Whether ‘Non-Poaching Agreement’ amongst various employers attracts the ‘Doctrine of Restraint of Trade’ ?

The United States District Court, Northern District of California in an interesting case titled as IN RE: HIGH-TECH EMPLOYEE ANTITRUST LITIGATION has answered this question in affirmative and held;

“

                              FIRST CLAIM FOR RELIEF

(Violations of Section 1 of the Sherman Act, 15 U.S.C. § 1)

119. Plaintiffs, on behalf of themselves and all others similarly situated, reallege and incorporate herein by reference each of the allegations contained in the preceding paragraphs of this Complaint, and further allege against Defendants and each of them as follows:120. Defendants entered into and engaged in unlawful agreements in restraint of the trade and commerce described above in violation of Section 1 of the Sherman Act, 15 U.S.C. § 1. Beginning no later than January 2005 and continuing at least through 2009, Defendants engaged in continuing trusts in restraint of trade and commerce in violation of Section 1 of the Sherman Act.

121. Defendants’ agreements have included concerted action and undertakings among the Defendants with the purpose and effect of: (a) fixing the compensation of Plaintiffs and the Class at artificially low levels; and (b) eliminating, to a substantial degree, competition among Defendants for skilled labor.

122. As a direct and proximate result of Defendants’ combinations and contracts to restrain trade and eliminate competition for skilled labor, members of the Class have suffered injury to their property and have been deprived of the benefits of free and fair competition on the merits.

123. The unlawful agreements among Defendants has had the following effects among others:a. competition among Defendants for skilled labor has been suppressed, restrained, and eliminated; andb. Plaintiffs and class members have received lower compensation from Defendants than they otherwise would have received in the absence of Defendants’ unlawful agreements, and, as a result, have been injured in their property and have suffered damages in an amount according to proof at trial.

124. The acts done by each Defendant as part of, and in furtherance of, their contracts, combinations or conspiracies were authorized, ordered, or done by their respective officers, directors, agents, employees, or representatives while actively engaged in the management of each Defendant’s affairs.

125. Defendants’ contracts, combinations and/or conspiracies are per se violations of Section 1 of the Sherman Act.

126. Accordingly, Plaintiffs and members of the Class seek three times their damages caused by Defendants’ violations of Section 1 of the Sherman Act, the costs of bringing suit, reasonable attorneys’ fees, and a permanent injunction enjoining Defendants’ from ever again entering into similar agreements in violation of Section 1 of the Sherman Act.

SECOND CLAIM FOR RELIEF

(Violations of the Cartwright Act, Cal. Bus. & Prof. Code §§ 16720, et seq.)

127. Plaintiffs, on behalf of themselves and all others similarly situated, reallege and incorporate herein by reference each of the allegations contained in the preceding paragraphs of this Complaint, and further alleges against Defendants and each of them as follows:

128. Defendants entered into and engaged in an unlawful trust in restraint of the trade and commerce described above in violation of California Business and Professions Code section 16720. Beginning no later than January 2005 and continuing at least through 2009, Defendants engaged in continuing trusts in restraint of trade and commerce in violation of the Cartwright Act.

129. Defendants’ trusts have included concerted action and undertakings among the Defendants with the purpose and effect of: (a) fixing the compensation of Plaintiffs and the Class at artificially low levels; and (b) eliminating, to a substantial degree, competition among Defendants for skilled labor.

130. As a direct and proximate result of Defendants’ combinations and contracts to restrain trade and eliminate competition for skilled labor, members of the Class have suffered injury to their property and have been deprived of the benefits of free and fair competition on the merits.

131. The unlawful trust among Defendants has had the following effects, among others:a. competition among Defendants for skilled labor has been suppressed, restrained, and eliminated; andb. Plaintiffs and Class members have received lower compensation from Defendants than they otherwise would have received in the absence of Defendants’ unlawful trust, and, as a result, have been injured in their property and have suffered damages in an amount according to proof at trial.

132. Plaintiffs and members of the Class are “persons” within the meaning of the Cartwright Act as defined in section 16702.

133. The acts done by each Defendant as part of, and in furtherance of, their contracts, combinations or conspiracies were authorized, ordered, or done by their respective officers, directors, agents, employees, or representatives while actively engaged in the management of each Defendant’s affairs.

134. Defendants’ contracts, combinations and/or conspiracies are per se violations of the Cartwright Act.

135. Accordingly, Plaintiffs and members of the Class seek three times their damages caused by Defendants’ violations of the Cartwright Act, the costs of bringing suit, reasonable attorneys’ fees, and a permanent injunction enjoining Defendants’ from ever again entering into similar agreements in violation of the Cartwright Act.

THIRD CLAIM FOR RELIEF

(Violations of Cal. Bus. & Prof. Code § 16600)

136. Plaintiffs, on behalf of themselves and all others similarly situated, reallege and incorporate herein by reference each of the allegations contained in the preceding paragraphs of this Complaint, and further alleges against Defendants and each of them as follows:

137. Defendants entered into, implemented, and enforced express agreements that are unlawful and void under Section 16600.

138. Defendants’ agreements and conspiracy have included concerted action and undertakings among the Defendants with the purpose and effect of: (a) reducing open competition among Defendants for skilled labor; (b) reducing employee mobility; (c) eliminating opportunities for employees to pursue lawful employment of their choice; and (d) limiting employee professional betterment.

139. Defendants’ agreements and conspiracy are contrary to California’s settled legislative policy in favor of open competition and employee mobility, and are therefore void and unlawful.

140. Defendants’ agreements and conspiracy were not intended to protect and were not limited to protect any legitimate proprietary interest of Defendants.

141. Defendants’ agreements and conspiracy do not fall within any statutory exception to Section 16600.

142. The acts done by each Defendant as part of, and in furtherance of, their contracts, combinations or conspiracies were authorized, ordered, or done by their respective officers, directors, agents, employees, or representatives while actively engaged in the management of each Defendant’s affairs.

143. Accordingly, Plaintiffs and members of the Class seek a judicial declaration that Defendants’ agreements and conspiracy are void as a matter of law under Section 16600, and a permanent injunction enjoining Defendants’ from ever again entering into similar agreements in violation of Section 16600.

FOURTH CLAIM FOR RELIEF

(Unfair Competition in Violation of Cal. Bus. & Prof. Code §§ 17200, et seq.)

144. Plaintiffs, on behalf of themselves and all others similarly situated, reallege and incorporate herein by reference each of the allegations contained in the preceding paragraphs of this Complaint, and further alleges against Defendants as follows:

145. Defendants’ actions to restrain trade and fix the total compensation of their employees constitute unfair competition and unlawful, unfair, and fraudulent business acts and practices in violation of California Business and Professional Code sections 17200, et seq.

146. The conduct of Defendants in engaging in combinations with others with the intent, purpose, and effect of creating and carrying out restrictions in trade and commerce; eliminating competition among them for skilled labor; and fixing the compensation of their employees at artificially low levels, constitute and was intended to constitute unfair competition and unlawful, unfair, and fraudulent business acts and practices within the meaning of California Business and Professions Code section 17200.

147. Defendants also violated California’s Unfair Competition Law by violating the Sherman Act, Cartwright Act, and/or by violating Section 16600.

148. As a result of Defendants’ violations of Business and Professions Code section 17200, Defendants have unjustly enriched themselves at the expense of Plaintiffs and the Class. The unjust enrichment continues to accrue as the unlawful, unfair, and fraudulent business acts and practices continue.

149. To prevent their unjust enrichment, Defendants and their co-conspirators should be required pursuant to Business and Professions Code sections 17203 and 17204 to disgorge their illegal gains for the purpose of making full restitution to all injured class members identified hereinabove. Defendants should also be permanently enjoined from continuing their violations of Business and Professions Code section 17200.

150. The acts and business practices, as alleged herein, constituted and constitute a common, continuous, and continuing course of conduct of unfair competition by means of unfair, unlawful, and/or fraudulent business acts or practices within the meaning of California Business and Professions Code section 17200, et seq., including, but in no way limited to, violations of the Sherman Act, Cartwright Act, and/or Section 16600.

151. Defendants’ acts and business practices as described above, whether or not in violation of the Sherman Act, Cartwright Act, and/or Section 16600 are otherwise unfair, unconscionable, unlawful, and fraudulent.

152. Accordingly, Plaintiffs, on behalf of themselves and all others similarly situated, requests the following classwide equitable relief:

a. that a judicial determination and declaration be made of the rights of Plaintiffs and the Class members, and the corresponding responsibilities of Defendants;

b. that Defendants be declared to be financially responsible for the costs and expenses of a Court-approved notice program by mail, broadcast media, and publication designed to give immediate notification to class members; and

c. requiring disgorgement and/or imposing a constructive trust upon Defendants’ ill-gotten gains, freezing Defendants’ assets, and/or requiring Defendants to pay restitution to Plaintiffs and to all members of the Class of all funds acquired by means of any act or practice declared by this Court to be an unlawful, unfair, or fraudulent.

PRAYER FOR RELIEF

WHEREFORE, Plaintiffs pray that this Court enter judgment on their behalf and that of the Class by adjudging and decreeing that:

153. This action may be maintained as a class action, with Plaintiffs as the designated Class representatives and their counsel as Class counsel;

154. Defendants have engaged in a trust, contract, combination, or conspiracy in violation of Section 1 of the Sherman Act and California Business and Professions Code section 16750(a), and that Plaintiffs and the members of the Class have been damaged and injured in their business and property as a result of this violation;

155. The alleged combinations and conspiracy be adjudged and decreed to be per se violations of the Sherman Act and Cartwright Act;

156. Plaintiffs and the members of the Class they represent recover threefold the damages determined to have been sustained by them as a result of the conduct of Defendants, complained of herein, and that judgment be entered against Defendants for the amount so determined;

157. The alleged combinations and conspiracy be adjudged void and unlawful under Section 16600;

158. The conduct of Defendants constitutes unlawful, unfair, and/or fraudulent business practice within the meaning of California’s Unfair Competition Law, California Business and Professions Code Section 17200, et seq.;”